Ambuja Cements Limited (500425) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Ambuja Cements Limited Q1 FY '27 Earnings Conference Call hosted by Nomura. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to [indiscernible] from Nomura for opening remarks. Thank you, and over to you.

Yes, thank you, everyone. Without much ado, I will transfer the call to Mr. Deepak Balwani, Head of Investor Relations. Mr. Deepak, over to you.

Yes. Thanks, Jashandeep. On behalf of Ambuja Cements, it is my pleasure to welcome all participants to our earnings call for quarter 1 FY '27. Ambuja Cement is the ninth largest cement company globally, a key part of diversified Adani portfolio, the country's fastest-growing portfolio of sustainable businesses. Before we begin, I would like to remind everyone that today's discussion may contain certain forward-looking statements [indiscernible] based on our assumptions. These statements are subject to various risks and uncertainties, and actual results may vary materially. At Ambuja, we remain committed to enhancing transparency, strengthening disclosures and continuously elevating our capital market communication standards in line with the global best practices. We are pleased to have with us today Mr. Karan Adani, Director; Mr. Vinod Baheti, Chief Executive Officer; and Mr. Rohit Soni, Chief Financial Officer. With that, I would now like to invite Mr. Vinod Bahety to share his perspective on the quarterly performance and the company's strategic outlook.

