Thank you very much, sir. We will now begin the question-and-answer session. We have the first question from the line of Indrajit from CLSA. Please go ahead.

Hi Thank you for the opportunity I have two questions first Singhi ji thank you for your contribution to the sector not just to the company we have learned a lot from you. I just want to understand the management structure post these changes. So, Mr. Dalmia currently holds the MD position in both the entities. So, would that be the structure or are we looking to make some more hires, or we will continue with the current structure?

Can you please repeat the question?

So, as you would be taking over, Mr. Dalmia as the MD of the operating unit DCBL as well. So, would we continue with that structure? Or are we looking to hire externally for the MD?

No, this is going to be the structure. Mr. Singh i is transitioning and he will continue to be associated as a Strategic Adviser to me in the group. So, there will be complete continuity. And this is the structure where I will be the MD and CEO of the operating company as well.

My second question is on the Jaypee acquisition. Now, this has been delayed a couple of times. So, what is the current status now ? Where is it exactly stuck? And how confi dent are you to complete it within this fiscal year?

So, as we told last time also, we have to get approval from several banks for closing this transaction. And I think there are about 35 banks to process this. And that is taking a little bit longer than what we expected. We are quite confident that we will be able to conclude this transaction by the end of this fiscal year.

Thank you. We will take the next question from the line of Sumangal Neva tia from Kotak Securities. Please go ahead.

Good Afternoon and thanks for the opportunity my first question is on the volumes if you could share what is the tolling volume in this, the number which we have reported?

It’s a total 3 lakh tons in the quarter.

So, continuing on the volume part, I mean, this looks like the second quarter where we have lost market share, whereas in the last call, we did share that there is some strategy which did not work out and we are kind of changing and from say Q2 onwards we will kind of recover the losses. So, if you could just explain a little bit on these three parts, one, what has gone wrong or what is not working ? What are the changes we are doing it ? And the third part is from next quarter onwards can we expect to continue or going back to old ways of growing at least one and a half times the market which has been guided in the past quarters?

So, I think we already explained in the last earnings call that we took certain pricing decisions in East which we think it did not work out as we had planned. We have already made corrections and I think we are going to start seeing results of that from Q4 onwards. We expect that we will continue to grow faster than the industry in the coming year despite the short -term blip. And I think we are very confident about our own marketing and sales strategy. We are also going to invest in a brand building campaign, and you will see that in the coming quarters.

So, when we say Q4 onwards that means this year, we will continue to kind of underperform and then maybe from next year we should kind of expect the recovery?

Well, I mean, I spoke specifically about the Eastern market. In rest of the markets we are gaining share. And like, for example, in Central India, we had literally no presence our brand has already started gaining very good acceptance. And I think we will continue to further build on this. It's a market which is quite attractive, in the Northeast we are doing very well. So, there are some pockets where we have already taken steps which will impact sales, and I think you will start seeing that results from Q4 onwards in those markets.

Understood. Just one last clarification I missed the opening remarks , is there any one -off element, any write back or anything in the cost items?

: In the current quarter as well as the previous quarter we have got a buildup of the inventory. So, that, as per the accounting policies, includes the fixed cost buildup in the inventory, so which will get corrected in the coming six months which may have an impact of about Rs. 25 per ton. Besides that, I think the rest of the transactions are normal and very small impact will be there of any reversal of provisions.

Got it. Thank you and all the best

Thank you. We will take the next question from the line of A mit Murarka from Axis Capital. Please go ahead.

Good Afternoon thank you for the opportunity So, my first question is on incentives. So, in the last two quarters, at least the incentives receivable has been moving up. So, is there any specific plant on which you are accruing incentives and receipt is getting delayed?

Sure, and freight cost dropped quite sharply this quarter what is the reason for that? I am looking at a QoQ basis, is there any one-time railway freight incentive or anything that came through?

As Singhi ji explained in his remarks that we have reduced the lead distance to 277 kilometers compared to about 300 plus in the corresponding quarter last year . And there is no railway incentive impact, whereas it was there in the corresponding period last year.

I was looking at per ton i t has dropped 13% QoQ on a per ton basis. So, is the lead distance reduction that sharp in this quarter compared to Q1?

One more thing was that in the first quarter there was a busy season surcharge whereas in the Quarter 2, it was only for July so that is also one of the reasons. And as well there has been a reduction in the lead distance also.

Okay Sir, one last question on capacity utilization, your utilization seems to be at only 60% currently, it's like wh ile we are expanding capacity the ramp up seems to be a bit slower than what one would have expected to see. Why is it that the ramp up is taking so much longer?

