Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press ‘*’ and ‘1’ on their touchtone telephone. If you wish to remove yourself from the question queue, you may press ‘*’ and ‘2’. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ritesh Sha h from Investec. Please go ahead.

Hi, sir. Thank you for the commentary and the opportunity to ask question. Sir, you did indicate several categories that we have excluded ; however, you did not indicate faucet wire fittings, is it a subset of sanitary fitting and?

Sanitary fittings, yes and we also look at furniture. We also looked at, did I miss anything? Yes, we looked at everything practically.

Sir, would it be possible for you to provide some assurance that we would not venture into any of these categories, say over next 5 years? The reason to ask this question is, I think the investors who are worried about capital allocation into something Ex cement that is why the specific question, sir?

Yes, we are not venturing into anything else.

Sir, over next 3 years, 5 years?

Next 5 years, next 3 years, next 5 years. But as I said, the products which we have dropped will not become attractive in future unless there is some act of God, which makes things very attractive, which is highly unlikely.

This is very helpful. Sir, quickly, second question, you indicated that ROCE of 20% and asset turn you indicated up around 5-7 x, what is the underlying assumption on the margins we are looking at? Again, the reason to ask this question is we will have some advantage on the working capital. So what is the underlying assumption on margin profile that we are looking at?

So EBITDA margin will be akin to the industry.

Fair enough. And lastly, next phase of expansion after Rs. 1,800 crores, what is our aspiration? Typically, we end up being 123. Otherwise, we don't enter any particular space. Again, there is a lot of CAPEX, which has already been announced by the incumbents, hence this question?

We don't have any plans for future CAPEX as of now. I think it is most important that first we put this up, ramp it up and it will go up to at least 30-31 where we ramp up to full capacity.

Sure.

So that takes care of your 5 years, that takes care of my initial CAPEX plan of Rs. 1,800 crores. Point is, we are not spending more than that as of now.

Perfect sir. Thank you so much. All the very best. Thank you.

Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.

Hi, sir. Thank you for hosting the call and thank you for the opportunity. J ust one question, at Rs. 1,800 crores, if I do.

Sorry to interrupt you, Mr. Agarwal, may we request you to speak a bit louder.

Yes. Thank you for the opportunity. So at Rs. 1,800 crores CAPEX, if I do a 5x asset turn, it is roughly about Rs. 9,000 odd crore of topline . As things stand today, if I were to take today's number, you will be the number 2 player and if I take , let us say, even 5 years out, you will probably not be in the top 3. So again, what would be our right to win in terms of the brand over here? I understand the distribution channel and all , there is a lot of similarity. So would we go more aggressive on pricing or would it be more like we will see a significant change in distribution, how is the approach on the marketing and sales side?

We are going to follow our distribution model, which is akin to the industry. Our rights to win as I already indicated in the document which we uploaded, a brand which is very well respected and recognized , ou r UBS network, which gives us a head start , our B2B relationships, very strong relationships with the builder community and we have access to the end users and the influencer’s community like nobody else. We are the only Company on cement, which is truly Pan India and with a connect of over 135,000 touchpoints, our technical services team, which is almost 2000 people plus, technical services team 2000 people plus who are there on the field who have the Intel on where, what project is going on? What is the requirement? I think it is the UltraTech advantage which will come to play.

Sure. My second question is, if I look at the industry, while it has grown at 13%-14% CAGR in the last 5-6 years in topline, part of it has also been helped by higher copper prices, depreciating rupee and all and CAPEX cycle has been l ike never before. Now with a deceleration in government spend on CAPEX, if I add up all the capacity announcement in the Cables and Wires segment, it is already about Rs. 10,000 crores, adding to it, your Rs. 1,800 scores of ballpark Rs. 12,000 crore. So on a Rs. 80,000 crore industry, we have roughly about Rs. 50,000 odd crore of incremental revenue potential. So do you see pricing pressure in the industry as a whole, not just because of UltraTech , but overall in the industry because of the capacity expansion by the incumbents as well?

I don't think so, because I believe the industry size would be close to Rs. 60,000-Rs. 70,000 crores. Sorry, it is close to a lakh crore of rupees and even if it is growing at 13% -14%, the incremental capacity expansion is justified. And we believe there is room for one additional player. That is all. So don't think it requires any price, there will be any pressure on prices. And with the growing market, we will also be able to find our place.

Thank you. That is all from my side.

Thank you.

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

Prateek, I didn't understand your question.

I am sorry to interrupt you, s ir. You are n ot audible, Prateek. It is breaking a lot. Sir , may be requested to please check your connection and rejoin the queue. Thank you. The next question is from the line of Ashish Jain from Macquarie, India. Please go ahead.

Hi, sir. Good evening. My first question is, in terms of adjacencies, is there something which we haven't evaluated in this round or with whatever you listed in terms of pipe , tiles, everything is done?