Thank you, Deepak. Thanks, Jashandeep. Good afternoon, everyone, and thank you for joining us. We have started our financial year '27 with a disciplined and sustainable performance reflecting the continued execution of our strategy despite a challenging operating environment. The quarter was characterized by stable cement demand supported by infrastructure housing and construction activity, while profitability across the industry remained under pressure from the higher imported fuel prices, elevated threat costs and geopolitical developments in West Asia. Against this backdrop, Ambuja Cements delivered stronger profitability, improved operating efficiency and continued strategic execution. Our strategy remains clear and consistent, creating sustainable value ahead of work volume. We use this as an opportunity to perform scheduled maintenance for almost 12% of our pillars absorbing additional cost of INR 50 per metric ton this quarter while we built clinker inventory of 1 month and around 3 months, giving us a competitive edge in second quarter. We continue to execute against the 4 strategic priorities that will define the next phase of our growth. First, profitable growth. Our focus remains firmly on value creation. We continue to improve the quality of our revenue through a higher share of trade sales, increasing premiumization, discipline in pricing, market-specific commercial strategies. Trade shares -- trade sales shares has actually improved from 74% to now 78% of our overall sales. Our premium strategy continued to gain traction with premium products comprising 34% of our trade sales. Cluster-wise, if I were to highlight North continued with its leadership in terms of giving highest EBITDA in my books. We grew 2% of our trade volumes Y-o-Y in North, while there will be a much sharper reduction in the lower-margin non-trade volumes. Central cluster, it remains a strong market with higher proportion of premium cement, enabling higher EBITDA margins and -- so far as West is concerned, it's well balanced between trade and non-trade since the key market of Mai, Gujarat are stronger on higher margins of non-trade volumes. We have grown positively both in terms of trade as well as non-trade in West. East is concerned, we have sustained on the trade volume, and we maintained healthy -- so far as South is concerned, we have consciously reduced our lower-margin volumes while we continue to increase our channel network and focus on trade volumes as we move on the coming quarters. In all, 2% Y-o-Y growth on the trade and a -- priorities, I would highlight is the structural cost leadership. Operational excellence continues to strengthen our competitive advantage. During the quarter, our clinker factor improved by 3% from 67% to now 64%, while share of blended increased 85%, improving both profitability and sustainability. Net operating costs reduced to INR 4,241 per metric tonne, a reduction of INR 206 PMT from the previous quarter. Thus, it puts us firmly in terms of our guidance to achieve INR 4,250 per tonne for this financial year. Importantly, these gains were achieved despite the inflationary pressures. Productivity initiatives enabled us to maintain manpower at INR 222 PMT, while optimization of our manufacturing footprint reduced the primary lead distance by 20 kilometers, lowering our logistics cost by another INR 10 per metric ton. Across the value chain, we continue to build structural advantages through raw material optimization higher renewable energy, better use of domestic fuels, enhanced capacity, enhanced captive coal integration, improved kiln efficiency, logistics optimization and expanded rail infra. Our RE power capacity is now at 973 megawatts, up almost 500 megawatts over past 1 year. WHRS capacity stands at 278 megawatts. And this has helped us to reduce our unit of power cost from INR 5.9 per KWH to almost INR 4.9 KWH. So by INR 1, actually, it has come down with this improvement. This is in line with our earlier guidance. Cost transformation journey for this year remains firmly on track, as I mentioned earlier, supported by a series of struct efficiency initiatives. One of them, for example, reduction in the lead distance, we are expecting another 15 kilometer which will be INR 35 per savings. Raw material logistics optimization through greater use of the BCF and the fly sourcing initiatives will contribute additional INR 30 per tonne. On the energy front, increased RE power consumption backed by commissioning of additional 75 megawatts of the new wind power capacity, along with the targeted reductions in the heat consumption, which on a conservative estimate, I consider -- existing per kg of clinker and the power which will by almost 2 to 3 units per tonne of cement. This is there's a headroom of improving it by INR 10 to INR 15. In all, these initiatives are expected to deliver savings of almost INR 130 to INR 150 per tonne, providing a strong visibility towards our cost reduction target and enhancing long-term competitiveness. It also mitigates any pressures on cost from the geopolitical tensions. I again reemphasize all these initiatives are fundamentally reshaping our cost curve and reinforce our confidence in achieving total cost of 4 to 50 PMT by end of '27. The third factor in our strategic approach is the disciplined capital allocation. Today, Ambuja has evolved into a 109 million tonnes of capacity integrated cement platform. Our priority is no longer simply adding the capacity, but it is converting scale into higher productivity, superiority and stronger returns on capital. Our expansion program remains firmly on schedule. To highlight, trial runs have already commenced at Dahej, which is the expansion of 1.2 million tonnes of cement capacity. Salai Banwa in UP has already started with 2.4 million tonnes of capacity. Bhatinda in Punjab, 1.2 million tonnes and Jodhpur, which was, if you remember, we had acquired from Penna as an overall company. So this Jodhpur was under construction at that point. It has already also commissioned at 2 million tonnes of capacity. Kalambali in Mumbai, basically 1 million tonnes of expansion that is expected in Q2 and so is Versal Ganj in Bihar. 2.4 million tonnes expected in Q2. Marata is a clinker line, which we are expecting it to commission next year. These projects will increase our installed capacity to 119 million tonnes by end of this financial year, and it will also help us to improve on our efficiency and overall costs. At the same time, our focus extends well beyond capacity creation, debottlenecking, the asset reliability, the operational stabilization and the productivity enhancement remains equally important to maximize the returns from every amount of capital invested. Fourth in the pillar of the strategy, which we are focusing is to build a future-ready enterprise. technology are enduring competitive differentiators. Importantly, at Ambuja, sustainability is not merely an ESG commitment. It is a driver of innovation, efficiency and long-term shareholder value creation. briefly summarize our financial performance, revenue of INR 9,500 crores, operating EBITDA of INR 1,589 crores. EBITDA margin, which has improved 330 basis points to now 16.7% EBITDA per tonne of INR 931.et cost reduced by INR 206 per metric ton sequentially, PAT of INR 660 crores and net worth of almost INR 72,000 crores. Looking ahead, friends, India's long-term demand fundamentals remains compelling. Infrastructure development, urbanization, industrialization, logistics investments and housing demand continues to support sustained growth in cement consumption. While near-term demand may remain influenced by monsoon and input cost volatility, our priorities remains unchanged. We remain well positioned to outperform industry growth, expanding installed capacity to 119 million tonnes with the addition of 10.2 million tonnes, which I mentioned before. We also target approximately INR 250 per tonne of additional cost savings, which I mentioned to INR 450 now. by the end of -- for the full year of FY '27 and continuing to improve returns through disciplined execution, premiumization, operational excellence and digital transformation. With industry scale, leading structural cost leadership, disciplined capital allocation and technology-enabled execution and a stronger balance sheet, Ambuja Cement is uniquely positioned to create superior long-term value for all the stakeholders. I thank you again to the moderator.

We take the first question from the line of Navin Sahade from ICICI Securities.

Also congratulations on the sequential improvement that we have seen in the profitability. I had 2 questions. One is on volumes. Now volumes, you'll appreciate that yours is to have seen at least so far in the listed entity space, Ambuja is the only company to have lost volume. you explained trade, there is a decline and a much higher decline in the nontrade. This is in the which is value and also mentioned in the PPT. So I wanted to just understand then, is it fair then that for full year FY '27, if this strategy maintains, we will have muted kind of a volume growth because we'll be focusing more on maximizing value in the backdrop of the previous quarter's guidance that we were chasing around 80 million tonnes or so.