Like we have explained, in the East, we are ramping up our volumes in time to come. From Q4 you would see better capacity utilization and better market share but otherwise there is no problem as such in terms of production, there is no problem in terms of now expanding in other regions.

Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.

Good afternoon, my first question is on your leverage expectations so if you are able to close the JPA deal in FY'24 versus Rs. 1,500 crores kind of net debt, do we expect our net debt to cross like Rs. 5,000 crores or what is that number which we are looking at in terms of net debt?

Yes, net debt will cross let's say the current limit which you are seeing at Rs. 1,500 crores, but of course we still expect net debt to EBITDA to be at least 1:1 in the current year.

1x?

Yes.

So, that would mean like the net debt to EBITDA, so net debt around maybe something in the range of Rs. 3,000 to Rs. 4,000 crores which the peak net debt which you are expecting?

Yes, please.

No component of freight subsidy is there.

Last clarification on Northeast like we will be increasing stake in Cal com with additional investment, how do we value such kind of investments like when we are taking stake from 75% to 95%? Also, is there an update on legal dispute with the promoters there?

See this is the rights issues, rights issue is given to all the shareholders in the same proportion. So, it is valued at par. So, there is no valuation required for this. And secondly, the arbitration, which was decided in our favor , finally, it was shut down by the High Court. So, other Group has gone to the Division Bench, and that is still pending. So, currently the High Court has decided in our favor.

Okay In regards to the investment structure, so rights issue so the other investor would not have thought of participating at all in this, that's why our stake goes up significantly?

Very few investors participated in the rights issue, it was a small participation. So, that's why our stake has gone up because many people did not participate.

Sure, Thank you.

We will take the next question from the line of Satyadeep Jain from Ambit Capital. Please go ahead.

Hi Thank you just couple of questions, f irst a clarification question, considering the volume growth that we have seen for Dalmia in this quarter is it fair to say that Dalmia did lose market share in some of the markets it operates in just clarification on that.

It may be in just two states of East where we might have lost but otherwise our market share has gone up in South and it has gone up in Northeast and the Central definitely, we have taken up 3 lakh tons share.

Secondly, on power and fuel cost there is obviously moderation in fuel costs this quarter. Where is the fuel cost inventory right now compared to spot? And is it possible to see more fuel costs moderation in the coming quarters? Dharmender Tuteja Yes, currently the rate is about 1.58 which has gone to the consumption this is the blended rate. And we expect some marginal reduction in the coming quarter sequentially also. But that would be around 3% or so.

Thank you. The next question is from the line of Jashandeep Singh from Nomura. Please go ahead.

Thank you for the opportunity, I just wanted to ask you that since now we will be adding another 2.9 million tons so what is the new CAPEX for our total organic expansion? And also, if you can provide, if there has been any update on the FY'24 and FY'25 CAPEX guidance? Dharmender Tuteja First part question, can you repeat?

So, what is the total CAPEX for our organic expansion now from 43.7 million ton to 49.5 million ton? Dharmender Tuteja I will come back to you, but on the second part of the question the current fiscal year guidance is about Rs. 6,500 crores total CAPEX including about Rs. 3.500 crores for Jaypee acquisition.

And on this second question, so, we have seen strong price hikes in the South and some reversal in East, so if you can give a sense on how the current prices are, that would be great?

So, one I would say that the East for us price have not slided down they are holding, and we are able to see about Rs. 40 to Rs. 50 price increase. And at the same time in the South yes price increase has happened because now demand is improving. So, we are quite hopeful that we will be able to get that benefit also.

And last question, if I may, there was a news article on a legal dispute in the Jaypee Bhilai plant that JV with SAIL. So, anything that will impact our takeover of that? Dharmender Tuteja That news item which came I think it pertains to an old development about two years back, because there is nothing new development all this was already known to us when we (entered into the agreement to) acquire. So, this withdrawal of the claim by SAIL from NCLT is one of the preconditions of the acquisition.

So, it won't impact our deal.

Thank you Sir

Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Thank you, I have three questions, so everything is interrelated. So, just trying to ask, so on the volume front for this year FY'24 previously we talked about our 15% to 17% kind of growth for this year. So, in the first half, we are already 9.6% and we are expecting that volume to improve in the second half. So, broadly what would be the, at consol level one can think of the volume growth? Second, considering as you mentioned the price hike in East Rs. 40 to Rs. 50 and in the South if you can specify would be great if our channel checks rates are Rs. 30 kind of price hike is already kind of getting implemented. So, just trying to connect if we can think of at least for us in the third quarter we should be seeing Rs. 15 to Rs. 20 kind of per bag so that is a Rs. 300 to Rs. 350 kind of realiz ation increase should be there. And considering the volume increase though the cost would be marginally declining is it fair to say that from Rs. 955 EBITDA per ton one can easily see a Rs. 1,200 to Rs. 1,300 kind of EBITDA per ton.

