Thank you very much. We will now begin with the question and answer session. Our first question comes from the line of Amit Murarka from Axis Capital.

Just on this expansion plan that you've announced. So, like after this, I just wanted to know like how much more scope is there given that this is just focused on North and West. And I'm guessing there is scope even in East, South, those markets as well. So , what is the additional scope for brownfield expansion that exists in the portfolio?

Amit, so we are now sticking our program to reach about 240 - 245 million tons, which will get completed by fiscal '29. There is definitely scope for 20 - 25 million tons more. I'm talking about beyond '29, '30, '31 and in those times, there will be further possibilities. There will be possibilities of greenfield clinker-based units also since we continuously keep acquiring mining rights, and land acquisition is an ongoing process. So , it's not only brownfield, but we'll also have greenfield expansions depending upon the market appetite, which we believe will be very high.

Understood. And also, while we spelled out the other expenses, reasons for the other expenses jump, even raw material has moved up, is there some one-off even in that?

There's no one-off. There might be some purchase price impact, other than there's no one-off.

And out of the INR200 per ton, which you summed up under various items, how much of it will go away essentially in Q3, if you could just give some number on that?

So, maintenance will come down. At least ballpark INR100 will come down.

Right, right. And just lastly, on the fuel cost, we have seen pet coke move up while you have only 44%, but will net fuel cost go up given that there is coal compensation cess positive benefit as well?

So, we'll have a bigger benefit because UltraTech consumes higher amount of coal as compared to rest of the industry, so that will also be a benefit to us. And now it is always possible that the flavor of pet coke starts going down and coal is becoming more important.

Sure. So on a net basis, basically, fuel cost may not go up too much for you?

So it will not go up. All the spot purchases is the only thing, which could move up or down. But in our overall scheme of things, we will not have any inflation in fuel costs.

Our next question comes from the line of Indrajit Agarwal from CLSA.

Two questions. First, congratulations on such low capex per ton on the next leg of expansion. Now keeping that in mind and the cost-saving initiatives across the industry, how do you see the pricing environment or the intensity of taking prices up in the medium term among the players panning out?

Thank you, Indrajit, for noticing that. Well, as far as the efficiency improvement program is concerned, I think UltraTech is the only company, which has demonstrated item-by-item actual delivery of efficiency improvement. Capex cost, I don't know whether anybody else can deliver this kind of an efficiency in capex cost. So, it remains to be seen. Third point you mentioned about pricing. Pricing is not determined by capex cost or efficiency improvement. Pricing, I will repeat again, it's always been demand. If demand is good, there is always an opportu nity for improvement in prices. If there are cost inflation pressures on , let's say, just now when we discussed about fuel costs, in case fuel costs go through the roof or any other costs go through the roof, if the industry, if we can't absorb it, it will get definitely passed on. Pricing decisions will not be taken because of lower capex cost.

Sure. This is helpful. Secondly, on industry demand, on your best estimate, how was the demand in second quarter? And do you think the earlier guidance of 6% to 7% industry growth for the full year is achievable?

I think so, yes, it is definitely happening. My confidence is going up higher if I look at my own volume growth. And as far as industry growth is concerned, it has to be somewhere around 4.5% to 5% for this quarter.

Our next question comes from the line of Pinakin Parekh from HSBC.

Sir, my first question is on the commissioning time line for the expansions. It says FY '28 onwards. So, will it get bunched up in FY '28, or will it be spread over '28, '29, '30?

Not bunched up. It would be mostly evenly spread out. We will come out with detailed schedule in the next quarter, but it's not getting bunched up.

Sure. And sir, secondly, just more granular color on how does the company see demand between government capex and individual homebuyers? Because from a pricing point of view, for the trade segment, we need the individual homebuyer segment demand to pick up. So as per you, where do you see stronger demand over the second half of the year?

I think the rural markets, as I talked about it, we have seen about 13% growth in rural markets, which is a very positive point. So IHB segment will continue to drive demand. And also, we are seeing continuous announcements of new Infra projects, which will help the overall demand sentiment. Jhanwar Ji, would like to add something.