Ashish, I have not evaluated air. I can't supply air in the house. But the point is we have evaluated everything logical and possible. We are not looking at consumer durables, if you count that as an adjacency because it is something in the house that is way out. So wha tever goes into construction value chain is what I talked about, Ashish, we have looked at everything possible, everything logical. The room which I am sitting in there is a carpet on the floor which is part of flooring, but no, we are not getting there. There will be N number of things, but core construction value chain we have examined and kind of put to that.

Sir, if I can just harp on this a bit more like a lot of the cable and wire companies have ventured into, let us say lighting, switches, I know it is very farfetched?

I already mentioned it i n my commentary, we have also examined lights for houses, lights and fans what is it called FMEG, we are not getting there.

Got it. And this capital number of 1800 is at least in 2030-31, we are well?

Yes, shade under that. As of now, it is shade under that, given the design and all the plan of the facility.

Right. And sir, secondly, in terms of technology and all, how do we get it? Is there a cost attached to it? Are we talking to?

It is part of my CAPEX cost.

But you are talking to like some third party who will be hand holding us and is there a cost attached to it because that will a bearing on the margins and all?

So when we took advice on, Ashish, on the overall CAPEX cost and the sources of technology, I think that is how we got help and assistance in building the business model and the CAPEX plans.

So just to confirm it, tech related cost is a onetime cost you are saying if you are factoring it in your CAPEX.

What is tech related cost?

No, basically the technology related?

Yes, it will be onetime cost.

Onetime cost and in terms of the product mix, are we planning to be more wired versus?

There will be, I think, 60-40 wire cable.

60-40 wire cable. Fine. Thank you, sir. Thanks. Best of luck.

Thank you, Ashish.

Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.

Hi. Thanks for taking my question. So, j ust one question , I know this 18 billion CAPEX is a small number in an overall scheme of things, but any inclination how this will be divided over the next couple of years or most of it would come in the front loaded or towards the Fiscal ‘27?

My guess is more or less equal, but it will obviously like any other CAPEX money, it tapers down towards the end when 1800 and from cash flow point of view will be retention monies which will be held back , so don't have a very clear guidance on that, but it should be evenly spread out.

Great. And Atul, sir, this would be too premature to ask , but would you be building a team separately or it would be in-house putting?

No, there will be specialists and there will be generalists, so generalists can be from within our team. I will be a generalist. I am not letting my portfolio to be taken away by anybody else. But there will be specialists who manufacture, w ho know the tech part, the distributor or the sales guys will be separate because we cannot compromise on the sales time of our sales people for cement.

Got it. This is very helpful. Thank you so much and all the best.

Thank you. The next question is from the line of Amit M urarka from Axis Capital. Please go ahead.

Hi, good evening, Mr. Daga Atul. Beyond this Rs. 1,800 crores, will there be any working capital requirement or let us say some investment on brand building and marketing that will be required in the initial years?

So brand building will be part of my P&L, of course and working capital, I am working towards a very minimalistic working capital. Ambition is like UltraTech, like a cement business, we will want to be negative working capital.

So broadly, the two talking points we can think?

And the ambition, don't hold me to it, but that is what we are working towards.

Got it. So total capital employed itself will be, let us say Rs. 2,000 crores ballpark?

Not more than that. If there is initial year of , not more than that, because there will be some initial spending before revenue start kicking in, not more than that.

And the 60-40 split that you gave for wire cable, is it for CAPEX or revenue target?

Revenues.

And CAPEX split would be want then roughly?

Also, some of the facilities are common, so it is very difficult to break that out because what we understand is that the technology is common up to a particular extent and then it gets di vided between Cables and Wires, so not possible to segregate fully.

And just lastly on the cement capital employed of 1 lakh crore that you mentioned, so I believe it will be roughly Rs. 80,000 crores by FY27 once we are at 211 million tons, is that the way to look at it, beyond that, we?

Amit, we are already at Rs. 80,000 crores and if you saw the chart, I think we are spending next 2 years Rs. 20,000-Rs. 25,000 crores on cement.

Yes, will be announced. I gave you in my commentary I already gave you indication , we are already at 28% of India’ s capacity. India is growing. We will grow faster than the industry organically and inorganically.

Sure. Thanks a lot. That is all for me.

Thank you. The next question is from the line of Sanjeev Singh from Motilal Oswal. Please go ahead. Sanjay Singh, please go ahead with your question. Your line is unmuted.

Next question, please.

Next question is from the line of Pateek Kumar from Jefferies. Please go ahead.

He is not there.

Prateek Kumar, we will request you to go ahead with your question. As there is no response, we will move to the next question, which is from the line of Piyush Khandelwal from Motilal Oswal. Please go ahead.

Thanks for the opportunity. I just wanted to ask on this team building as well. Will there be a separate CEO for this division or you would be considering the same set of people be running the business?

There will be specialists, certainly, and I think beyond that, once the team is in place, we will let you know, but there will be specialists required for this business, like for our BPD, what we call Building Products Division, I have a separate CEO running that operation, maybe he will manage it if he has a bandwidth.

