HeidelbergCement India Limited (500292) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the HeidelbergCement India Limited Q3 FY '22 Call hosted by PhillipCapital (India) Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.

Thank you, Aman, and good afternoon, everyone. On behalf of PhillipCapital (India) Private Limited, we welcome you to the Q3 FY '22 call of HeidelbergCement India Limited. On the call we have with us Mr. Jamshed Naval Cooper, Managing Director; and Mr. Anil Sharma, Chief Financial Officer at HeidelbergCement India Limited. I would like to mention on behalf of HeidelbergCement India Limited and its management that certain statements that may be made or discussed on the conference call many forward-looking statements related to future developments and the current performance. These statements may be subject to a number of risks, uncertainties and other important factors, which may cause the actual developments and results to differ materially from the statements made. HeidelbergCement India Limited and management of the company assumes no obligation to update or alter these forward-looking shipments, whether as a result of new information or future events or otherwise. Also, HeidelbergCement India Limited has uploaded a copy of the Q3 FY '22 presentation on the stock exchanges and its website. Participants may download a copy of the presentation from these websites. I will now hand over the floor to the management of HeidelbergCement India Limited for the opening remarks, which will be followed by an interactive Q&A. Thank you, and over to you, Cooper sir.

Thank you, and good afternoon to everybody for your presence. If you have downloaded all the presentations, I will run past by this. Yes, this quarter indeed has been a very traumatic one for reasons of the cost increases, which have been very severe. And the impact, we get is unprecedented impact we have seen in the month of this quarter was the low demand because of infrastructure low spending and the market did not move to the expectation. And the double whammy was power and fuel cost was through the roof. So we suffered. But yes, I think nothing to worry about it. So the volumes were down by 11%, the cost up by 13%. We could increase the price a little bit and got some 2% relief out of it, pass it on to the consumers. But given this current situation, I will talk to you later on also, but as of now, the quarter has been not a good one. I think this would be one of the rare ones, which we have suffered. If I look at the other areas of our business, on alternative fuels, we started on the ESG. So that is a very good thing to have happened to Heidelberg that even now today we are with running AFR. And the target is to run to about 8% to 9% of TSR we should reach as soon as possible. On our 55-megawatt solar power project and our sourcing of third power for 15-megawatt at Jhansi, I think this is all under way and it should happen start triggering from this month onwards or late -- early as next month, some of these [indiscernible]. So there is a positive side to it. Share of green power is about 20% for us with 100% blended, so we are fully covered from the ESG side. We are -- on a carbon footprint, we are far ahead on many of our colleagues in the industry. We operate on negative net working capital. That is also the silver lining there. And on a net cash balance basis, we are about INR 181 crores of cash surplus. I have spoken to you about -- going to Page -- Slide 3 -- Slide 4. You can see the picture of the WHR -- the AFR plant which is in operation. And on the right-hand side of the picture, you can see that 5.5 solar projects are ready, okay? As far as the AFR is continuously we are getting, but there can be some glitches here in AFR. Sometimes it happens because we are using biowaste. So sometimes it does not come out otherwise. But we are creating capacity to store about 4 to 5 days of stock of biowaste, so we can run this plant on 100%. We have reached as high as TSRs of almost 9% of TSRs. On some days, we can -- we are able to meet. That means the plant has proven its capability that it can deliver higher TSR. But it will take its time to stabilize. But 4% to 5% of TSR we are guaranteeing that it will happen now. Coming to our environmental