Star Cement (NSE:STARCEMENT) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Earnings Conference Call for the Quarter and Half Year Ended 09/30/2026 of Star Cement hosted by Philip Capital India Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

0:29 Please note that this conference is being recorded. I now hand the conference over to Mr. Vibhav Agarwal from Philip Capital India Private Limited. Thank you, and over to you, sir. Thank you, Robin. Good evening, everyone. On behalf of Philip Capital India Private Limited, we welcome you to the q two and h one f a twenty seven call of STARCEMENT Limited. On the call, we have with us mister, managing director and CEO, and Mr. Manojadarwar, Chief Finance Officer of STARCEMENT Limited. I would like to mention on behalf of STARCEMENT Limited and its management that certain statements that may be made or discussed on today's conference call may be forward looking statements related to future business developments and anticipated company outcomes by its management. Such statements on today's call will be based on Star Cement's management's current expectations, and these statements are subject to a number of risks, uncertainties and other important factors, which may cause actual developments and results to differ materially from the statements Star Cement Limited and the management of the company assumes no obligation to publicly update or order these forward looking statements, whether as a result of new information or future events or otherwise.

1:35 I will now hand over the floor to the management of Star Cement for their opening remarks with you, followed by direct Q and Thank you, and over to you. To start, you can take forward. Thank you. So hi. Good afternoon, everyone. My name is Prashad Bhajankar, and I'm the MD of STARCEMENT. I welcome you all to the conference call of FY 'twenty seven Quarter two. I would like our CFO, Mr. Manoj Agarwal, to give his remarks regarding the numbers, and then we can start with the Q and A session. Thank you so much.

2:07 Yes. Hi, Frank. Very good afternoon. I, on behalf of Star Cement Limited, welcome you to our conference call for discussing our number of Q2 FY 'twenty seven and half year ended September 'twenty six.

2:21 Now starting from clinker production, during the quarter ended September 26, we have produced 9.08 lakh tonne of clinker as against 9.18 lakh tonne same quarter last year. So far as cement production is concerned, we have produced 11.56 Lakhton this quarter as against 10.83 Lakhton same quarter last year. Now I will take you through sales volume. During the quarter, we have sold 11.23 Lakhton of cement and 0.74 Lakhton of clinker as against 10.72 Lakhton of cement and 1.01 Lakhton of clinker in same period last year. This is as far as cement and clinker sale is concerned. As far as geographical distribution of cement is concerned, in Northeast, we have sold around 7.96 lakh tonnes as against 7.84 lakh tonnes of cement during the same quarter last year.

3:15 And as far as outside notice is concerned, we have sold 3.27 lakh tonnes of cement this quarter as against 2.88 lakh tonnes same quarter last year. In terms of grain mix, it is almost 18% of OPC and rest is PPC. These are the quantitative numbers of this quarter. Now I will take you through the financials. The total revenue figure for this quarter is around $8.31 crore as against INR $8.11 crore same period last year. As far as EBITDA figure is concerned, this quarter, we have done an EBITDA of around INR 164 crore as against INR 194 crore last year. Profit after tax is INR 39.58 crore as against INR 71 crore in same period last year. On the per ton EBITDA front, it is INR $13.72 crores during this quarter as against INR $16.51 crores per ton same quarter last year. This is what our quarterly numbers of second quarter.

4:10 Total revenue figure for the half year ended September 26 is around INR $17.74 crores as against INR $17.23 crores same period last year. As far as EBITDA figure is concerned, during this half year ended September 26, we have done an EBITDA of around INR $3.67 crore as against INR $4.24 crore last year. Profit after tax is INR 113 crore as against INR 169 crore in same period last year. On per ton EBITDA front, it is INR $14.38 crores during the half year ended September 26 as against INR $17.16 crores same period last year. These are the quarterly and half yearly numbers. Now I request all of you, if you have any query, you can ask the same, and I will request Mehrot to moderate the query wherever it's required. Thank you.

5:00 Now over to Mehrot. Thank you very much. We will now begin the question and answer session. Our

5:29 Our first question comes from the line of Harsh Mittal with MK Global Financial Services. So my first question is on the volume front. So we understand that the first half was quite subdued compared to the last year. We quoted approximately 6% Y o Y growth in the first half, probably due to the elections and the heavy rainfall. My question is, how do you see the second half panning out? And particularly, how has the month of October been in terms of demand?

6:16 Members of the management, you are not audible if you're speaking Sorry. At this Yes. Can you hear me now? You are audible, sir. You may go ahead. Sorry, yes. So I was just saying that the first half, the demand was subdued for, I think, two main reasons. One was the election and the second reason was, of course, the flood which happened in Assam. And Assam is our major market, right? So that is why the demand in Q2 was very subdued.