First I must complement your whole analysis exercise and you are generally right that yes prices have gone up in the South, and we are quite hopeful that it will continue . And based on this definitely there will be a positive impact on EBITDA on Q3 performance, but at the same time it wouldn't be right to predict any number.

But on the volume front broadly any broad range or where one can think of this FY'24 in terms of the growth for us?

I feel that we will be better than the industry.

Okay , got it the other thing is in terms of the CAPEX for FY'25 would be Rs. 3,000 crores to Rs. 3,500 crores? Dharmender Tuteja Close to be around that level the firm numbers we will be able to share maybe in the coming call.

And sir has mentioned 2.9 million tons will be starting in the second half . So, 0.9 million tons will be coming in the third quarter and r est Tamil Nadu and AP 2 million ton will come in t he fourth quarter?

You are very right.

And what would be the premium for this quarter and the consumption costs in terms of the fuel, broadly, it would be $135 odd for this, Kcal we have mentioned but in terms of absolute, is it a $135 odd?

So, the premium product sale is about 22% of trade sale

Okay sir and the fuel consumption cost for this quarter would be $135 odd?

$127

No, it wouldn't be like that.

Okay, Thank you sir

Thank you. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.

First question pertains to the fuel cost which you mentioned 1.58 is for the Q2 in kcal?

Yes, it is. This quarter, yes 1.58.

Yes, this was in the second quarter, right?

Yes.

And Q3 numbers are they similar to Q2 or there is some softening which is possible? Dharmender Tuteja Marginal softening, you can expect on the consumption side.

And coming to the demand, in the first half, we have grown by around 10% and if we exclude the Jaypee contribution, the volume growth would be close to a 7% to 8%. So, for the full year you are saying that you will look to grow higher than the industry and for sub-industry growth would be north of 10%. So, are you looking at a strong volume growth in the second half? And if that happens, how would the pricing scenario be there?

Now, you see, that overall demand of the cement is also going up in almost all regions and we are quite hopeful that in Q4 our growth would be quite better, and we will have also the extra capacity in the market also. So, we are quite hopeful that we should be able to do better.

And what was the incentive received in H1, Dharmender sir, mentioned? Dharmender Tuteja Total accrual was 141 and Received was Rs. 64 crores.

H1? Dharmender Tuteja Received is Rs. 64 crores in H1.

Because, Q1 you had mentioned around Rs. 39 crores received

25 was received in Q2.

Good Afternoon everyone and congratulations on good set of numbers, My First question from my end on the Eastern market again so, just wanted to get an update on the end market consumption since a peer of ours has been highlighting subdued demand from two major states mainly West Bengal and Jharkhand. So, is that also impacting our growth in the Eastern state?

To some extent, yes.

So, any kind of update or any kind of expectation when do you expect a good growth coming in from those markets?

We have observed that normally after the puja festival, etc., it should be brighter. We have seen it and our assumption is that the same will continue.

And secondly, in terms of regional expansion, while we are expanding materially in the Eastern and Southern region, no further expansion plans are yet planned in the West region, even after Murli having achieved a healthy utilization level for us. So, going on to our next expansion plan maybe, do we remain open for further expansion to the Western market or maybe via inorganic route in the Western market itself?

We already have said that we have ambition to be a pan India player. And we will look at all markets in terms of demand supply and in terms of market structure and based on that we will make our decision to expand in terms of where to expand , and when to expand. You will hear about this more in the coming quarters as we firm up our plans.

I was just asking really because we are not seeing material additions, maybe planned in the Western market. So, that can shape up well for our company as well, but got the point, got your point. Thank you sir

Thank you. The next question is from the line of Jyoti Gupta from Nirmal Bang. Please go ahead.

So, I had two questions. One was on market share and second on the Jaypee deal which you have already answered. But my question is can you give us numbers on region wise growth rates for Dalmia? I know we have lost market share in Bihar, what is the other state we have lost market share? Correct me if I am wrong. And YoY, we still growth YoY basis for the second quarter?

We do not share market share region wise and state wise.

Okay you don't share but what are the two states that we have lost market share?

Little bit in West Bengal and, North Bihar.

Continuing with my earlier question, given the capacity utilization is only 60%. And I believe there was an interim target of 75 million tons by FY'27 can we expect a rethink on that expansion plan now, given that the current capacity itself is taking time to ramp up?