footprint, you are seeing on Slide 5, this is a very unique activity which we have started somewhere in 2015 and now we are continuing. The target was to get the ambient temperature inside our plants to 2 degrees lower than what it exists 1 kilometer away from the plant. Very happy to say that a rearview in the previous quarter, we had clocked almost 1.6. Now we are at 1.7, so there is an improvement. And the Jhansi, of course, we compare all the units together. So as a group, HeidelbergCement Group, India plant, which includes Zuari Cement plants also. The second unit among our India units is Jhansi, which has crossed 2.2 target. So we are very happy that Jhansi team has really worked to see that they are able to achieve a better environment, work environment in their area of operations. On CSR initiatives, Slide #6. We are now making classroom smart by putting boards in classrooms. So there is an obligation there on terms of CSR also. So on Ammasandra, we are giving school children kits, educational kits. Another important part is on Slide #7. We had given a commitment to the government -- to the local government, which is at Damoh plant, to put up an OPD center. So we are creating this center under the CSR activities, which will be one of its kind. And it will be very big respite to the people of Damoh. So that's the investment we are making, and that is in the progress. Rural health checkups and other things are continuing as it is. Now coming to the basics of our business if you are waiting to hear, which is on Slide #8. On -- if I look at -- if I take exception months, which is exception quarter at December, and if I look at the 9 months, trailing 9 months, okay, we have had a volume growth of close to 11%, which I think we should appreciate more than getting bogged down with 1 quarter of bad quarter, which is not -- which does not set any precedence, neither it sets any tone for the future. So this will come back from the cloud because we had this COVID. After COVID, we had this Omicron variant. So one after the other, and the fuel prices and the benching trades, which are going up through the roof, will cause the concern. And it will not end here. It may continue also but let us look at -- focus more on the Indian domestic demand, okay, how does it stack up. I think the demand in India is going to come back, and it will remain strong. People have made good amount of money in the stock exchanges in the retail investor. We should flow that again into the retail -- realty sector, and we should see again a boost in demand for housing. Coming to the reason for decreased profitability. As I said that the major area for us has been fuel. There might be some -- I'll discover up with further also. The volumes -- of course, the volumes took a hit. We took a hit on generation because when the volumes go down, we cannot produce electrical power to almost in the quarter. By a quarter-on-quarter basis, if I look almost 2 gigajoules of power we could not generate. If we generated almost 15 gigajoules of power in the December quarter, now we have -- could generate 13. So that adds up -- all these adds up to it. Now this is the slide where I can spend a little -- give you more details on Slide #10. You can see the power and fuel, how it has impacted us on a per tonne basis of cement. Then comes the raw material. The raw material is also inclusive of our packing material. So the granule prices shot up significantly through the roof because of the PC prices that is baked into this. The other part is when diesel prices go up, your transfer of clinker, which is almost more than 50% of the clinker we transferred from Damoh to Jhansi, so that cost is baked into this. So this is where -- we take our clinker transportation, logistics cost also under the part of raw material because it is a raw material for some other units. And that has also come here. So these are the 2 factors, which has led to this INR 167 per tonne increase -- impact on the EBITDA margin. Coming to the other things. I can think, this INR 47 which is there, we can discuss if you have any points on this. There are 3, 4 issues there which we have [indiscernible]. One was also the unseasonal times of -- I'll request Anil to dwell on all the 4 points of -- which are there.