6:45 But in Q3, Q4, we are seeing good traction in terms of volume. So we do expect the pent up demand to show up in the second half of the And we do expect double digit growth in the second half in terms of volume. Sir, any volume guidance, if you can,

7:11 including cleaners, cement plus cleaners for this whole year? So I think there should be about 12% to 13% growth in terms of volume in quarter three and quarter four. I will have to take out the exact absolute number in terms of tonnage. But then I think there should be a sequential growth compared to Y o Y of about 12% to 13 Understood. Got it. Sir, second question is on the realization. So we have seen price hikes across India in trade and non trade. How has been

7:46 the realization, particularly in Northeast Region in September and October? So in September, the prices were broadly flattish. But in October, we have seen that the prices have increased a bit, right? So I think there has been about INR 10 increase in Northeast. I think there has been about INR 10 to 15 increase in outside Northeast, which is basically West Bengal as well. So there is a trend of increasing prices, but at the same time, the price increase is a bit weak, right? So it's not still we'll have to see outside Northeast how

8:23 the prices stabilize. In Northeast, I think the price trend, the INR 10 that we've taken is going to sustain. Understood. Thank you, sir. I'll call back in the queue. Thank you. Our next question comes from the line of Shavansha with Dollar Capital. Please go ahead.

8:49 Sir, a couple of questions. So first, sir, on the CapEx date and the expansion front. So in terms of the last presentation that we have uploaded for q one, so it seems that in terms of the CapEx number has has been increased. So till now in one h, we have done 203 odd crore kind of a CapEx. So just wanted to get a clarity that in presentation, we have mentioned $5.60 odd crore for this year, next year, 1910, and for '29,610. So particularly the nimble, we are saying now 3,080 odd kind of a total CapEx versus previously that number was was slightly on on on the lower side. So that is one aspect.

9:36 Second is now whether the we will only be looking the Nimble, the 5,000,000 tonne expansion or the 2,000,000 tonne, which we were looking at either Bihar or West Bengal, will that be also be considered till FY 'twenty nine?

9:57 Yes. So I think there must have been some increase in the overall CapEx because now we have actually decided to put 6,000,000 tonnes rather than 5,000,000 tonnes in North. And regarding our expansion in the Eastern part, the Westing World has just come up with their policy, industrial policy. We have already applied for EC in Siliguri next to our current plant. And the policy seems lucrative. So we are in touch with the government. And we will probably by the next call, we'll be able to give better clarity that the 2,000,000 tonnes that we plan to put in Bihar, will it come in Bihar or will it be shifted to West Bengal?

10:43 So in the next three years, we'll be a vending unit will be coming in East Bihar or West Bengal. So just to get more clarity. So in Nimbul, clinker is 3,300,000 and cement will be at 3,000,000 tonne and Jadjar will be at 3,000,000 tonne grinding versus 2,000,000 tonne? Yes.

11:12 So the... Is what we have gone. So and the 3,300,000 tonnes of clinker will is the rated capacity. I think it can produce in full capacity, it can produce about 3,600,000 tonnes of clinker. And we have gone for a slightly larger size in the grinding unit because the additional CapEx was lesser, and we thought that it can come to our use in the next phase of expansion as well.

11:42 So just to get more clarity, so now for the entire 6,000,000 tonne, including the tinker, what will be the total CapEx? And how it will be spread in 'twenty seven, 'twenty eight, 'twenty nine? And will this entire 6,000,000 tonne come by Q4 FY 'twenty eight, 1Q FY 'twenty nine, when it will start?

12:03 So this will come by about July, August 2028. Okay. So that I think is about Q1 that's about Q2 of FY twenty twenty nine, right?

12:23 CapEx, I think we will, in our presentation, give you give an accurate breakup of the CapEx that we expect. These are, of course, sensitive numbers. We are, of course, trying to do as little CapEx as possible and to optimize it. So the numbers that we will share in the presentation will be of the actual scenario that we see as the project goes on. But I think it should be within the 3,000 crores, which has already been showcased in our last presentation. Okay. And roughly for the Power, West Bengal or Bihar, if we go for it, what would be the CapEx? And whenever we'll go, will it also come by Q2 FY 'twenty nine or when it will come?

13:14 So Bihar CapEx would, of course, be more than West Bengal, and that is why we are contemplating between Bihar and West Bengal because Bihar will be a greenfield plant, which will require its own rail residing, land, etcetera, whereas Celiguri, we already have the land, we already have applied for the EC.