Thank you, Navin. Thank you very much. I think this question may be also echoing from some of the other analyst fraternity. So let me explain this in more detail. First, I want to assure you all, I think the whole focus on the volume and therefore, this improvement in the percentage of trade volume from 74% to 78% sequentially, as rightly said, has actually given us a good bump in the EBITDA by almost INR 206 a metric ton. Now from here onwards, on back of our brand equity, Ambuja, ECC with the parent brand, Adani Cement, we are riding quite well in terms of the volume growth. As we speak in the month of July, and I would not shy highlighting that we are already seeing an 8% improvement on the trade volumes. And therefore, it gives me a good level of confidence to continue with our estimation and guidance of 8% growth, which we are targeting for this financial year. And therefore, the way we -- I think in terms of revenue and keep us giving that advantage compared to the competition. It doesn't mean that we are not focused on the non-trade. We are. And in my commentary, I highlighted that some of the markets of West and a few of, say, North, which provides a greater of nontrade, which cements are key focus area. And what we are also doing is many of the markets in Central and East, for example, they are also moving blended cement in the non-trade, which actually becomes an advantage and therefore, has helped us to improve our overall say, share of blended cement to 85%. So the track is to, one is improve the share of sales to the non-trade institutional segment and keep focusing on trade with the brand equity and the excitement which we see now with the channel partners, the dealers, the contractors, the retailers and the whole positive momentum, which is now coming in. I think this definitely bodes very well for the coming quarters and which is reflected in July also. So I think we are quite positive towards the volume growth for the year.

So we'll gain the lost -- I mean, just like part of this question is, so whatever market share loss we have had in Q1, we'll be able to recoup that in the balance 9 months. Is that a safe understanding?

Navin, I would say that market share has to be looked upon on an overall basis. Again, for example, I would say that we have sustained and rather only improved in terms of the market share on the trade segment. And so far as you may say that we have reduced our market share on the non-trade, which is like a very well calculated thought upon basically action plan. So -- but on the trade side, we have sustained and improved only.

Understood. Understood. Sir, my second question then was on the green power. And as you reported that out of the 1,122 megawatts, 973 is already commissioned, which is -- by FY '28, the target is to take it to doub1,2 megawatt, which is just 13% incremental, but the share of green power going to 60%. So 2 parts of the question is what major difference will the incremental 13% do to take the overall share to 60%? And if companies selling power because not able to utilize at the plant, does it also mean that the benefits of this green power are largely captured. The only difference being they are in revenues right now and will come to cost later.

Very good question. Again, Navin, I must app. I think this is like a very interesting point. What we have done is like we have set up the capacity. And just to put specific numbers, 45 crore units in first quarter. Question would be, are we basically to consumption. Actually, the inc the consumption. But there are always infrastructure of the policy initiatives, it takes. But this quarter, which is Q2, we are expecting to consume almost like 50% of this, so almost like 20 crore units out of the sold units, number one. Now your question is very interesting that 34%. Actually, if I consider the sold units, this 34% is actually reported on a consumption basis. I would have actually shared on a overall plus consumption, then my green power share is almost 48%. Now the journey is then from 48% to 60%, and that is quite basically enabled through the capacity which you highlighted up from 112, for example, and also the WHRS capacity, which are getting set up from some 230-odd megawatts as of now. So we are absolutely well on plan in terms of green power to achieve 60% by FY '28.

We take the next question from the line of Manish -- Company.

I have a couple of questions. First, it's Sanghi, Penna Orient. When do we expect normalized utilization and EBITDA per tonne levels? How much CapEx do you think you need to spend to achieve that?

As far as the acquired assets of -- your question is Manish Orient, Penna and, if I understood it correctly. Orient, for example, is quite well in terms of its capacity utilization as well as margin. And therefore, for example, from effectively year onwards, I only see an improvement in Orient with minimum investment. So far as -- because we have 87% utilization of capacity in Orient. So far as Penna is concerned, that remains an area in terms of improving the capacity utilization. One is the investment part. Investment is lesser, but I think what we have to do, investment is more on the channel network and increasing the whole focus in terms of the trade sales, which will be the key driving factor for improving our overall, say, penetration of utilization of capacity of Penna. Sanghi is quite moving well. And Sanghi, for example, we have seen an improvement in the capacity utilization, both clinker as well as cement. And Sanghi, for example, what we are doing is now an investment of closer to, say, INR 600-odd crores, which is planned in terms of the expansion. But that's more for the clinker basically utilization, which will augment and support the planned grinding units in the on the coast. But otherwise, Sanghi has taken up the investments. We have, for example, we are already investing into in Sanghi. And what we have done is also a shutdown of -- plant shutdown of one of the kiln, which is in a normal course of the investment. Nothing special. So I think Penna is what, for example, required some of the AFR investments and WHRS investment. I would take it the investment is less than, let's say, INR 100 crores to INR 150 crores altogether, but the more important is the whole improvement in terms of the channel development for South to enable and facilitate margin expansion of the Penna assets. And as I said, Sanghi is now doing well, and we'll see every prospective quarter a better utilization and improved margins coming from Sanghi.