Maybe after your presentation.

After my presentation, you can dwell on all the 4 points which are -- which has led to this INR 47 increase. But let me tell you, it is nothing a matter of concern for us because there is some advertising costs and other things. Don't take it as an expenditure, take it as an investment. You will see the returns coming on in the long run for this INR 47 will give us more returns in the long run. Interest-bearing loans, you wanted to know -- if you want to know, this is how it is. Now we are -- almost on a net basis, we are a debt-free company. These loans, which are interest-free loans. These are bullet payments, which will happen in the period of 2026 and still we sit on cash. Coming to our -- the key points of our business. 45% of our volumes are moved by road, where we have to reduce our pet coke. Earlier, we were firing almost 70% pet coke now, which is total reverse. It is 69%, 70% has come to coal. You can see the difference between pet coke and fuel -- cost of fuel, it is significantly higher -- pet coke is significantly high. But when we do this pet coke, when we reduce the pet coke, we have to increase our sweetener consumption also. So there is a negative impact on that count also. So all that gets -- is all linked one by one. Coming to our high premium products, we are good at around 22%. We have clocked [indiscernible], so this is a very reasonable figure to achieve, between 25% -- we'll reach 25% in the year or so, it is good enough. But at the moment, we are not pushing these products too much beyond a point. 77% is close to our trade sales. Nontrade took a beating, and trade also took a beating. So there is a difference in a little bit of realignment in the percentages. Earlier, we had started clocking almost 85% of trade. So that has slipped a little bit. Our work, whatever work we do gets also due recognition. So you can see the accolades which have come to us. We were awarded -- recognized as the 3rd Fastest Growing Cement Company in medium category by the Indian Cement Review. So there is one of these awards. Under the CSR Award, we got a silver category in 8th CSR Times award for rural development. These are some pictures of our team -- our technical director and his team are taking -- receiving the award from Honorable Minister, Mr. Pralhad Joshi. While we talk about ESG and other things, okay, on energy, we are very conservative. We are focused extremely and Jhansi has got the privilege -- distinction, I would say, of the sixth consecutive year being awarded as -- for the energy conservation. Going forward, coming to Slide 16. We have seen the budget outlay has increased into, so we can hope that there will be something good for cement demand on this side. GDP is forecasted to grow better. IMF has already improved the rating from 8.5% to 9%, so we should hope that GDP continues to grow. And then if GDP grows at 9%, we should expect cement to be around 9%, if not less. That's the growth we should see. Third wave of the COVID is now -- people are getting used to it. Life is getting back to normal. But let us not conclude that the pandemic is over. We never know what is around the corner hidden for us. Fuel cost almost doubled, almost we have seen on our fuel has just gone through the roof. Very difficult times, but let us not be very hopeful that the fuel will come down to yesteryear levels of when we saw pet coke at $48, which is not going to happen. At least in the foreseeable future, in a year or 2, I don't see that happen. On power distribution, we are expecting that too soon, we might see some power tariffs going up, so we should be prepared. We are preparing for that. And that is why our team is working on renewable energy third-party sourcing on power generation through solar power plants. And our AFR, if we can reduce -- if we can improve output through our WHR also, so that will be our main focus areas. With -- another thing which I want to -- before I conclude this, I want to add is that cost pressures because of the fuel and everything is so much enormous that cement cannot remain at this level now. Cement has to -- the cement prices must -- I think they should go up. It is our constant endeavor -- at HeidelbergCement India, I am telling my team that we have to pass on the cost increases to the consumer. You cannot keep it with you because it is unfair to the shareholders clearly. So we are -- every day, we are trying to see that somewhere we can take bites from here and there and improve our margins. So we have been increasing prices with very, very small increase. We have done it in the month of February -- in the month of January, minor, we tried it. We tried something, but we had to roll back. But we did take some benefit out of it. We increased by INR 5, rolled back it by INR 2, INR 3 here and there when the market did not absorb it. But there is some gain, which is gradually coming in, but the volume should now start coming in, that is major concern for us. On Slide #17, I want to mention that we took a little bit an aggressive stand on our social media. This part also is part of our other cost you can see that. These are all -- we are getting a number of -- now more people are attached to us. We have revamped our website. This was the need of the hour. There are many customers who want to see us in better light. They have been recommending that to improve, provide more information to them through social media and other things. So that is what we are trying to address their needs. Because the new-gen customers are more on social media, and they are wanting to know about the company and about the products and about how we can benefit from the company. So we are using these media from our side. This is all from my side. Very happy to answer your questions. Anil and my team, everybody is here to answer -- take your questions. If we have missed anything, we will definitely answer it to the best of our abilities. And we want to keep our business as transparent and clear as ever. We want to give to our investors a comfort that we are -- we will tell you what it is. We will not try to do anything, which is -- we want consistency in our business. So -- but of course, we cannot -- you'll have to give us -- pardon us for any extraneous pressures, which come because of demand and other things, which we are not able to foresee sometimes or are not able to manage. And it is not possible to manage either. So thank you once again for staying invested with us and giving us a sense of confidence in us and holding us in the right spirit. Thank you very much, and over to you, Vaibhav.

[Operator Instructions] First question is from Shravan Shah from Dolat Capital Markets.

Sir, simple basic question is how do we now see the overall cost moving up in the fourth quarter? Will -- can we see a further increase because at this time our raw material cost including the change in inventory is significantly increased Q-o-Q? So that is one. So entire -- all the cost line items, so how much we can see further increase? Second, on pricing front, last time, we have said strongly that it will be increasing significantly prices every month. You have already given that by November and December and January, we will be seeing INR 500 per bag, which is not happening, as you said, that INR 5, even the January hike, you have taken a rollback of INR 2 to INR 3. So how do we see the pricing or the realization for us going forward? So to get the ultimate understanding, just trying to understand how do we see the EBITDA per tonne in the next quarter. Can we see a significant improvement?