13:34 They were already there. So a lot of things are just already there, right? So the CapEx would differ a lot. I think Celiguri would be about INR $3.50 crores of CapEx, whereas Bihar would be about INR $5.50 crores of CapEx. So I think in the next call, we will give full clarity about whether this is going to be Celiguri or Bihar. And we have already applied for permission wherever we could so that in case we decide delivery, then we are not wasting time, and we start with the groundbreaking as soon as we can.

14:07 So whenever we will start in terms of the broader time line in terms of when it will start? And also in terms of the for Nimble, we will looking for the EC by this October, November, whether that EC has came?

14:26 Yes. So the EC for Nimble, to be important, there's an EI meeting that one has to conduct, right? So the meeting has been successful. We've gotten the minutes of a successful EC. EC will be granted in a week or two. We are starting our groundbreaking from first of December in Nimble.

14:50 We have always... Sorry to interrupt, Shavon. We request you to please rejoin the queue if you have any further questions. Thank you. Our next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead. Yeah. Hi,.

15:11 Are not able, sir. You may proceed. Yeah. A few questions. First, the venture railway siding, what is the status of the operational emission and the cost saving outlook for that unit? And second, on the fuel cost, we were expecting a decline of 10 beta in '2 to 155. So, you know, why did this increase happen, and what is the outlook for q three?

15:43 So the filter, I think, we were supposed to get two things. We were supposed to get power connection, and we were supposed to get rail siding. So rail siding, so power is partially connected, but the railway siding, I think, will come by January. And that's when we'll start seeing savings in fly ash cost as well.

16:05 The what was your second question, sorry?

16:10 On the fuel cost, we saw in Q1 call, we were expecting fuel cost to come up by 10% Q on Q from 155 to 145, 1.45, while it's... We will flattish at 1.55. So why did it happen so? And, again, in q three, what is the cost outlook in the of fuel cost? Rajesh,

16:34 are told that 1.45, we will reach by the end of March. We will be reaching at 1.45. Okay? So because we have to gradually decrease. So because 1.55, this quarter, it is 1.52. Okay? So it will gradually decrease. And there is also... We are trying because there is any seasonal, so availability of the EFR was an issue. But now it will gradually come down to 1.45 by the end of the year, we will reach And also the problem is that we

17:05 there's a gold shortage throughout, right? So as you see in other companies' presentation as well, the fuel prices are going up because the there is very poor delivery of SSAs by Coal India. And so the fuel prices across the industry, across many industries have gone up, right? And all of them are projecting fuel price of more than 2%. Because our book stock is good, I don't think we will have to say that kind of a fuel price increase. And quarter three and quarter four, we'll broadly be able to maintain at 1.5, which is probably a very good scenario compared to the industry, which is suffering because of shortage of coal. Okay. Yes. So given that the industry will see a spike in Q3 and expectedly in Q4 to maintain at 1.5% that is good

18:00 for the numbers. And since then you mentioned the service setting would be accomplished by January and so thereafter, the benefits should start coming, right? Yes, exactly. Exactly. So we were having some issues with the power as well. So that will also get resolved

18:19 because there was some problem in the substation. So that will also get resolved and rail deciding also come. So the economics of the plant will also become much better. And then I think you should see some operational savings also in terms of cost from Q4 onwards of this year. Understood. So for H2, you guided that you're looking at 12% to 13% cement volume growth in the H2 year on year, right?

18:45 Yes. Year on year, yes. Yes. So how has that been

18:49 how has demand stepped up for you or sales stepped up for you in month of October in terms of growth? So October was actually like more than 12%. So that is why it just gives me some confidence that I think in the remaining months. So the full year, 7%, 8% volume cement volume growth target has largely remained intact?

19:14 Yes, I think so, yes. Okay. And on the incentive, see, sequentially, we have booked higher incentive in this quarter around INR 36 crores versus Any specific reason, I believe, the full year, we have cut the guidance. So is it INR 36 crore some contents of some one offs, which will not come through in Q3, Q4? How should one raise it? Rajiv. Rajiv, in Q3 and Q4, because we have already told that there is some change in the incentive policy of Assam Norway. So accordingly, because this quarter, we have got this approval for the remaining twenty years to twelve years. So that is why there is an increase in the subsidy. And in the next two quarters, we are expecting around INR 10.65 crore half year next half year, we'll be getting around INR 65 crore. This two half

20:09 year, it is around INR 60 crore. Next half year, we are will be around INR 65 crores to INR 70 crores of subsidy we will accrue. Rajesh? Rajesh, does that answer your question? Yes. Okay. Okay. Understood. So understood that Q2 run rate will continue in Q3, Q4, okay. Yes. Think that's all. Thank you and all the best. I'll come back in queue. Thank you. Thank you. The next question is from the line of Shavant Shah from Daulat Capital. Sir, just continuing on that. So in terms of how do we pencil in the CapEx number for this year, next year, FY 'twenty eight, 'twenty nine broadly?