Okay. That's super helpful. And then you mentioned in the press release that you expect sequential cost pressure in fiscal second quarter. When should we expect those costs to normalize?

So basically, I would say that this cost increase is basically more about the geopolitical escalations, if at all it happens. Therefore, for example, normalization would all depend on how that deescalates. But what we are doing is because those are beyond your control. What is in your control is how you can further optimize the cost. I gave a narrative of almost INR 150 a tonne in my initial remarks, whether it is logistics, whether it is green power, whether it is basically efficiency consumption -- efficiency of the heat consumption or the power consumption and also the clinker factor, very important because in the industry, for example, among the peers, I probably say that Adani Cement is the one which has actually reduced the clinker factor by 3-odd percent. So every 1% clinker factor has a good savings also. So I think we are expecting almost INR 130 to INR 150 per tonne basically cushion available, which we are focusing to have any kind of -- and we are expecting, if at all, this kind of say, geopolitical situation continues, ballpark about, say, INR 100, for example, potential rise in the cost. But I mentioned to you, I'm holding an inventory of clinker of almost a month, and I'm holding a coal inventory of almost 3 months. So I'm very well mitigated from that perspective. And on top of it, the initiatives to bring down the cost by INR 100 to INR 150, which will be a good mitigation to absorb any kind of surprises from any external factors.

Okay. That's also helpful. And then just lastly, if I were to look at demand -- industry demand and pricing, can you just give us a flavor for what you're seeing across some of your key regions?

Yes. Yes, Manish. So in terms of our key regions, I think we are seeing a good momentum coming in terms of, say, East, East is doing well. So is like West, we are seeing now where we have grown positively also both on the trade and on the B2B side. So for me, the key market remains, Manish, North, West, Central and East, all of them, for example, we are seeing a good traction. And that's how with confidence I mentioned to Navin also in terms of our estimates of guidance on the volume growth. So I think there is now a stronger excitement within the channel and in terms of a pull demand pool, what also is coming for our premium cement and our overall brand equity pool. So we are seeing a good momentum across this on South, I have to invest on the channel network, which we will do, which we are doing with lots of focus, and you will see a good improvement on that part as well. Meanwhile, we are also putting efforts in terms of doing some further improvation on the product with some R&D and all on certain product segment, which, for example, down the line, we will let you know how things are shaping on that. Essentially, the idea is to improve the share of blended cement, which we are. As of now, we are at 85%, and we want to further improve down the line.

We take the next question from the line of Indrajit Agarwal from CLSA.

A couple of questions. Despite improvement in trade sales, our ASP increase on a sequential basis has been one of the lowest in the industry. So is it more geographical mix? Or what exactly is driving this?

In terms of the growth, I think so we have achieved, say, 2% sequential growth, while Y-o-Y decline. But if I have to put some factors, which gets -- there are like different ways how you calculate the NSP. So I won't go into that accounting treatment, but one should consider that also because there are Incoterms, for example, some companies actually net off on certain expenditures. And we actually put certain expenditures, which are netting of the NSP compared to some of the other industry players who may not do it, number one. And in terms of the -- sometimes the works, which is in the input terms, the commercial terms, when it increases, it impacts your NSP also. So one would look at those factors. And therefore, for example, the NSP gets impacted. But from here onwards, I think what we are confident is the whole brand pool and the trade segment and the premium actually is going to differentiate our price movement also. And I think price is all market forces, which is well appreciated, but I would still bring the focus back to cost and which is something which is absolutely in our control, and we want to deliver most efficiently there and which will be a determining factor in our delta improvement vis-a-vis the year. And you will see the journey of NSP also will improve in line with the industry.

Sure. Actually, on that note, given that you already have substantial coal and clinker inventory versus the commentary of some of the other players of, let's say, INR 80, INR 100 kind of cost increase sequentially in 2Q. Can we assume at least on the variable cost basis, you are unlikely to have any cost increase in 2Q?

I would say that we will still have some impact, but I have given you the mitigation of that. Therefore, for example, on a net basis, we will be well in our line with the June quarter estimates and slightly better only. On a full year, we are anyways giving a guidance of INR 4 to INR 5 a tonne. So while I mentioned that there will be some element of surprise coming from the geopolitical tensions and all, and we are well mitigated with the overall, say, raw material and other factors which I've highlighted.

Sure. And what would be the CapEx number for FY '27 and '28?

So CapEx is overall, say, closer to INR 6,500 crores and which is well by growth and the efficiency CapEx, but that's like we are working on.

We take the next question from the line of Rajesh Ravi from HDFC Securities.

So first question, I think you have partly covered that on the volume growth. So full year, when you're maintaining 8% and first quarter, we have seen a sharp decline. So what gives you confidence that on a total basis, you would be able to deliver 8%, which would mean more than 10 growth in the remaining 9 months?

