Q4FY26 reversed Q3FY26's capex collapse: FY27 capex back up to INR1,500cr.

Hi, sir. Good evening and congrats on strong volumes and continued margin performance. Sir, my question pertains to what's next in terms of capex and the large cash surplus, which is further increasing owing to your strong internal accrual generation?

Okay Ravi, Bhandari here. As far as capex is concerned as on date, as Mr. Akhoury has already informed you, we are pursuing three distinct places. One, we will be increasing our RMC plants during '26-'27. Number two, we are earnestly working on railway sidings. And number three, the Meghalaya expansion for which orders have already been placed. However, the total capex estimation for the year '26-'27 is approximately INR1,500 crores and it should take its own course. We expect to close the year with about 50 to 55 RMC plants, railway sidings and preliminary work on Meghalaya cement.

Okay. And any thought on your long-term next 2-3 year expansion plans because Meghalaya will be a smaller capex?

Look, my dear friend. We are on record saying that we should reach 80 million tons by 2029. But then please understand it's a dynamic situation. We have slowed down the capex. Even in the last concall of one of our competitors, they have also slowed their aggression. So we will ride the wave as it is. We intend to reach 80 million tons by '29, but let us see.

Yes. Understood, sir. Great. And on the cash surplus, you have increased the dividend for sure. That is a good news. But anything further because we are now close to INR9,000 crores odd surplus cash?

We are 6400 Cr Net cash and a borrowing of approx 1500 Cr, Gross 7900 Cr. You are correct. We will keep on finding the ways to reward the shareholders as well as if the situation improves, we can expedite our capital expenditure program by front-ending it. You will appreciate that in the last 15 years or so, we have not borrowed. We have generally funded all our capex to our internal accruals and we intend to do the same.

Understood, sir. And second, if I look at consol minus standalone just for clarification, would that give the UAE performance or this would also include your East subsidiaries performance, consol minus standalone EBITDA?

No. Listen, consol has two components. One is Shree Cement East Private Limited and one is UCC, which is Union Cement at UAE. Now Shree Cement East Private Limited will be the engine for further capacity expansion in India and UCC, as Mr. Akhoury has already pointed out, is on track to add another 2.3 million tons of capacity by September '26. And I think it should keep us in good stead.

Great. Sir, given that our growth engine will be the Eastern subsidiary, should we not be looking at the company at a consol level rather than at a standalone level?

Indeed, I take your point. And we have been looking at this possibility. Maybe next quarter onwards, we will talk of consol only.

Thank you for the opportunity. Good evening to the management. Sir, my first question pertains to the freight cost, which appears to have increased by INR80 per ton kind of a number, on both Y-o-Y and sequential basis. Any reason for the same, sir?

No. What has happened is that our lead distance has increased by about 12 kilometres over last quarter. We are seized of the fact and we are working towards reducing this and maybe bring it back to sub 440 kilometer ton. And you see, basically, it is completely dependent on the demand-supply scenario of each region. So we are working on it and we should be able to bring it under our control.

Yes. Sir, my second question is that in the last concall, you mentioned about the depreciation guidance of around INR1,600 crores to INR1,700 crores. So are we sticking to the same number for FY27 or is there some upward revision?

Yes, we are sticking to that.

Yes. Hi, good evening and thanks for the opportunity. So on the strong volume growth delivery in Q4, which is like 11% Y-o-Y on cement level is what I see. So going ahead, how do we see it like full year is obviously at 2, but Q4 is pretty high? So going ahead like should we expect full year run rate to also now be at similar levels?

Basically, the guidance we have been maintaining is 1% over the average industry growth rate. However, we expect to reach about 40 million tons in this year. '2627, we should be around 40 million tons. But of course, there are a lot of macroeconomic factors, which are beyond our control. But hopefully, things will do well.

Sure. Understood. And generally on this West Asia crisis, while we know that there is cost inflation that everyone is facing, what are the mitigation measures? I believe now coal probably is cheaper than pet coke. So are you switching into coal more than pet coke and what are the mitigation measures basically?

My dear friend, it's a dynamic exercise for us. We keep on evaluating the techno commercial viability of various kind of fuel mix. And as on date, yes, you are right, coal is becoming cheaper than pet coke. But then pet coke prices also cooled down by more than USD10 a ton. So we are not concerned with what fuel we are using. We are concerned with landed cost per kilocalorie on air-dried basis at our plant. So we are constantly on that. Indeed, yes, the fuel cost which is standing at about INR1.60 per kilocalorie as on date will move up maybe by 10% or something for this quarter.