We take these decisions based on our long-term conviction about growth in the Indian market. And I don't think a few quarters of lower utilization has changed our fundamental conviction about the Indian opportunity in this decade. So, I do not think that we are going to make long- term decisions based on a couple of quarters. So, no, this is not going to impact our thought process.

Thanks for clarifying that a nd also, any update on the East mining land, I believe you were adding onto the surface rights by acquiring more land over there.

Presently we have sufficient limestone deposit also the process which we started for acquiring additional surface rights, is going on.

Thank you.

Thank you. The next question is from the line of Saket Kapoor from Kapoor Company. Please go ahead.

Firstly, about this other income component , it's regarding the dividend received from your subsidiary. So, if you could explain the nature which subsidiary we have received this dividend? Dharmender Tuteja You are talking about the receipt of dividend in Dalmia Bharat Limited?

Yes, the other income component I needed the granular detail for the income component of Rs. 85 crores for the quarter.

This is at the consol level. So, consol level includes dividend from Dalmia Bharat Sugar, and also the treasury income o n our treasury investments and including whatever NCDs are recoverable from Hippo Store as well as Sarvapriya, so, the interest on that.

And the major component from Dalmia Sugar dividend income? Dharmender Tuteja That is a small component, that's very small component.

On the cost of material consumed Q-on-Q we have seen an increase. So, what explains this 3% increase on Q-on-Q and for the first half at 5%? Dharmender Tuteja There are two components , one is there have been higher rates of slag and fly ash but major increase is because of the increase of the blended percentage also.

And going ahead this is going to be consistent, how are the slag prices currently trending? Dharmender Tuteja So, they remain volatile but yes, we expect it to be around similar levels.

And we are exp anding majorly in the Southern part. But Southern markets have always been lackluster historically also. So, what gives us the confidence that here t he markets are going to improve substantially and thereby our expansion would com mensurate going ahead, capacity expansion?

I think most of our expansion is in Tamil Nadu, it's a deficit market in terms of demand supply. And I think we have a very strong presence in that market. So, I think we are very confident that this expansion is very healthy and going to give us good returns. There is some expansion in Karnataka, in Belgaum, which is also for North Karnataka and the Western Maharashtra market, I think, there is also a big opportunity as markets are growing and economies are growing. So, I think, the challenge in the Southern market is Telangana and North Andhra Pradesh and that's not a place where we are investing. So, we are investing in that part of the market, which has opportunity, and which intersects with our strengths.

Thank you. We will take the next question from the line of Raashi Chopra from Citigroup. Please go ahead.

Thank you, you had mentioned that you are focusing on a branding exercise. So, with that what kind of volumes are you targeting one for FY'24 and subsequently for FY'25?

I think we will share with you this guidance once we are ready, I think right now it suffices to say that we are looking at increasing our utilization and growing faster than the industry.

On the pricing aspect what is the quantum of the price , in the East you mentioned it’s 40 to 50. South is about 30 to 40. Is that correct?

In the South the trend is Rs. 30 at the moment.

And in your opinion in both the regions how sustainable are the increases given that they have come after a while?

Let us wait and watch only.

Also, what was the lead distance during this quarter?

277kms.

Thank you.

Could you give us a perspective of the trade demand and the non-trade demand, how the infra and real estate is panning out across those East and South? And also, how is your profitability between trade and non-trade moving?

I would say that our trade volume has grown and more profitable in the South we have been able to grow to 68%. And profitability definitely is always a bit lower in institutional sales, that's what I can explain to you.

How much lower would that be? What would be the current difference between trade and non - trade for you?

It varies from place to place, and those numbers cannot be shared please.

Thank you. We will take the next question from the line of Sanjay Nandi from VT Capital. Please go ahead.

Thank you for the opportunity Can you please put some colors on investments in this RHI Magnesita? What are we thinking as of now?

We have no investment in RHI Magnesita in Dalmia Bharat Limited.

But we are holding a significant stake in that company, right?

It's not a part of this company.

So, can you please throw any lights on our RHI business, what is the outlook and what we are thinking on that? Dharmender Tuteja We had divested the DBRL shares so currently our stake in RHI is zero. So, DBRL holds the economic stake in RHI.

Yes, from a company perspective asking you that what is the overall like view from th e top Management’s perspective? Dharmender Tuteja Let us not discuss in DBL Call.

Thank you. The next question is from the line of Amish Thakkar from Siguler Guff India Advisor Private Limited. Please go ahead.