Yes. So very good afternoon to all of you. So , I think, Atul has said rightly, the housing sector would be the key driver for the growth and particularly the rural housing, the demand has been good and with the good monsoon actually this year and the revision in the MSP price and kind of thing, I think the rural India is likely to do very well. On the urban side, obviously, with the change in the income tax rates, personal income tax rates, softening of interest, there are good green shoots and the urban demand is also likely to move further. Coming on the Infra side, I think, as Atul said, I think the Infra is now likely to fire on all fronts right from the road, rail, aviation and the port side actually because in the recent few months or the few days, there are a lot of announcements actually in terms of building new highways, widening of the highways and the metro, port. And now if the Sagarmala projects pick up, then further it will provide boost to the demand. And commercial side, I think, again, that's likely to be the good story with the GCC. Recently, a few days back, there is an announcement on the big data center, Google. So, I think we believe, hopefully, demand side do well.

So, Pinakin, it's not about a quarter. I think if you are looking at a longer term, and we had put out one chart on how we see the long -term growth also, it's 7%, 8% CAGR growth. I'm very confident that this is going to happen in the country. Just imagine, if you were to delve a little bit more in Google's investment of $15 billion over a period of 5 years. It's not just a data center, but there'll be employees and their housing and the related schools, hospitals, blah, blah, blah, everything will be coming up. So , this is one -off. Vadhavan Port, INR76,000 crores project, 300 million ton cargo handling capability. The project will go on for 5 - 6 years or even more. But that will change the fortunes of entire Western market.

Our next question comes from the line of Sumangal Nevatia from Kotak Securities.

Firstly, I appreciate all the detailing on the expansion plans and also a lot of more disclosures in the regular quarterly presentation. Sir, my first question is on the North market. You shared in the presentation that last couple of years, the peak utili zation has been approaching 90%. Any thoughts on how are we looking at over the next 4 to 5 years, given a lot of peers, JK, Dalmia, JSW, all focusing on North in the next leg of expansion. So any analysis, which you can share on our estimates, is there a risk of an oversupply situation gradually building in North given the supply?

No, Sumangal, no, I don't think so. And I think the more important from UltraTech's point of view is, we have always grown better than the rest of the industry at a pace higher than the industry. We are confident that our capacity share, which today stands at 28% will go up to 32%-33%, and there's no stopping us there. So UltraTech will continue to gain market share. UltraTech does not see any risk in being able to sell more volumes of cement.

Yes. To further add upon, I think, also it is an overall function if you talk about the capacity utilization where your plants are located actually. Once we'll share you the more details in the next quarterly discussions actually based on our footprint and the location, I think UltraTech would be stand out in terms of the...

Okay. So on the green power mix, we've reached 42%. One is over the next couple of years, where do we settle at? So just want to understand, incrementally, any thumb rule we can kind of use as to what cost is in every percentage increase or something like that to estimate the cost savings?

We will reach about 65% of green power by the end of our current phase of growth. And I've already started disclosing my cost mix. So , when you are reaching 65%, thermal power will come down. You can do an estimation from there.

Okay. And just one last thing. In the opening remarks, sir, you alluded to some sort of a premiumization benefit out of GST. Can you explain what's the thought there?

So what I believe is everybody has an aspiration, not only for cement, for any other asset. Now if that particular product comes within my striking distance, which I was deferring or not going that part. Now if that asset is within my striking distance, I would definitely want to use that asset. Now let's talk about cement. Cement, when a person is building his house, which is once in a lifetime, if that person was not able to buy UltraTech as a premium product, roughly INR30 impact has happened favorably in the hands of the end consumer. The affordability was INR360. There are 2 ways. The person who was wanting to buy at INR360 either will switch down to INR330 for a category B brand or might be incentivized to buy a premium brand at INR360. That's premiumization.

Our next question comes from the line of Prateek Kumar from Jefferies.

I have a couple of questions. Firstly, on premium cement, how do you think the premium segment pricing can pan out over the next 12 months versus the regular product for yourself or for market?