So Rajesh, I think the confidence is on the overall investment which we are now putting in terms of the focus on trade, the channel, the brand, the support coming now from the whole network, and that is what was what we wanted. And therefore, like even for the B2B, we are focusing on the key markets, which are high-margin B2B business. And it is, therefore, important that we are there in terms of the new capacity also, for example, which I mentioned to you, almost 10 million tonnes is coming, which will come in, say, different staggered manner, but those are also like going to improvement also comes when I have a source of flyers, which I have a long-term agreement, and it comes at a very competitive costing and the infrastructure of railway, which we created, the BCFC rate, which we have invested, all of this basically helps us to bring and move the material in the most efficient manner and get the volume share, more so on the trade side.

Great. And sir, sir, this trade non-trade mix 85% -- can we expect that in subsequent quarters, it would be north of 75% trade sales that will be the focus?

Absolutely, Rajesh, you hit the point. upwards of 75.

Okay. And sir, we hear that there is a lot of talks of merging ACC Ambuja brand into an Adani. So could you throw some light on that and what process behind that effort?

So Rajesh, no such plans for the brand merger. Whatever the plan is for the company merger, which we have announced.

Okay. Understood. And on the RMC, could you share what is the EBITDA number for the RMC segment in Q1?

We -- in terms of the RMC EBITDA for the quarter, we are at about INR 35-odd crores, yes. So..

No, I'm asking because on the last whole of 4 quarters -- this segment reported margins of close to 14% to 15%. And this quarter, this has fallen down sharply to 7% instead of...

Specific results, but is it like still a smaller segment. So I would say that I can spend time on that. But maybe we will discuss more. There are specific in terms of the overall sales the raw material pricing and certain financial accounting, for example, in terms of the lease accounting and all. But -- started this year and all here and there, for example, we can spend more time on this separately.

And lastly, of the total -- CapEx, how much we would have spent in Q1? .

Well -- almost closer to 2%. It's balancing out probably for the year, so 25% is there, around closer to INR 1,500 crores to INR 1,600 crores which we have invested.

We take the next question from the line of Raashi from Citigroup.

I may have missed some of the initial point, and you mentioned that trade decline 21%.

Yes, Raashi, you're right. This is y-on-y.

So why is -- given to the commerce -- focus a decline, like could you remanage like regionally, what was the dynamic accrual.

Yes. So Raashi basically Y-on-Y, for example, this quarter, had the seasonal most impact of all the geopolitical tension in terms of the diesel availability in terms of the -- if you -- issue on the backing back also for this was 1 part. And I think when you changed your gears, there are certain disruptions which happens. So I think now I mentioned to you, we have already seen about 8% Y-o-Y growth. I think I will pick from header that how things are moving. So that's the wealth we have done.

Okay. And the 8% that you mentioned was only trade, right? So 1 trade would still be negative. .

So yes, so again, the whole focus of our -- the decision will be let us say on trade, is absolutely right. And even going with the 1 of the previous -- of this quarter, earlier -- here on some of the clusters I mentioned to you, like North, we have grown 2%, on West -- we are like a high bit market West also we have grown, say, 2%. So selectively, we have grown selectively. We have degrowth. Some of them is well calculated because of the low EBITDA margins and all, which I mentioned now and we are focusing absolutely on value terms. 8% for trade and trade remains a high degree of my overall sales, it will be cold upwards of 25%, and then you can calculate and calibrate the volume growth.

Understood. And then -- I mean just a regional base that our overall volume in the overall or on a trade basis. Like reasonably, you basically witness a decline across in all regions on a year-on-year basis?

On the -- you're saying about the B2B, Raashi?

I'm talking about either total or the trade, in total actually on the total volume, it was down 7% year-on-year.

Good growth, as I mentioned, for example, even in B2B in the West side, we have both contain non-trade on the north, we have grown, particularly in North and East Easter sustained. So it is like selective. I mentioned that Southeast where, for example, we have consciously the low margin we have grown basically, which is the highest bison in that cluster. And center, for example, more we have degrown because we have moved into the blended cement as an offering and which has actually helped us to actually improve our margins. So we have been selective cluster by cluster.

Got it. And what was capacity utilization for you overall? .

Say 65%. But if I look at -- I think -- so yes, a 65% on a total basis.

Got it. Second question on cost synergy to stand this quarter witnessed INR 206 declined sequentially on your cost. Where is that the decline showing up? Because when I read the various heater presentation, then like power and fuel costs have actually moved up sequentially. I know that there's like how stock change impact. But if I have to look specifically, there on, have you got this 1 savings? .