21:01 I think the CapEx number of this year, next year in FY 'twenty nine, we will show we'll put it in the presentation for you to see. I think we'll upload a presentation in a week's time. So I think you can see those numbers there, I guess. But broadly, if you can spell, it would be helpful, the direction is because last time we said that INR $506,100 crores for this year, 1,500 crores kind of a number for next year FY 'twenty eight. So which obviously has increased in the presentation INR 1,900 crore. So that's all broadly. Can we go by the what the Q1 presentation number says? Yes. I think broadly, we can go by that number.

21:48 And if in the current situation right now, we'll only try to optimize basis whatever CapEx we've already done and whatever understanding of the CapEx, revised understanding of the CapEx we have now, the number should only go down. But that, I think I'll only be able to comment once I see what we had committed in Q1 and then whatever the currency.

22:09 So I think but yes, you can broadly go with the guidance of Q1. But if there's any revision, then that will be put in the investor call in the investor presentation. Okay. And in terms of the stand in terms of the we are not currently looking at in terms of the QIP because net debt to EBITDA will not cross 1.5x. So that stand remains for the time being? Yes. I think that stand broadly remains for now because I think the market is also correct significantly, right? So I don't think this is the right time anyway for the company to do QIP. And plus, I think the expansion plan also, we have revised a bit, right? So I think we will be able to manage it manage the current CapExes in the coming projects through debt and internal approval.

23:04 Got it. Sir, a couple of data points. What was the premium share for this quarter, clinker factor, lead distance? Yeah. So our Yep. Go ahead. Sorry. It was about Can I our lead distance Sorry? Two... It was two zero eight, early distance. And our slinker factor was about INR 58.6. Point Sorry, sir, our premium, sir, I couldn't hear. How can you repeat it? INR 17.3. Point three. 17 And in terms of the green, sir, what was the number for this quarter?

23:52 For the fuel? Green power, sir. Green power, I... Green power was about 28%. 28%. And in terms of the fuel mix, FSR, spot and AFR and biomass? SSA was about 45%. Washi coal and coke fine coal was about 40%. Biomass was about 11.5% and spot auction coal was about 10%. Okay. Okay. Okay. Got it. And in terms of the noncement revenue for this quarter was how much, Yes.

24:40 22. It is 22 crore. 23 crore. Okay. So so for 01/08, it is 37, 38 odd crore. So so so for for full year, how how one can We need a target around 100 to... It will be around 100 crores for the whole year. Okay. 100 odd crores. Okay. Got it. And just a one clarification in terms of the nimble, the incentive, what we have given in the presentation. So just directionally, it would be more beneficial for... Particularly for Nimble to to go for the SGST versus a a capital subsidy. And because if you go for SGST, that will be a part of revenue. So that's what I'm asking.

25:30 No. Because in the, in the cash flow term, it is better to have a full capital investment subsidy. Okay. Maybe or not, we will not come into the revenue, which is the capital receipt, it will be deferred revenue plan. But in terms of the cash flow, it is better the present value in terms of present value. Capital receipt is better than the GSE thing. So that is why we have chosen that. Okay. Okay. And sir, in terms of the profitability, we were looking at INR 1,500 to 1,600 odd for this year. So is it because the the the first half is slightly on on on the lower side. So can we can we able to to maintain that?

26:23 No, Praveen. Whatever we have said, told regarding the EBITDA guidance that we we see that by the year end, whatever we have told that will be achieved. Okay. Okay. Okay. Got it, sir. Thank you and all the best. Thank you. Our next question comes from the line of Navin Shadev with ICICI Securities. Yes, Thank you, sir. So my first question was on the fuel mix. So what we are gathering is the significant increase in the premiums, the e auction or the link of auction coal, Coal India is getting currently because globally the prices have shot up. So in a scenario like that, how are we managing to keep the cost as in I believe because you said Q3 and Q4 also, especially Q3, the cost is just going to be flattish at around 1.5.

27:36 So I'm just trying to understand in a scenario where the domestic coal or the e auction coal premiums charged by Coal India have more than doubled as what I could understand from the October data, how are we able to manage it to keep the cost flattish, if you can just help us understand that? Yes. Ajit. So basically, we already have about three months of stock of coal, right? So that just ensures that we do not go about buying coal in a panic, right? And FSAs have already started delivering. So until September, October, there was no FSA delivery.

28:22 So this month, we have already gotten about five rigs in November. And I think we do expect to get about four, five more rigs in November itself. So the whole coal situation because all the coal India production was getting diverted to power. And now I think the top levels in the power plants are also increasing. So they have started serving non power sectors as well. So I think in the next few months, the panic around coal, coal prices should reduce because the SSA will start delivering. So we have about 60 rigs pending, right? So as soon as those 60 rigs, which are pending from the past and the rigs, which are going to be pending in the three months coming, we'll start delivering. I think the coal situation should ease out, not only for us, but for everyone.