It again depends upon demand. Prateek, if demand is robust and there's a cost pressure also, then obviously, there's an opportunity to push it into prices.

And where do you envisage your 33% premium mix going to over the next 12 to 18 months?

I don't have a number immediately, Prateek, take it offline. I don't want to give an ad hoc answer. We can discuss on Monday. I'll share some more highlights.

Sure. You have reported like like-for-like growth of 7% for the overall consol operations. How is that split in region-wise? And also, your total 71% capacity utilization for first half, how would that be region-wise?

So if I look at regional capacity utilization, North and, in fact, South are in the 70s and West is in the high 60s and Central and East is low 60s.

Volume growth region-wise. I think the capacity utilization should be a good parameter for you. I don't have immediately the regional growth numbers.

Sure, no problem. One last question on your expansion into Northern markets. So , while some of the capacity appears to be in Central, you are allocating all those capacity to North, like we generally...

I was expecting somebody to ask this question. For us, we split UP and MP into UP East, UP West and MP East and MP West. The Western parts of MP and UP are more North -centric. Because let's take Vikram Cement, which is in Madhya Pradesh, but it is an hour away and you're into Rajasthan. So that is part of our Rajasthan or Northern markets as compared to calling it a Central market. Similarly, Dhar is very suitable for servicing Northern markets. Dadri, which is sitting in Delhi is in UP, but it serves Northern markets. So that is why we look at UP West and MP West in our internal scheme of things as Northern markets. So these, while even if you want to classify them as Central areas, but the output or their distribution is in the Northern markets.

Our next question comes from the line of Rashi from Citi.

Just a quick question on Kesoram. The EBITDA per ton that you've given is at INR755, and I understand the first quarter was about INR1,000. So , this entire decline, I mean, barring the realization has got to do with all these maintenance?

Yes, shutdowns, maintenance, that's it.

But was there any offsetting impact with the improvement in the rebranding to UltraTech?

Obviously, because I have at least INR15 to INR20 delta on pricing between UltraTech and Kesoram old brands. There is an advantage.

I'm just trying to understand how we think about Kesoram going forward from here.

So my sense is December, I should be back to INR1,000. And once we are completing our brand transition in Kesoram, it should be operating at -- because again, the Kesoram asset while it's in South, but services Mumbai market. The 9-million-ton plant, Sedam plant is closer to the Maharashtra market, so it should enjoy the profitability of the Western markets. Once WHRS and everything is implemented, we will be crossing INR1,000, INR1,100, INR1,200 mark by the end of June '26.

Got it. And just a bookkeeping question, sir, India EBITDA per ton, which was about INR1,230 in 1Q, is it working out about INR900 in this quarter on a blended basis?

INR966.

India, all in, as in including Kesoram and India Cements?

So INR966 includes India Cements.

Then I think you would look at INR914, if that is the number you are looking at.

Okay. Got it. And from like spot pricing versus what you had in the second quarter, is it largely stable?

Pricing in cement prices, coal prices?

Cement, cement prices.

I thought you're asking about cement bag prices. So no, prices are stable.

Okay. Do you see an improvement in the cost, the INR100 reversal that you're talking about, offset by higher pet coke prices going forward?

As I also mentioned, our fuel prices are not going up because we will also have the advantage of coal sales getting knocked off and the maximum benefit without a doubt will be to UltraTech.

Our next question comes from the line of Pathanjali Srinivasan from Sundaram Mutual Fund.

Congrats on a good set of numbers. Firstly, I'd like to thank you for giving such a good presentation with this like very good amount of transparency in reporting in terms of numbers with organic and inorganic. It really gives us a good amount of confidence in what you're doing. I have a few questions. First question is this pricing actions post GST, is there any kind of a window or time line for which we're not allowed to increase prices?

No, there is nothing like that, but prices will go up if there is pressure on cost, if there is a huge amount of demand or if there's a shortage of material, then prices go up. There's no prescription around that.