So if you look at -- we have got the savings in Flyer in terms of efficient sourcing of the plans. In terms of the power, we have seen the Ari power, which has hitted the overall per unit of the power it has come down. We are like 2 primarily factors. Apart from that, my clean per sector, which has come down by 1%, that has been so good moment of my overall cost reduction. So this INR 206 improvement has come from combination of efficiency, the clinker factor marginally, I mentioned is, but Ari Power and Flyers has also given me a good frontage. And prospectively, also, they will keep giving advantage. Now so far as also what we are doing, Raashi is the optimization of the fixed cost, for example, and you will say that if it is commendable despite the capitulation being lower, my fixed cost as well. And a good speed of existence as well. So bilious factors, I can actually give a bridge on that, Raashi but I think -- the INR 206 has many conductors to sustain further and further improve from there.

Understood. -- is given...

After absorbing the INR 110, which ballpark, which we believe also has hit us from the wet escalation. So this INR 206 plus INR 110, if I have to gross it up, active my sharing is INR 316 actually on the cost side, I have digested that INR 110. And after that, our cost has come down by INR 206 per tonne.

Okay. you are given a number on wastage recovery in renewable energy, what is the total capacity now? What will it go to a missed that earlier on?

Now it is 228 megawatts, and this will go further to almost 376, so almost like another 140 megawatts which will inter -- basically -- we'll further add approval mentioned Sandy and Penman.

RE?

RE, Maven mentioned, so we are say 1122 basically for the RE and from the current 975-odd megawatts. So almost closer to 150 megawatts there.

We take the next question from the line of Ashish Jain from Macquarie. India.

Sir, my first question is on capacity. Why you have given a road map for fiscal '27. there's 2 parts. Now how do we see growth or capacity, let's say, '28, '29 that is one. And say, out of this 119 which includes some of the old capacities, especially of ACC, I think that we plan to permanently all -- and how should we think about that? .

Ashish, I will answer your second question first. In terms of the -- I think the -- the 1 we mentioned about the Modani answer is no. In fact, we are evaluating, and we are working to see how they're optimized. Therefore, that's like a temporary suspension. So far as the capacity for '28-'29 is concerned, I would say that now I want to just give you this confidence that bar of this year, we should be meeting 119.And for '28-'29, working then maybe every year, 8 to 10 million tons of capacity additions, and that's like how we will plan it out.

No, sir. I'm not looking for like numbers as of now. But we will be adding something or the other organic, I mean, in '28, '29 also?

Organic only. So like whatever we are discussing now is probably organic. And yes, so anything more, Ashish?

Sir, second, I would want to understand the cost impact a bit better. like this -- the incremental number that we are talking about from the breakup which you kind of alluded to, it looks like the large part of the incremental savings is coming from RE. Is that the right interpretation? .

Well, I think you have all the engines on file on the cost. One is the efficiency Second is the raw material. Third is the overall -- so of course, Adi power also and the fixed cost optimization. Yes, I think all of them, for example, we have a good focus on them. And there's a good visibility also because we have invested right? When I say raw material, we have invested in CFC infrastructure and the is, for example, when it comes to recently like 10 days back, this policy will we actually further improves the logistics cost when you move by the we have made those investments. And therefore, the incremental savings are coming from those investments, whether it is Ari power, whether it is in railways and so forth, but more importantly, the efficiencies also which are now coming on our brands. Like if you want some specific , I can share the numbers also, for example, in terms of, let's say, the efficiency factor, it is almost like INR 30 to INR 50 when it comes to the input material and logistics, it becomes almost a INR 50 a ton. The clinker factor itself brings another INR 50 per tonne and the fixed cost, for example, optimization will help me another INR 80 per tonne. So this journey, for example, from the 4,4,4,7 which we had reported in Q4 of FY '26. To coming to 4250 for -- 4241 for the first quarter of '27. I think we are like broad head in terms of specific numbers also. Yes. As I said, this is after digesting the INR 110 with West Asia war escalations.

We take the next question from the line of Ritesh Shah from Investec.

Couple of questions. First one, sir, how should coated, which has actually come through the ACC and Orion? How should 1 read into that? That's the first question. .

Ritesh, again -- advantages of no major, I think these ICDs are well within the approved mix of the shareholders. and there is a coupon of 8%. But now practically, it a platform. And I think that's what we -- the whole idea was to merge together all of this -- so I would say that these are all within the companies.

Sorry, I appreciate the compliance with all midget, but any specific reason of not raising debt at Ambuja level? Or if I have to put it the other way around, if I look at the debt maturity profile for Ambuja we have almost like INR 20,000 cores to INR 23,000 crores, which matures in FY '27. So should 1 make both the variables? Or how should we beadintoit? .