29:08 Because we do have a stock of three months, I think that just eases out our situation a bit more than probably someone else. Understood. My second question then was around the like significant expansions that cement companies are planning for Northeast. More recently, we saw Ambuja planning a 4,000,000 tonne unit. It seems like JK Lakshmi has also firmed up its plan to set up a plant in Northeast again. And she cement is already as you know pursuing. I'm not sure if there is any other company that is looking at it and you could help us understand if there are more players. But given the capacity influx that's happening, is it safe to conclude that this region which earlier had prices largely insulated could now face more volatility because several larger companies with deeper pockets are eyeing the space?

30:11 I think, like we discussed last time also, Northeast, they all have announced and they all will be putting up the plants and assuming, right? And first of all, I think they will take two, three years to put a plant because plants in Northeast or in LatAm or Meghalaya is not that easy, right? And we expect the market to be also growing in the next few years. And then we also have about 15%, 17% market share currently also, which is coming from outside. So that market share should reduce, right? So though I'm not taking away the fact that, of course, there will be some pricing pressure. But at the same time, I think in three years' time, market will be probably big enough to adjust some of the capacities, right? And for all these players also which are trying to enter Northeast, not the main charm is not the volume in Northeast, right?

31:05 Because there's not the markets are not as big as North or East. The main charm is price, right, because the margins are better, right? And the hassles are doing business is also there, right? And the CapEx as they've announced will also be looking for a return on those CapEx. So I think everyone comes and does to earn some money, right? The money in North East is not in asset turnover, it is in margin. And I think everyone understands that. So I do think that the pricing may be a short term pressure, but I think the long term, the pricing should stabilize. And just in relation to this, is it also fair to assume that the new plants will be eligible for the same incentive structure that we are currently getting or enjoying?

31:50 Or it is slightly different or at a slightly lower level than what we have? So I think certain cases, it may be similar to what we're getting. It's just that we had gotten about 200% on our fixed capital investment. The scheme that we will also put our Ranshu plant in and they're also probably trying to put their plants in, allowed only 110% of the fixed capital investment. So the tenure of longevity of the subsidy may be different, but the quantum per year may be similar for the year that we are getting it. Understood. Can I slip in one more question, please? This was about the CapEx outflow.

32:38 I understand that as compared to the previous CapEx plan, there is like uncertainty or we are reviewing the East India's unit. That's why the total CapEx outlay that you have given in your Q1 presentation, which comes with a little bit of a lag, is changed. But it seems the outflow for FY 'twenty eight, which earlier was guided at INR 1,400 crore is shot up to INR $19.10 crores, whereas the plant is still largely coming in Q2 of 'twenty nine. So if you could just help us understand the reason for expediting this CapEx? Or it's still flexible? We can like still keep the load on FY 'twenty nine with performance guarantees and stuff like that? Just a bit some clarification to help us understand cash outflows for CapEx.

33:34 Yes. No, thank you. So I mean, what the CapEx guidance that we've given in for Q1 in the presentation was, of course, depending on the EC and the land acquisition scenarios at that point, right? Now of course, for the Clinker plant, we are very certain for the Nippol plant that we have gotten the EC, we have gotten the land. So we are going to start putting up plant from December onwards. So the outflow of that is much more clearer to us. In Hajjar, we are still aggregating land, right? So we have aggregated about 58,000 land, there's still some land that we need to aggregate. So I think we'll get larger Hajjar in a month's time when we've allocated the full land and then we apply for the EC.

34:24 So I think because now most like the majority of the project is in our control, I mean, the incubation phase is over now, we are on the execution phase. But there are still few projects which we are getting clarity on. I think the Q2 estimation of the time line and the CapEx outflows will be much more accurate than Q1, right? So I think we'll also probably make sure that the presentation comes to you sooner than later and that we are as accurate as possible in those numbers so that there's more clarity. Navin, one thing is that because Q2 twenty nine whatever we have projected 'nineteen and rate, it is flexible because entire project cost will be same. Maybe that can be between '29 and '28 because there can be a bias phase, we can avail the bias phase option because part of the machine will come from the imported machinery.

35:26 So that INR 19,000,000 is not a static figure that can be twisting maybe 28, that amount can be transferred to 29 or maybe to 30 if we have a two year bank window is there. So that is just about the estimate, but it can be 28 to 29 to even up to 2,030. Our Our next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead. Hey, sir. Just a follow-up on the Northeast extensions by the competitors.