Right. Congratulations on that. And just lastly, if I may, could you provide region-wise capacity utilizations for you?

Yes. For this quarter, for North the utilization is 70%. For East, it is 60%. For South, it is 61%. Company as a whole, the utilization is 66%. As compared to December, the number was 56% for the company as a whole. So from 56%, we have increased it to 66%.

Thank you, sir for the opportunity. Sir will your competitor also sort of going slow on expansion, do you think there's a chance that demand might be sort of impacted in the ongoing year? What are your thoughts on demand specifically for, say, the next 12 months?

Let us understand my friend. Before the new series of GDP came into play, the demand was 1.3x the GDP growth rate. Now once the constituents of GDP got reconstituted, the demand has come to around 1 to 1.1x GDP growth rate. Now the bedrock of growth, economic growth is steel and cement. If India needs to grow at 7%, steel and cement should grow at least in tandem with that, if not more. We expect this year 6.5% to be the GDP growth rate. So we should do about 7.1%-7.2% cement demand growth rate. And as I have said, that should be the industry average. We should grow at about 8% to 8.5%, but you can never say. So let us see how the GDP moves.

Got it, sir. Any chance you could provide us some colour on the hikes, which has been taking, say, for example, in the past month or so?

About INR25 a bag.

Thank you very much. Sir, my first bookkeeping question is that what is the net cash balance as of March '26?

We are 6400 Cr Net cash and a borrowing of approx 1500 Cr, Gross 7900 Cr.

Got it. And sir, this value over volume and now we are focusing on volumes. So is it fair to say that between volumes and price and EBITDA margins, while we are chasing volumes, EBITDA per ton is also something you will keep on focusing on and not let it go down much?

Look, my dear friend, let us understand. Q2 and Q3 of last financial year, we suffered to pull up our prices. We did not aggressively sell. And once the prices have established to a level where the delta between the top players and us has reduced significantly, we don't intend to give up that advantage. We would like to have now our fair and proper market share. That doesn't mean we'll go into a price war and push volumes. Profitability is the prime focus. Price always the market gives. Volume is what we are capable to produce. This is the situation. Now how it will put pressure on EBITDA, we have never in our history given any guidance on EBITDA per ton.

Yes. Hi, sir thanks for the opportunity. Sir a couple of questions. First is if you could, sir, put some details on the Northeast expansion, specifically around limestone sourcing. If we have won a mine, what is the auction premium that what we have paid and any indicative time lines on the expansion that we have indicated?

We have gone by the laws of local government in Meghalaya, the state laws, where the state government allocates the mines. What we have got is three blocks. We have not completed prospecting of all the three blocks, but the first block where we have done our detailing, we are talking roughly about 600 million tons of limestone in aggregate.

Sir, the premium that we have paid and if you have any secured any incentives for this project along with the time lines?

Mines are not auctioned. They are allocated. No, we have not yet received any confirmed paper document from the government of Meghalaya on incentives to be given. We have approached them, but we have not got any confirmation from that. So this project is to our estimate, strongly viable even without incentives.

And sir, how should we look at the capex number? It looks very high, INR1,800 crores. Is it because of the region or is it something different?

No, my dear friend, Bhandari here. The INR1,800 crores capex apparently looks very high. But then as Mr. Akhoury just pointed out, we have three blocks. We have prospected one block, which shows more than sufficient deposit. Ultimately, we intend to reach 4 million, 4.5 million tons of capacity there. But then once you start looking at setting up that kind of a capacity, we are starting with 0.95 million ton of clinker and 1 million ton of cement. But we have to create the necessary infrastructure, acquire the land, draw the power lines according to our ultimate plan. So a lot of Brownfield expansion expenditure gets front-ended. And that is why this figure is looking so high.

Perfect. And sir, clinker factor, what it is right now and do we have any aspiration on this number, say, 2 years out?

Yes. For the current quarter, the clinker factor is 64.8% against 63.9% in December '25 and 64% in March '25.

Thank. Just on the cost, sir, what has been the cost movement in this quarter, cost of production versus the last quarter?

Raashi, let me address this upfront. As I said, our per kilocalorie landed cost last quarter was at INR1.60. We expect to keep this creep up to INR1.76 or INR1.80. Jajoo will share the exact calculation with you. But then please understand that we are trying to keep on increasing our thermal efficiency. Yes, we used 733 kilocalorie in this quarter vis-a-vis 741 in previous quarter. So we are continuously trying to decrease this and if we decrease this then the quantum throughput also falls, isn't it.