Got it. And when I look at your PPT, you mentioned that especially in the cable side, you are looking at LT cables, I just wanted to ask, would you be looking at some high tension, medium tension cables or EHV cables as well? Or is it just the wires and low-tension cables?

So currently, the plan is to only go after low tension c ables. We are not evaluating the HT and EVH at this stage.

The next question, please.

Hi, sir. T hank you for the opportunity. Sir, I just wanted to understand if you could give any color on how much, like how are you guys thinking between wire and cables and if there is any bifurcation in mind on how much the CAPEX could be between the two?

No, I think the question is asked Prateek, because there will be a lot of common facilities, so it will be very difficult to segregate.

But time to market first wires and then later cables is correct for this side?

Yes.

And sir, second thing, just wanted to understand this from my ambition perspective like how much is the ROCE that you would be looking at for this business stay somewhere in FY31-32?

25ish.

Thank you so much.

Thank you. The next question is from the line of Raghav Malik from Jefferis. Please go ahead.

Hi. Thank you for the opportunity. So just a few questions, t he first one was, is there any kind of feedback that you have got from your channel partners maybe at UBS as well, sort of about this if there has been some initial conversation around this segment coming in, that is a first question?

As far as my UBS partners are concerned, they are very excited because the kind of brand loyalty and brand traction that we have, they will definitely be excited to have a product from UltraTech on the shelf.

Got it. And those are actual source of indication you can give on the kind of marketing or promotional kind of spends that you would be doing for wires and cables or maybe even together like as a percentage or quantum?

Difficult to pin down a number, but obviously in the initial year, it might be high and then settle down in line with the industry. That is a new product launch we have to do to get it going.

And we are expecting like similar margins to other industry players even right of the back from 31 when you get full scale of revenue?

Got it. And sorry, just last one, like paint which was talked about in 2021. So is there some like sort of like now that this is out, is there some sort of timeline for this idea or you sort of conceptualized it to now you are going to execute the wires and cables division, if you could give any color on that?

You mean when did we start thinking about it?

Yes, something on that.

Let me give you a bigger picture. In a Company like ours, in a group like ours, there i s a think tank which keeps on evaluating ideas and if an idea is attractive, any Company would latch onto it and our think tank I believe has been working on this idea for some time before concluding it, finalizing it and bringing to the table, so not really a zero start date or end date.

Got it, sir. Thank you.

Thank you. The next question is from the line of Akshay Gattani from UBS. Please go ahead.

Hi, sir. Thank you for the opportunity. So in terms of channel mix for cable and wire business , which you will be doing, so wires, I believe it will be mostly distributor led, but in cables , you will be doing complete distributor lead or you will be also doing institutional business as well?

Mix because as I mentioned that is the advantage which UltraTech brings to the table whether our connect with infrastructure community or real estate community , we are directly in touch with them. And distributors also will be used , sales promoters will also be there as well as our direct connect with our customers.

Alright, thank you, sir . And other questions are like board approval has received a couple of days back only. So ground breaking is yet to happen, but in terms of plant and machinery and organizational structure , like plant and machinery vendors identified and in terms of organizational structure, like any progress you made or it will be subsequent development?

The team structure identified people are being taken on board, location identified as I mentioned, it is very close to copper facility, copper source, location identified, the plant layout, engineering started, design done. So we are good to go and deliver on or before December 26.

And plant and machinery is also identified?

Yes, sources identified but without board approval , I can't place the order . Now that the board has approved it, we will get into the next stage.

Thank you. The next question is from the line of Nehar Dave from IIFL Capital. Please go ahead.

Hi, sir, good evening. Sir, just one question sir, in terms of the paint business also, it is a similar sort of situation wherein the Birla House has gotten into a market that is sort of dominated by a few players. So what are some of the strategies that you would like to implement from that implementation into Cables and Wiress?

The industry is growing at a healthy 12%-13% has shown that growth and will continue to grow and whilst industry is growing 12%-13%, my team tells me organized market might be growing at a faster pace. Given that scenario, I guess we will settle in very well within the overall ecosystem.

And sir, any reason that this is not into Grasim’s books and in UltraTech books, is there a particular name?

As I explained, the construction value chain design, which is an architect work construct which is cement and then comes electrification. So, in a way, I would say, we build a wall and now we are wiring the wall or we are getting behind the wall. So that is the coexistence, design construct enabling as wiring and electrification, etc. Decoration is where paint comes in and that is why it was not as an immediate adjacency for us. This is an immediate adjacency for us, makes more sense because we have a business connect, we have a connect with the individual home, we have a connect with contractors who influence the electrician , w e have a connect with the EPC companies who do all the mega infra projects, whether it is an airport or anything else and that is why it makes more sense for us to do this project.

Got it. Thank you very much, sir.

Thank you. Ladies and gentlemen, that was the last question for today. On behalf of UltraTech Cement that concludes this conference. Thank you for joining us and you may now disconnect your lines.