36:15 What is your estimation of the three companies setting up capacity,, and by when do you see practically the the unit starting?

36:34 So we don't have a clear idea about shipments right now because I don't think they've started or announced the groundbreaking as of yet. So I don't know exactly where they're what situation they're in. But I think J. K. Laxmi had announced and

36:57 Ambuja had announced. And in Northeast because because of the rain, first four, five months, there's no construction, which happened. So I do expect them to at least take two point five years to probably put up the gym. That is my estimation. But I mean, there is no situation they would know much better, I guess. So what I understand is even now, would also broadly say that if the cement are on track, then maybe by '29.

37:29 The other two companies maybe back ended and maybe later how about '29 is where I see. So for next two to for 'twenty seven, 'twenty eight, 'twenty nine, last part of these three years, would STAR and DALMEA be the dominant player in the market? And when can you expect stable pricing and margins to accrue for next two to three years?

37:54 Yes. I mean that is what my expectation is, right? And even after that, I think the like for us, as Star Cement, we have about most of our sales in Northeast happened through our trade network, right? So out of all the companies in the Mainland India also, we have the highest trade share, one of the highest trade shares, right? Good thing that the dominance even after two, three years will, of course, be with incumbent and fee will happen, market will be shared. Some smaller players, which are inefficient, they may shut down. All those things may happen. So I think the dominance remains even after. So yes, for three years, the margin pressure will not be there for sure till the time the capacity is come. And even the capacity that come, like you have to fully rationalize a bit because even the kiln, which she submitted putting is a 1,000,000 kiln, right? And what my idea is because the easy band is So over one and even JK Lakshmi is 1,000,000 EC, right?

38:52 So that means that they cannot reduce more than 1,000,000, right? And Adani is 4,000,000, but that I don't know the time line of it. So the 1,000,000 capacity is something that the market is just because it is growing at about 1,500,000 every year, right? So the market, we'll have to read a bit. And then there is about 15% cement coming from outside as well, right, to this market, which, of course, will also reduce. So I think there is a bit of all those things which will play out. But I think for the next two years, I do not see a problem in the margin, right?

39:29 Understood. Understood. That's quite helpful. You Manu sir, could you share what was the blended power connection cost per unit in Q2? It is INR 0.52.

39:43 Power. We Power. Power. Just a minute. Cost. What cost? What cost?

39:52 That's another take out. I don't think we have it. Okay. I will let you know. It can Sure. Sure, sure. That's both from my end. Yes. Yes. Thank you. Ladies and gentlemen, we have our next last two questions. The first from the line of Navin Shahid from ICICI Securities. Just

40:19 to confirm, how much material you said, how much cement comes into Northeast from other regions? I'm assuming it would be largely West Bengal, right? So how much material that comes in? It's about 15%, 16%. 15% to 16. 15%. Percent of the market share of Northeast is built outside there. That's through rigs. So it comes as in... If you could just help me slightly understand better, it comes from West Bengal state only or from other states and which are the catchment areas for that? Because I believe rake quite a break, it's a difficult

41:04 terrain, right? So which are the catchment areas for material to come into that market? So Chattelgar, Westing Wall are probably areas where the cement rigs come from. And that's mainly areas of course like areas which are closer to the station, right? So it could be Guwahati, it would be Filcher, it would be any place which is close to Guwahati. They're normally selling in consignment basis, so they're not making the dealer network, they're selling in consignment. So when the going becomes a bit hard, the rigs stop coming as much. When they see a good margin, they start sending rigs. So this is normally the phenomena that happens, especially in the off season, right, because the rig availability is not that much of a follow on, there's excess capacity in the Eastern market to flood the Northeast market.

41:59 So that 15%, 16% is something which, of course, is a gap in the market, which probably will be covered when the competition increases. Yes. So just one on this. The 16%, 17% transpires into what kind of volume? Is it 2,000,000, 3,000,000 tonnes?

42:24 16%, 17% transfers to about, yes, at least like... Naveenji, around 15,000,000 market, about 16%. It is around year, which is $2,400,000 per year.

42:44 Understood. Understood. And just last question. Is there any update on the RMC units? We were probably looking to explore in the North Region as part of our penetration program into the region before our capacity comes up there. Just a minute. Just minute. Some glitches is there. We have to resolve. So shall we proceed to the next?

43:21 Yes. Now it's okay. Thank you. Our question comes from the line of Tushar Agarwal with ICICI Bank. Go ahead.

43:35 Am I audible? You are audible. Yes. You are audible. Yes. Just some data points. What is the blended fuel cost on KL basis for this quarter?