Yes. Got it. Sir, so besides the power and fuel cost, you would have also witnessed some increase in packaging costs. So on a cumulative basis, what kind of cost increase are you talking about?

Well, you should roughly take about INR150 a ton.

So on a total cost basis, just going back to the fourth quarter, you've had an increase in the power cost, you've had an increase in freight as well as in packaging. So the blended cement cost of production would have gone up by how much during the fourth quarter sequentially?

Should be around, say, INR150 to INR200 per ton, including packing and the raw material cost as well as this power fuel and all. No, in the coming quarter. In the fourth quarter the impact is around, INR20 to INR30 - compared to December.

Okay. So total cost increase is INR20-30 versus the third quarter. Okay. And what was the percentage of blended cement and trade cement during the quarter?

64% was the trade sale. You wanted the trade sale, right? Blended is 62%.

Hi, good evening sir and thanks for taking my questions. I'm sorry if you've answered this question earlier, but just wanted to get what was our kcal cost in Q4?

INR1.60 per kilocalorie landed at our plant.

Sure. And just one more question. What would have been our fuel mix in Q4?

For Q4, it was pet coke was 54%, coal was 32% and alternative fuel was 14%.

Good evening, sir. My question is on your pricing gap closing with large peer. You talked about closing INR20 gap. So is this similar across regions and is this the stabilized level, of course, you said there's always scope to improve, but how is this different across regions?

No, let us understand, Prateek. INR15 to INR20 is the delta decrease across region and we intend to compress it further. But then demand plays a major role in pushing the price rise-. So let us see how the demand pans out.

Sure. And this pricing gap reduction has happened over the past three quarters?

Yes over the year it has been a continuous exercise. Till third quarter, we had restricted our volumes to have the price gain. And fourth quarter, we have done all right. The pricing is fine. The volumes are good and we intend to remain like that.

Sir, other question is on your RMC business revenue for Q4 and full year and EBITDA for Q4 and full year?

RMC revenue is INR90 crores and the volume is 1.99 lakh MQ. It is INR246 crores.

Sir, I fully appreciate that. The reason I'm asking this question is some of your peers have highlighted that they maintain between 60 to 75 days worth of fuel inventory.

Please understand that they talk of 60 to 75, we have never gone below 90.

Yes. Just a follow-up question, sir, on the operating numbers, while most of them are already answered. What was the lead distance that you mentioned in Q4?

I think it was 459 kilometers. 457 kilometers sorry.

Okay. And this you're looking to go back to 440 in subsequent quarters?

Yes not only 440 and even lower.

Correct. And sir, given the steel prices have also shot up significantly and there are across the board inflationary impact on construction materials and there have been disruption even on labour availability. Have you seen demand disappointing in the month of April and May so far?

Till 15th April everything was all right. After that little slowdown has come. Now let's see now it's only 6th May what you are talking.

Yes. Just last few people are there for the questions. Sir, just two questions from my side. So in the initial comments or maybe to the answer of one of the questions, Akhoury ji said that the incentives for Meghalaya, though we are working with the state, but nothing is promised as yet. So is this a new policy or any change in policy for the state. Just help me understand this.

Navin we ask for incentive from people having plenty of money. There is no other money holder than state. So we have to always request to give incentive, this much cost is there, this much adverse conditions is there, all that. They have their own internal procedure, they have their industrial policy and they talk in investment committee. In that way we have processed the things beforehand. Till now we haven't received any response. If it will come we will let you know that this much incentive we will get.

Understood. Sir, my second question was about the North region. I think some time back, Bangur Ji in a TV interview had said that they might lose some market share in the North region because of the upcoming capacity, but this quarter, our volume growth has been definitely much better than the previous quarters. And also the strategy is very consciously towards focusing on volumes now that we have achieved.

There is a mistake. If you will say this, then this is a mistake. No, I said that we sacrificed volumes to reach a price point. And once we reach that price point and it became acceptable to all, we sold as much as we could sell. So we are not chasing volume. Before we were not chasing volume because we have to increase our price point. Now price point has come at a level and I felt that this is the correct price point then how much demand is there let sell easily. This is not much of a problem. So it is not that we are reinventing the equation value over volume to volume over value. Profitability is our main concern. We'll remain focused on profitability.