So the operating company, Ambuja has no debt. And so far as the -- if you're alluding to the parent company debt, I would not be the right person to answer on that. Coming to the Ambuja level, as I mentioned, 0 debt, and I think we are managing our cash flow from the operating cash flow, and we have a plan to sustain on that.

Okay. Sir, would it be possible for you to reflect on the SLAs that we have done for a few plants, how the experience has been? And I understand we are also looking to expand it to logistics as well. Is this for a particular market or is it on a panda basis? If you can give some numbers around Capex, OpEx cost benefits that you already derived or what we expect out of SLAs. .

So Ritesh we have begun on this early to come to you only. But I think let us mature on this. But things are quite positive. And I say that the overall vision of our Chairman and supported by Karan things are moving well in the direction on this.

Sure. Sir, I'll just squeeze in 1 more with regard to power and fuel. -- sort of a stated goal for 2030 with respect to TSR is 23%. We are somewhere at 5.7%, how do we plan to achieve this road map? That's one. And the second question, I think we have 4 cold docks right now. So 1 of it is operational. How should we look at the potential cost savings on both CSR as well as the core blocks?

So PSR, basically, which is the overall say utilization of the AFR, for example, that's what you're highlighting, right?

Yes, sir.

ASR, for example, while we are -- I agree with you that we are on a lower side at say, 7%, and that is 1 of our key focus area to immove this component of KPI, and you will see a good progress in coming quarters. We have highlighted to you before that our target is to achieve 25% of the ASR on the line. And right now, we are a little behind on that schedule. But every current quarter, you will see an improvement. .

But sir, is there a road map to go till the stated number because the number is quite stand the internal cost savings can be used over here.

Immediately, right now, for example, in this fiscal year, we are targeting to hit almost at 12% to 15%. Because see, when it comes to AFR, it's all a combination of how much is the basically cost of the , how much you want to basically save on the FY variola Global. Now as a rule, basically, we want to maximize this, and this improves through 10% to 15% in the fiscal year.

And sir, on 4 blocks?. .

The coal cost?

4 blocks I think 1 of the 4 blocks are operational what is the status of the other 3?

There are like 3 coal blocks which we are focusing. The first 1 will be operationalized in say, 2, 2.5 years' time. And just to circle back on the AFR, I think needful investments have already been made. Therefore, the confidence to hit say 15% is high. Yes. So coal block, the first 1 gets operationalized in, say, about 30 months from now.

Okay. So would you like to give some numbers on tonnes? .

No. I think it's too early. I mean like -- but the investments are all -- have a good data before you can basically understand these are like 5 -- you stay back.

We take the next question from the line of Amit Morka from Axis Capital.

Would you be able to share the regional volume mix in the quarter? .

So in terms of the overall volume mix, that is like for overall, say -- using this for the trade and nontrade, ballpark, I'm going to Halitsa -- the north is almost like closer to 25% for me. West is tad higher to 30-odd percent. East is also like 25-odd percent. This becomes almost 80% and then 10% is the center and 10% is south, ballpark -- breakup.

Sure. So would the share of South be lower in Q1, given what you just mentioned earlier in the opening remark? .

Yes. I'm like -- you mean to say Q1 or Q2?

Q1 so you mentioned that in South, basically, you have degrown in both trade.

Yes, Absolutely, absolutely. So like therefore, like compared to say last quarter and also last year, south my percentage is lower this time.

Got it. So it seems to be -- that is 1 of the reasons as well for better cost performance, right? Because we know that South is higher clinker factor market as well as a higher cost market in that sense of service, particularly in a quarter where fuel cost...

That is the true, that is the whole focus, absolutely right.

Got it. And secondly, on Green Power -- the sales you mentioned like INR 44 crores, INR 45 crore unit sales of power. What is the EBITDA number of that? .

The sales revenue, I can say, for example, ballpark around INR 140-odd crores is the sale number for the quarter.

Right. And most of this will be EBITDA because these are all -- I mean your own units, right? .

Yes,. These are all because we are all like based on the investments side, absolutely right. It's very much portent parcel of the business.

Yes. What I meant to say the OpEx will not be too high for this INR 140 crores.

Hardly 5%. I mean like otherwise, it's all adding to the bottom line.

Got it. And lastly, like when I look at your -- the mix of trade nontrade, like last year, Q2, it was actually pretty high. It seems that 32%, 33% was nontrade actually and trade was a bit low at 67%. So when you say that the trade is growing 7% or so in July, the non-trade is continue to be a big decline because that would imply that the overall volume would still be low in Q2.

I think -- totally handling nontrade also. So it's not going to be that big decline, for example. So overall, we will be able to manage our volumes in line with the guidance which we have given.