43:50 This is consumption, 1.52. It is our current CV. Okay. And just want to confirm the volume figures. Can you please repeat the volume figures? Volume figure, total is 11.23 is the and 0.74 is the clinker. Total 11.97. Okay. Thank you so much. Thank you. The next question is from the line of Navin Chadev with ICSA Securities. Please go ahead. Yeah. And and sorry. I... If I was not audible. I was only asking if there is any update on the RMC units we were exploring to set up in North before our greenfield unit commissions there?

44:39 So actually so I don't know if you got the answer to the first question because I had disconnected. But 16% would, of course, mean about two point four two five two point five million tonnes of cement, which comes from outside. And

44:59 regarding the RMCs, so we, of course, in Northeast, we are ramping up our RMCs. There will be one RMCs in Girard. We have opened one in Delhi, in Guwahati. In North, last time we've given this idea, and we've bounced it off to the team, and they are actually very positive about it. So they may start their activities in the next four to five months. And they will like, of course, the grinding units where we grinding in the clinker plant will have its own R and Cs that will also be used to supply local markets. But at the same time, they are on a contract model. They are trying to start working on it, right, so that they can start serving the market in some capacity before we launch our production. So that, I think, activity will start one year before we are going to commission our grinding and clinker plant.

45:55 So that idea was very helpful, and I think we are going to

45:59 definitely Great, sir. Great. All the best. Thank you so much. Thank you. We will now take our last question from the line of Shravan Shah from Dollar Capital. Please go ahead. Sir, what was the trade share for this quarter?

46:20 Trade share was 77%. 77%. Okay. And broadly for this quarter Q2 in terms of the industry level for Northeast, the growth will be the similar what we have seen for ourselves in terms of the 4%, 5%? Or it would be on the lower side? At least two minus. It will be in

46:50 Northeast. In Northeast for quarter three and quarter four. Quarter two, quarter three. Yes, not Q2. That is because of the monsoon. So like almost one point five months went in that. So the and Assam is like the major market in Northeast, and both Assam and other land was completely started this time. So I think because of that, the growth has been quite mute. And then plus, like the money put problem is still going on, right? So there is a significant degrowth in those markets, right, of about 25% because the demand has only collapsed in those markets because of the political unrest. So that will also play the role in the overall growth of North Sea. And so far in the second half, so broadly, if I look correct me if I'm wrong, in Q1 also, I think 1%, 1.5% in flattish. So broadly, one can say kind of a 1% or maybe 05% kind of a growth for Northeast in the 1H.

47:52 And then for second half, this we are expecting to bounce back to which number?

48:00 So in second half, we are expecting for it to be the growth in Northeast to be close to double digit, right? And then we are seeing a good growth in West Bengal market. So there, I think the growth would be in the higher teens, right? So the overall growth on a company basis becomes about 12% to 13%. Yes. For you, I got it. I was trying to understand for the industry. So for industry also in the second half in Northeast, So we have to be able to double digit I mean, honestly, growth will be about 7% to 8% for the industry in Northeast, I guess. Yes. Okay. 7% to 8% or 8% to 10%?

48:48 I would just go for seven to 8% only I mean the market seems a bit dry in terms of credit and all. So I would go with 7% to 8%. Because the industry will grow to seven to 8%, but we'll grow in double digit because more than 10%, and the industry is seven to 8%. That is what Sadhari has told. Yeah. Yeah. No. So I was trying to understand, sir, the the the the... What we we are doing, so close to one lakh 26,000 ton that we have sold in one h. So just trying to understand why can't we we make it cement and sell? Is it not more profitable?

49:44 So or is it the demand is not there and that's why we are we have to sell the Kingdal? No. So sorry, can you just repeat your question again? I was saying that in 1H, we have sold 126,000 tonne of clinker. So just trying to understand why don't we make the cement and then sell versus this clinker sale? And how do we look at this clinker sale going forward? So good question. I think the clinker is normally sold to players, which are smaller lending units, which do not have a clinker plant, right? These vending units are not branded players. They are non branded players who do not directly compete with you, right? And the customers who are buying non branded cement are not customers who will definitely go and buy STARCEMENT because the gap in price is huge between the non branded and branded.

50:39 So we are basically selling clinker to those people who are making cement, which is not directly competing with you. So we're not selling it to a Dalmia. We will not be selling it to yes. And some of the clinker is also not being used in Northeast. It is going to Filigudi, it may be going to Nepal, it may be going to other areas, which are not in Northeast. So it's a mix of the two, but I do get your point that we should try to avoid selling clinker and sell cement instead. So that we have started from Q3 onwards. What we've done is that we have taken the we have increased the prices of clinker so that we are only selling clinker selectively. And even if we are selling clinker, we get a good realization for it. And so that there's no oversupply of clinker in the market, right?