So Shravan, just to answer that when I made this comment that we should see these high prices, it was based on that with such high cost coming in. I think it will -- nobody will be able to keep the price with them, okay? They will have to pass it on to the consumers. But probably the industry was not able to pass for whatever reasons. I cannot say for others why they did not. Because for me, there is a price elasticity. If I take a price increase of INR 10 and if competition or the others don't take similar increases. There is a price parallelism which happens in the cement industry. The differences can be between competing brands depending on which brand level you are competing. The elasticity can be INR 5 to INR 7, okay? Beyond that, you have to fold back again into the same deal. So I cannot tell you why the prices have not gone up. But today, I'm sure that everybody has exhausted in this industry would have exhausted, I would suggest. So that they would have exhausted their own low-cost inventories, okay, their low-cost materials. And now they must be having all materials, which are inventory, which would be high priced. So there is no way, but the way is only one way through the tunnel. You can't go back into the tunnel. So now it will force you through the -- smoke you through the tunnel, and you'll have to come out of it, and you will have to increase prices. Coming to quarter 4 on prices, I'm sure that prices should go up. These are the good demand months also. So there is no reason why the prices should not go up. We have seen good production in the quarter -- the third quarter. I think this inventory would have also piled up a little bit. January, they would have been able to exhaust the inventory. And from February onwards, the prices should move up. That's my feeling. Coming to your inventory cost of fast and going forward, I think the prices will remain same. I think the cost will not come down significantly. Minor here and there, small things may happen, but not significant. Let us not give you any picture which is very nice for a very good-looking picture or tell you anything which we do not expect it to happen.

Just to add with respect to cost part, I think we need to also understand that some of the costs, like diesel prices because of their transportation cost is higher, which resulted into higher [indiscernible] cost. Then granule prices by the refineries, they have increased significantly during the last 1 year. And taking cost because of that has increased between 30% to 40% during the last quarter. With respect to our raw material prices, with respect to our fuel prices, this is pure external things. And in the near term, we can say that, okay, that may continue. Maybe there will be some softening on account of petrol prices, which we have seen in the month of November or December, but cost will remain on that account in the coming 2, 3 months. Now with respect to this other expenditures, I think this expenditure per tonne basis seems higher during the December quarter. But in absolute terms, as compared to corresponding quarter of last year, it is slightly reduced. And there are 2 kind of costs we grouped under this other expenditure. Some of the expenditures are fixed in nature, either traveling or maybe the -- our administrative costs. And some of the expenditures are variable in nature that is related to operations of the company. So the handling cost and some of the cost related to recent taxes like limestone royalty and other things. So on increase or decrease of the cement production in the cement this stage, cost may go down, which are the variable in nature, but cost may also be static if these are the fixed nature. During December quarter, after second wave, when the -- July, August, when the COVID and Delta were actually start reducing. Some of the activities, which we have stopped during the last 1 year, especially our dealer mix and the people who are going to market, those have been restricted or limited in the last 1 year or 1.5 years. So during this Diwali and the month of December, we started moving to market and started meeting with our networks. And also, we have started doing some advertisement, especially digital media, and wall painting. This wall painting and holding kind of things were almost stopped during the last 16 to 18 months, from March 2020 to -- up to until August 2021. Some of the expenditure in other expenses are maybe of the fixed nature, but we have revamped and increased it a little bit to sustain our market share in this [indiscernible] market. It seems on a high side on a per tonne basis because of the lower volume, but I think going forward, we will be back with this on same per tonne basis on the other expenditures. Mr. Shah also has raised one point with respect to inventory. So Mr. Shah, if you see our trend of the December quarter of 2020 or even in the past years, our inventory always decreased because in the month of November, December, we took plant shutdown of our kiln so that we should be ready with our production capability and efficiency when the peak season starts from the month of January. This year also, we have done same thing. If you compare our inventory decrease amount or the trend of the inventory decrease amount with the December 2020, you will find the same trend happened. Yes, as compared to September, September, our inventory increased and that we do in order to have the inventory post-festive season. So that time, we tried to increase as on 30th September. In December, we tried to reduce our inventory by taking these shutdowns. So these are the development, and those are the very material development happen in the December quarter. And always, you'll find the December quarter, this kind of shutdown.

The last question is, in terms of the volume for fourth quarter, can we see Y-o-Y growth in the fourth quarter? And the 2 data points, what's the -- net debt, you have mentioned, INR 1,811 million, but what's the gross debt and gross cash and how much CapEx we have done till now?

So -- as far as the cement is going on last March last quarter, we did INR 1.25 billion. Okay. And so we will -- we are working on that, but we should at least be there.

And on the CapEx side, our CapEx, we have taken normal sustainable CapEx, which is almost 35% to 40% of our annual depreciation that amounted in the range of INR 500 million, INR 50 crore for this fiscal year. And during '21/'22 fiscal year, we have taken 2 projects related to sustainability. One is our alternative fuel project. Total investment we did for this project is INR 16 crores in 2 years. So in the fiscal year '21 also, we have incurred half of the amount, and then the remaining amount we incurred in December. That is the total amount of INR 6 crore to INR 7 crore came during the current year. And then we also invested CapEx for our solar power plant. So during fiscal year '21/'22, our total CapEx will be in the range of INR 75 crores. Out of that, we have incurred almost INR 50 crores, INR 55 crores in 9 months. And balance we will do in the remaining 3 months.