Sure, sure. And just lastly, if I may ask, So while you mentioned the cement cost number, which is obviously different from the overall cost per tonne when we calculate it. Similarly, like for cement realization as well. Could you provide a number just to get a like-to-like comparison because EBITDA is blended right when you report EBITDA per tonne in the PPT, so similarly, if you want to just calculate what was the cement EBITDA per tonne, could you give a clean realization for cement..

My EBITDA per tonne for the gray cement is INR 911 per tonne? Yes that's the number I have. RMX and grey cement, so like grey cement is INR 911.

That is the overall EBITDA, right, which includes EBITDA for RMF.

Okay. Sure. Maybe confirm this a bit later .

We take the next question from the line of Pinakin from HSBC.

I have 2 questions. My question is that the filing mentioned that some manufacturing operations have been shut down. So can you just highlight what are the manufacturing operations, what capacity has been shut down? And my second question is that there seems to be some ICDs from ACC orient to the parent. So any particular reason for the ICDs given that the company already has access at a group level at that cash end at the Muja Group level?

So basically, in terms of the temporary closure of the plant. Basically, this is like temporary because we are anyways working on optimizing it. The capacities are closer to about, say, around, say 3.5-odd million tons of an capacity, number one. What was your second question?

The ICs from the subsidiaries to the parent. The ICD Yes. So IT some, I think, HEC and orient cement to the parent, what is the particular requirement for it at this point of time, ajar at the Ambuja level?

No. So like as part of the whole MSA commitment because Ambuja has the higher share of the capacity and therefore, like Ambuja is supplying the materials, this time, you have seen that almost 1.6 to 2 million tonnes of cement has been supplied. How much? 3 million has been supplied to HCC by Ambuja. I think this is like part of the whole energy arrangement in wherein the investments which have been made by Ambuja, the benefits are also being received in terms of volume by SEC Orin and everyone within a cement. And that's how the its are ensuring the preferred payouts also to the respective continents.

We take the next question from the line of Prateek Kumar from Jefferies.

I have 3 questions. Firstly, can you discuss the time lines of the -- quarter time line of this 3 million tonnes our clinker and 4 million tonnes Marata clinker?

See, Marata, we are expecting to commission next year. And that is what, for example, we have planned. So far as Jodhpur is concerned, we already have seen trials started. And in Q2, which is in this current quarter, it will start stabilizing and supplying to my running units.

Next you mean Marata is like financial year FY '28?

First, yes. So like absolutely, first quarter of next year.

Okay. Other question is on your costs again. You have done this quarter, INR 4,240 crores kind of cost full year, INR 4,250 crores expectation. So basically, incremental cost impact of inflation will be absorbed by incremental savings? So your full year cost remains same, what you reported in Q1. Is that correct? .

Absolutely, well summarized by you, Pratik.

Okay. Last question. Can you is because your PPT first time mentioned of a sale in power sales, can we get the cumulative revenue and cost of flyers and power sales in 1Q and 4Q to get an exact calculation of cost per tonne.

So Pratik, I mentioned to you that these 2 components, basically, which are basically closer to INR 45 crores of units, which we have sold in Aripower and Flyers,I don't have right now with me, but I can circle back to you.in terms of what tons of fly has been sold.

So I'm looking to revenue and cost for these 2 line items cumulatively, I don't require like separately.

Let me -- on this point, let me just circle back once I have the details on this call or maybe separately.

[Operator Instructions] We take the next question from the line of Pulkit Patni from Goldman Sachs.

I don't know this has already been asked. But my first question is the plants that have been suspended, any time duration for which they have been put in the suspension? .

So around 6 months, basically. .

Okay. So we should not expect any volume throughput coming from those plans for the next 6 months or it's in total 6 months? .

Total 6 months, basically.

And sir, my second question is more bookkeeping. The depreciation number is much lower in the quarter. Any specific reason? And what's the run rate that we should keep for the next few quarters? .

Yes, I will request Rohit, my CFO to answer on this.

If I can add to here, the depreciation upgrade would stay at the similar level in the last quarter due to the pruritis, which were taken on account of the merger of Sanguine,; the depreciation was higher Q-on-Q. Otherwise, it's going to be at the similar level at this touchpoint. .

We take the next question from the line of Rahul Gupta from Morgan Stanley.

Two questions. First, with data keeping. You mentioned that power revenues were around INR 140 crores in the first quarter. Can you give us the comparable number for fourth quarter?

So for the fourth quarter, the question was about the power revenue -- in terms of the -- I can highlight that in the fourth quarter, which is March '26 and over the year, just give me a second. -- almost the INR 70-odd crores is the number for power.

And this was INR 45 crores unit -- order, right?

No. For fourth quarter, the units would be lesser. So in terms of the overall sale, this was around INR 24 crores of units for the fourth quarter.