51:31 Got it, sir. You. See that from quarter three onwards, the tonnage may reduce, but the margin may increase in clinker sales. Great, great. Thank you. Thank you, sir. Thank you. I would now like to hand the conference over to Mr. Vaibhav Agarwal for closing comments. Yes. Yes. Thank you. Tusharvi, just one small clarification I needed. So in the call earlier, you said that for the, the branding community will take the call maybe in q three or towards q four, maybe in the second half of current year. So will this branding unit call will also be complemented with the call and because we are looking at a capacity of also. So is it fair to say that both the capacity will come together or will be only the grinding capacity call, which will take in the next quarter? Yes. So mean, basically, we are taking these two decisions independently, right, because we are putting up a grinding unit in delivery because we do see a good growth in the North Bengal and Bihar market as well. And we want to continue serving those markets. And also the subsidy makes it lucrative for us to put our plant because the LCST benefit because we're already selling a good volume in Celibody. So the LCST benefit will be be accrued to us from the very first year.

53:00 At the Ginka plant in Umlangshu, we have applied for three quarter -our standard towards for the EC. I think in two, three months, we will get our EC. We've already got in the plant land, right? The work for it is running parallelly. I think the decision to put Umbrancho,

53:17 we have already taken in principle that we will put our plant in Umbrancho. I think we are just looking at the demand situation and then trying to take calls. So what we're doing is that we're trying to get all the permissions, every single thing, all the activities, civil activities sorted on ground so that whenever we want, we can just take eighteen months and we can put a. So that clarity depends on how the market behaves, right? So that we were we're just trying to assess and take our own call. For the next few years, I do think that we have tinker in Northeast with our existing plants, and we're trying to debottleneck our existing plants so that we can produce more from our plant. So that has been the aim. And I think whenever we do decide to put two months, it will take about eighteen to twenty months, and we'll have it.

54:07 Right. No, I was asking you basically from a perspective that you are saying that December 1, maybe December, you are groundbreaking for the Rajasthan plant. And I presume it will take eighteen to twenty four months for you to come there, commissioning the Rajasthan plant as well as Rajasthan. So will Rajasthan and Rajasthan even come together? And secondly, will your Umanshu expansion will be holding all in the Rajasthan or will you can you take both the sponsors simultaneously within our targeted debt to EBITDA. Yes. No, fair enough. So we will be taking the Chajar and the Numbol clinker plant will ideally be coming together probably one or two months apart. But our target is to get it together or get the grinding units a bit before the clinkerization plant.

55:01 But I think they should broadly be coming in the same quarter. For the Guangzhou plant, we right now can do, but we are assessing the scenario that we also know the people in our clinkerization because we already have clinker for the next three, three point five years in Northeast and also for whatever growth we are having in outside Northeast. So we will take a call in case we think that the demand is good, then we may start there may be some overlap between the clinkerization in Mumbol and Udanshu. But it really depends on how the demand opens up, right? Okay. And then just one last thing regarding the Bihar unit, which you have said that you will be evaluating between Bihar and Siliguri. Suppose we would decide for Siligud, then Bihar is not ruled out.

55:46 Right? In the future, you were still considering Bihar because you are buying land as of... I believe, like you said in the previous calls. So you... And you're buying land, so Bihar will still be there in the in the future or it will be called Yes. So we will defer once we put Synagogis, then we'll defer Bihar. But yes, I think we will we're still identifying a plot in Bihar, right, because the plot that we had gotten earlier, there was some dispute in it. So whenever, I think in the next two, three months, we get the plot, we'll buy the plot, we'll apply for permission and everything. And then we'll just keep that plot ready for the future that whenever we do want to put up the branding, So in a nutshell, if I can ask you, which year you are targeting the 20,000,000 tonne capacity target for Star Cement, 2031, 'thirty two is a fair estimate or you can say 2013, we can achieve that number?

56:42 No. So I think practically, if you are going with 6,000,000 tonnes, like broadly, are about nine we are 9.7, let's just take it as 9.7, 10, right? So if we are talking about 6,000,000 tonnes in North and we're talking about 2,000,000 tonnes in Siliguri or Bihar in the next two years, the right is the target for both. So then 18,000,000 will become in about two years' time. And then we are acquiring land in Jurharth for a grinding unit and Umlangshu will also come as a grinding unit. So I think overall, by 2030, 'thirty one, we should be crossing INR 20,000,000 hopefully easily, and that is the target, right?

57:28 And the next year is 18,000,000 approximately. Well understood. Thanks to Sandeep. On behalf of Philip Capital India Private Limited, I'd like to thank the manager of Star Cement for the call and many thanks to joining the call. Thank you very much, sir. Thank you. Thank you. You. Thank you very much. On behalf of Philip Capital India Private Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.