Sir, lastly, cash and gross debt number -- gross cash and gross debt.

So for the gross debt and cash balance also in the March balance sheet, the total amount which is we can say net debt level is higher as compared to September quarter. September quarter, our net cash balance was around INR 1 billion. It increased to INR 1.8 billion at this moment. And this is happening on account of better working capital optimization. And during this quarter, we have repaid our INR 1.2 billion total loan. If you see this -- one of our slides in our presentation, there you will find the total bank balance also, which is INR 4.1 billion, so total INR 415 crores is the gross cash and bank balance.

[Operator Instructions] Next question is from Rajesh Ravi from HDFC Securities.

Sir, my question pertains to the scenario in the central market with multiple players entering that market, UltraTech expanding capacities, even ACC and JK Cement would be increasing their capacities next year. What is the sense on the market? And where is Heidelberg positioned in terms of its CapEx, capacity expansions and volume growth visibility?

Okay, Rajesh, we -- as you said -- know that in March of '20, we debottlenecked and added almost close to 1 million tonnes, okay? We will be adding a little more quantities in the next few quarters also in '22, '23 by debottlenecking. Right now, we are operating at 73% utilization -- capacity utilization for the quarter. We have got enough headroom right now. So we will not lose market share. If that is the question, that is the answer to it, yes, we will not lose market share. Growing capacities in this particular market in Central region, it is not possible as of now because after this debottlenecking, we will add about another 0.5 million tonnes net. And then it will be -- then we'll have to sustain this. To sustain market share on a -- as a company to retain its market share, we are looking at the greenfield project, which is in Gujarat, which one -- which we are working as of now. So the competition, in terms of competition, yes, competition has increased. But ultimately, we have to learn to live with competition. Everybody has to live into a world of competitive environment. We are not concerned about the environment because today also, when the capacities are coming up, we have enough headroom for today also. And I think every cement company has the same. Everybody is operating around 70%, 71%, 70% in Central India. But luckily in Central India, if I look at it, in quite a few months, we operate close to over 80%, 82% also.

Okay. And this greenfield expansion, any time lines by when you would start groundbreaking or any -- by when this project could be [indiscernible]?

So Rajesh, we are working with the government to get us approval for environmental clearances and things like that, which is regularly being monitored month after month. It takes about a year, 1.5 years to get the environmental clearances. Once that comes to us, then we will do the further work on it. Some amount of CapEx will happen sometime in '23. We hope to start something in '23 if everything goes right.

Okay. So '23, you would plan to -- if the EC is achieved, after that, this being a greenfield another 3-year before this could be operational?

3 years.

3 years. So FY '23, plus 3 years, FY '26 somewhere...

Project is not that even that you cannot see the project. But ultimately, once the clearance comes, you can put up a plant in 24 months also.

Correct. Correct. Yes. So primarily in North, Central market, you would peak out at with 0.5 million tonnes incremental capacity enhancement. This is clinker, you said, right?

Yes, this is cement, basically.

Okay. Any clinker debottlenecking also you are working on, sir?

Yes, we are deterring will add up to it because we already have enough grinding capability we have. So we have to now augment on the clinker. So that is unlikely we are working on coolers.

Okay. And on the merger of Zuari -- the amalgamation of Zuari, any thought on that, sir?

The group has given guidelines on those. We are working on it. It will happen, it will take time.

[Operator Instructions] Next question is from Utkarsh Nopany from Haitong.

Sir, my first question is on -- again, on market share. So if we see like we have increased our capacity, say, from 5.3 million tonnes to 6.3 million tonnes through debottlenecking around 1.5 to 2 years back, but still, our sales volume is down by 4.5% on a 3-year CAGR basis, whereas our major peers have posted positive volume growth over the same period despite no increase in their cement capacity. And what we are observing that new -- few new players have entered into the Central region, and they have been able to successfully ramp up their capacity over the last 2, 3 years period. So sir, can you please help us understand what is the reason for the same?

I don't know where you are seeing the ramp-up capacity. The only player which operates in the south of our plant is Prism Cement, okay? So I have not seen that they have ramped up their volumes anywhere. Okay. Yes, there are other companies which are bringing cement from other towns, other cities. They might have been selling more. So it is not an apple-to-apple comparison, I would say. And all said and done, during the COVID period, everybody has lost volumes here and there. If you're an all-India player and if you are posting an all-India higher volumes, that does not apply to us in Central India. But Central India demand is close to about 48 million tonnes of capacity, which is about 50 to 53, around that much, it is happening. And most of the cement which is being produced also in Central India is finding its way out of Central India. So that is not -- it is not disturbing the equilibrium. Ultimately, there will be some minus 0.5% here and there 1 quarter or half of next quarter can happen. But if I look at my last 5 years of data, we have not lost market share.