Congratulations on great set of numbers Mr Dalmia, just want to understand Dalmia has always been a cost leader in all the micro market that we operate in and there are multiple factors that drive that. So, when you think about from your medium-term perspective, next two to three years to your long-term guidance that you have given up being 100% renewable, where you are 29% today. Similarly for lead distances and energy consumption per ton of cement and power cost, electricity cost per unit of electricity, any medium- and long-term target that you are working with, given that your blending ratios and rates need to be capped out.

So, I don't think we can share any target right now on thi s call, but all I can say is that our renewable mix will expand in the total mix. Secondly, I think we have won some coal mines in auctions, and I think our fuel cost as those mines come into production will become less volatile. Currently, we are very exp osed to imports and the Rupee /Dollar exchange rate. You know, as these mines come into production our coal prices will go down; will go down in the short term, given where we are today, but it will become less volatile, for sure. And I think, finally, we a re just looking at how to optimize our logistics cost and the segment mix. And over the long term, there are multiple levers on these costs which we will work upon. So, I think there is still juice left in becoming more efficient as we build scale. But I am unable to give any guidance on what those numbers could be on this call.

And can you explain the drivers behind the reduction in lead distance, is it the more digitizing the supply chain, any other initiatives that are driving this 10% red uction in lead distance this quarter and how sustainable this is?

I think some of the markets which are closer to our plants, our service levels are much higher . And our sharp focus on those markets has led to this reduction in lead distance. So, we are continuing to think about which markets are core to us in terms of where we have a competitive advantage in which micro markets. And I think in those markets, we w ill just plan to increase our share.

And lastly, on the share of DSP in your trade mix, where your realizations are significantly higher, and it's a 30% in South, 20% in East and 10% in Northeast so any guidance going forward in terms of share of premium Cement in your overall trade mix?

We don't give breakups of our premium product mix by region. But I think, again, as a part of our strategy we want to increase our premium product mix. And I think our branding exercise will be a step in this direction. But this is a long-term plan so this is not something which will give us results quarter after quarter. But over the next two to three years, I feel that it should help us in increasing our premium Cement mix, in a reasonably significant way.

And one final question from my side is green fuel price competitive with traditional fuels, or is this again a long-term investment that you are making?

It just helps us become more environmentally friendly, because it is, we are recycling waste from other industries. And second ly, it gives us a hedge against volatility in fuel price. So, I think from both the eco -friendly perspective and a cost perspective, it is beneficial. But, again, as I said that markets change from time to time and we want to create maximum flexibility in our process, that we can use the most cost efficient and the most eco-friendly fuel in times to come. So, we want our process to be so flexible that it can use all kinds of fuel and tha t gives us the best commercial negotiation power. And that gives us the maximum hedge against cost volatility.

Thank you and all the best for your tenure as MD and CEO

Thank you. The next question is from the line of R aghav Maheshwari from Asian Market Securities. Please go ahead.

What is our current product mix between the PPC , OPC, PSC and PCC at a company level because this time in the annual report you have not given this number?

I think we have already shared that our blended cement mix is 88%. And we have also said that over the next few years we want to move to an even higher percentage and hopefully 100% low carbon cement. So, I think that is the guidance that we can give as of now.

As far as a product mix it is you will not give for the future prospects between the products PPC and PCC and PSC at the blended level, so that's why?

So, Raghav, we have given this number previously on an annual basis you will get the number from us. But quarter-on-quarter, it's not possible to share it over the call.

This time the lead distance it's a 277 kilometer, it's something which we are doing for our market reorganization thing, or this is the sustainable number for the future also or this time, it is because of the low volume and the seasonality?

I think we will have to manage this dynamically. And when the volume growth is low, we try to optimize our costs and when volume growth is higher th an we may have to choose longer lead markets also. So, I don't think that this should be taken as a permanent structural reduction. But all I can say is that we will optimize our profitability and we will look at which are the core markets where we want to really compete . And at the same time, we want to look at volume growth as well. But if you want to look at our five-year average, the five year average lead distance is somewhere between 280 to 290 kilometers.

Last one question from my side, what's our thought process behind the remaining stake of the Dalmia Refactories and IEX, what's the timeframe we are looking to divest? Dharmender Tuteja See DBRL stake is already diveste d whatever proceeds will come, they will come as per the schedule, partly in December and partly September next year . And IEX also will get disposed off, it's already been considered as a non-core investment so that timelines we cannot share, but it should be soon.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Puneet Dalmia for closing comments. Over to you, sir.

Once again I thank all of you for joining this call and your interest in Dalmia Bharat Limited. I wish you and your famil ies a very Happy Dussehra and a Happy Diwali in advance. And look forward to continuing our interaction in the next year. And once again, thank you for your interest.

Thank you very much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Dalmia Bharat Limited that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.