Okay, sir. And like just on a quarter-on-quarter, like we have seen a small fall in prices in terms of realization. What are the regions where you would say the impact of this is more?

So I would say quarter-on-quarter, Central was the most impacted.

Okay. And when we mentioned about margin profile, what is the margin profile difference be for regular cement versus premium, sir? Because you're saying that premiumization could be something that could play out. I just wanted to figure out what would be the difference?

But it is very difficult to do -- it becomes a theoretical calculation. So lot of overhead allocation will be done. If we were just doing the contribution analysis, that is different, but EBITDA analysis is very theoretical. So, we don't do that.

Strategic. Because when we had started off on that expansion plan, India Cements was not acquired, and we were doing, let's say, a bulk terminal in Chennai. Now we have the grinding unit in Chennai. So , on the contrary, we have decided to increase the capacity of Chennai grinding unit of India Cements and drop our investment in the bulk terminal in Chennai. Now because we are dropping the bulk terminal, the corresponding clinker, which was coming up in Tadipatri, which is Andhra Pradesh, which was going to serve this location, we have dropped the grinding capacity in Tadipatri unit. So what should I say, balancing, no other compulsions.

So in West Bengal, we have dropped a grinding unit I think to some 1 million tons. Any specific thing there?

Because, again, that was rebalancing. We dropped Kharagpur and we have increased our presence in Dankuni. So it's again, locational advantages that we had, net logistics advantage that we could get. That's how we have tried to optimize our capex.

Our next question comes from the line of Sanjeev Kumar Singh from Motilal Oswal Financial Services.

Our current CC ratio is around 1.48x. And when we gave the clinker capacity addition schedule, we said that it's based on 1.56x of CC ratio. So , should we assume that gradually we want to increase our clinker conversion ratio to around 1.55x, 1.56x over the next few years? And if we do that, what will be the cost advantages, which we would see?

So, as I mentioned, we will actually reach 1.59 to1.6 post this expansion, obviously, which means a higher amount of blending will take place. And the current expansion program itself, we had said we will reach 1.54. So obviously, we are focusing on increasing our blending, which helps our sustainability efforts also, and it is cost advantageous as well. Just a housekeeping question because of the previous question, which was raised, I think there's a small error in my presentation when we have talked about dropping off 3 assets, there were a couple of assets, which we rebalanced, for example, Dankuni, whi ch was not part of our plan. So instead of Kharagpur, we have gone into Dankuni.

Secondly, sir, when there has been a drop in or reduction in green energy sales, but we believe that at the same time, there has been some increase in overall GST on coal from 5% to 18%. So, considering that, what kind of cost benefit we would see if considering both these numbers?

GST increase in coal is input tax credit does not impact us. Like when GST on cement has gone down, it does not impact the profitability. Similarly, GST changes in coal does not impact the profitability; however, Cess, which was not allowed as an input, it 's a cost, that going down is directly advantageous.

Sir, my question pertains to this clinker expansion, which you are doing. Dala voi IU, you have mentioned, Tamil Nadu, there is a brownfield expansion of 0.4 million tons in the India Cements. Is there any clinker expansion also expected at that plant?

That's a grinding capacity. India Cements, no, there's no further clinker capacity. But clinker we have enough available in the region to service it.

Okay. And this 22 million tons, your capex cost is less than INR500 crores per ton. So in this, how much is the clinker capacity cumulatively that you're planning to add?

Total about 15.68 million tons. So, 8.04 are 2 specific plants and there are debottlenecking across the regions.

Okay. That is great. And sir, what would be the total capex number for next 2 years on the ongoing projects?

I will have about INR10,000 crores minimum per year, outgo.

Okay, INR10,000 crores. And lastly, you mentioned earlier in the call, due to higher maintenance and advertisement cost in Q2, on a per ton basis, how much of these costs will get reversed in Q3?

Give or take INR100 per ton.

Thank you. Ladies and gentlemen, we will take this as our last question for today. On behalf of UltraTech Cement Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you. Disclaimer - The transcript has been edited for language and grammar; it however may not be a verbatim representation of the call.