Okay. And sir, considering that a lot of new capacity is likely to come up in Central region over the next 2 years, so wanted a sense from you that by when we can expect our existing capacity to be ramped up to earlier level of 90% rate.

93%, it is just only a matter of demand. Today, also, if I look at it, last month also, our plants operated close to about 80% to 83% capacity utilization. So it's a question of demand. If we get the demand, we will [indiscernible] the material, not an issue.

Okay. And sir, can you please provide the detail of capacity expansion plan for Zuari Cement, say, over the next 3 to 4 years from here?

Zuari plant?

Yes sir. Zuari Cement, the capacity.

[indiscernible] Is it that we're not a listed for.

Okay. And sir, what is the reason for sharp increase in other expense in December quarter? Was there any one-off included in other expense?

As I said, there is nothing as such.

Mr. Nopany, what we have explained that this expenditure -- some of the expenditures are of the fixed nature. If you see the total expenditure, it's -- compared to corresponding quarter of last year, it has not increased in the absolute terms. Yes, on per tonne basis, there is an increase of around INR 60, INR 70. And there are 3, 4 elements actually what we have done from the regular nature. In December quarter, those things we could not do during the last 18 months because of the COVID. One of that thing was our dealer mix, then the wall painting. During this quarter, we have started our digital advertisement also. And again, because of the relaxation by the government, the movement of the people have started and some of the traveling and other expenditures also have incurred during this quarter. So those are the regular nature of expenditure. But when we compare with the corresponding quarter of last year or the September quarter, some of the expenditures had increased during December quarter, and it will be normalized maybe in coming months.

[Operator Instructions] Next question is from Sanjay Nandi from Ratnabali Investment Private Limited.

Sir, just a few questions from my side. So what is the current clinker utilization for this third quarter?

The clinker capacity is close to about 61.5%.

61.5%, right, sir?

Yes.

And what has been this clinker to cement conversion ratio, sir?

Clinker capacity utilization.

Yes, clinker capacity utilization.

You wanted clinker utilization. Clinker utilization was 73%.

73%.

73%.

73%. And what was the clinker to cement conversion ratio, if you can kindly share?

That is what I meant. Clinker factor we absorb almost close to about 24.5% of [indiscernible]

Clinker factor is 61.5%.

61.5% clinker factor, right. Okay. Okay. And sir, did we take any price hike in the first month of this quarter? Like January is already over. So most of the companies are taking a price hike.

No price hike. As I said that around sometime in -- around 20th we tried some -- attempting some price changes. We did one on -- we did some change on 7th of the month, then we did something on 15th, 14th, 15th of the month but in small, small pieces. Some of them were successful. Some of them were not successful.

Okay. So do you plan any kind of price hike, sir, going forward from the month of February, as you said, sir?

Yes, we are increasing. Now we are increasing every Monday some price or the other in the market. Somewhere in small pockets, wherever we are seeing that there is a -- demand is coming up, so we are increasing prices. But it is a very small, but that will be permanent increases. We are not wanting to give one price and then take it back and then roll back the prices. That does not leave give a good figure feature to the trading community. Trading community requires the stability of prices. They require consistent prices.

Got it, sir. Sir, in this quarter also, we would find that we have taken some improvement in relation we could see like in the quarter 3 compared to quarter 2 of this year. So does it happen because of the mix of change in your mix? Or is something -- improvement in realization?

So it is basically the market prices we have to take the prices up. Otherwise, you have seen cost has gone up by 13%. We have increased the prices only by 2%, which we could have passed on the entire 13%, and would have been smiling our way to front of you.

So you mean to say our mix is overall same, right, in this particular quarter?

Yes, this is actually -- it's almost same.

We only deal with [indiscernible] product. So there is no change in the product [indiscernible]. And you have also seen that our [indiscernible] sales is in the range of 75% to 80%, so that remains also same. There is no change in the mix of the product or -- and no change for the sector.

Next question is from Roshan Paunikar from JM Financial. Mr. Roshan you're requested to be a bit loud, please. You're not audible clearly.

Yes. am I audible now?

Yes.

Yes, please.