Birla Corporation Ltd (NSE: BIRLACORPN) Q3 2025 Earnings Call dated Feb. 05, 2025
Corporate Participants:
Sandip Ghose — Managing Director & Chief Executive Officer
Aditya Saraogi — Group Chief Financial Officer
Analysts:
Rajesh Kumar Ravi — Analyst
Shravan Shah — Analyst
Mangesh Bhadang — Analyst
Saket Kapoor — Analyst
Sanchita Sood — Analyst
Pathanjali Srinivasan — Analyst
Prateek Kumar — Analyst
Sanjay Nandi — Analyst
Girija Rai — Analyst
Uttam Kumar Srimal — Analyst
Harshal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Birla Corp Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Rajesh Kumar Ravi. Thank you, and over to you, sir.
Rajesh Kumar Ravi — Analyst
Thank you,. Good afternoon, everyone. On behalf of HDFC Securities, I welcome you all on the earnings con-call of Birla Corp or Birla Corporation to discuss Q3 and nine months FY ’25 financials ending December 2024. The management team is being represented by Mr Sandeep Ghosh, MD and CEO; and Mr Aditya, Group CFO.
I would now hand over the call to Sandeep for his opening remarks, which will be followed by Q&A. I would — I would also request participants to restrict their questions to two per participants initially, so that management is able to address queries from most of the participants. Thank you. Over to you, Sandeep, sir.
Sandip Ghose — Managing Director & Chief Executive Officer
Thank you. Very good afternoon, and welcome to this con-call. I have with me Mr Adity Sarogi, as mentioned, our CFO, but I also have our Chief Manufacturing and Projects Officer, Mr Rajat; our Chief Marketing Officer, Mr Kalidas Pramanik; and our CFO, Arun Agarwal. That’s the full team really to answer your question. The results are before you. I don’t think there are too many surprises or to really answer or talk about. So I will start first of all by giving a little setting the context on a couple of points, which may not be apparent from the published results. This is actually probably my eighth con-call or even for us because we never used to have con-calls earlier, eight con-calls in the last two years.
I did my first con-call here in January 2023. At that point in time, the burning question used to be. Everybody was concerned and really worried about Mukutban. We used to be grilled and quizzed about. And two years down the line, having made steady progress quarter from quarter, I don’t hear as many questions, but I am happy to report on my own that Mukutban today has become a really a growth engine for the company and lot of the performance which you are seeing today are contributions from. Not only has the unit become profitable, but the swing in profits, which was before over the years and that is what’s making the difference. F
Rom a situation when it was cash negative, it used to pull-down our overall profitability, Mukutban has today become, as I mentioned, an incremental and both in terms of our volume as well as our bottom-line. We are happy that we have, I think much ahead of the expectations of lot of people we are today doing high — in our capacity utilization of high-60s in Mukutban and we hope that this will improve further in the times to come. So as management, we are extremely pleased with the way Mukutban has been ramped-up. And as I said, proving the naysay is wrong or the apprehensions which people had expressed. This shows our ability to enter a new market. And this is something as far as Birla Corporation, I would like to underscore, if I may, taking a minute more.
When we acquired Reliance in 2016, there was a lot of apprehension expressed whether we will be able to upgrade our volumes from being — and essentially we were then our discount segment player in B or B-minus from there, whether we will be able to retain the premium positioning of our Reliance. There were a lot of doubts expressed by people. They thought that we’ll probably get even the Reliance portfolio pulled down. And the company had proven at that point in time our ability, our marketing ability to not only maintain the reliance premium actually to upgrade it so that today we have our portfolio where we are a significant player in our core market, not only a significant player, I would say a core market leaders in our core markets, our addressable markets are in the premium segment, our Perfect Plus has got accepted and has got our brand equity across all the markets where we operate over there.
And at the same time, we have consolidated our position in the popular segment. And most interestingly, we have also entered a segment between the two with another our premium brand, our Sunrad Advanced in those markets, we are operating over there at three levels. So the Reliance integration and the way we were able to seamlessly move into our co-branding operation, etc., which and many have not succeeded even a longer — after a longer period, I think is something this company has proven and demonstrated then. And equally, when we entered a totally new area, which was totally a new area where the company was unknown, our brands were unknown in an area which was dominated by very strong players. I think there were similar apprehensions expressed about Mukutban two years ago.
I think we have once again not only proved our ability to enter into the virgin territory or what is the virgin territory for us, but also position ourselves at a — in a very, very respectable situation. Even in Mukutban from day-one, we are selling upwards of 40% in terms of premium products, we are selling a very-high percentage of blended products, although large parts of Maharashtra is OPC dominated. In institutional nominated, we have been able to make our positions are fairly in a strong footing on the trade segment as well as a blended segment. So these are the two things I think is I would like to highlight and thereby what has — what has underscores what is the immediate importance is the contribution Mukutban is making to the overall performance of the company.
And why is that significant? Why is that significant in the context of this quarter’s results, it is because as all of you know, our core market in Central India has faced severe competition intensity over there for reasons which are well-known to you. There has been — that is one area where there has been to some extent oversupply or overcapacity. The prices have been under pressure for a variety of reasons. And in normal circumstances — in earlier circumstances, that would have affected us very adversely because that is where our core strengths lie. But because of today, where our portfolio has become so much more balanced, we have been able to offset that in a big way, both in volume terms as well as in terms of the profitability. And this is a point I would like to underscore.
But there is a flip side to this, which is not understood. Some people have raised the questions about our realization growth, why our realization growth is probably lower compared to some other people in terms of the top-line realization. The explanation for that also lies here because the Mukutban volumes which have come in, which I said, which is a very significant volume today, that comes in at a much lower net realization because that’s how those markets are operating. Compared to if you were to compare to people who are very strong in the North or even for the people who are strong in the central region. If we were to just have our weighted-average of our earlier product portfolio or our geographic mix of north and center, our net realization would have been much higher. The net realization today looks lower because of the impact of Virba and Maharashtra in the pricing. So this is another explanation I would like to elaboration I’d like to provide to you all those who are trying to decipher some of the figures.
Now coming to region-wise thing. As we all know, in the last quarter, things have looked up since end November and December over the industry, both in terms of volumes as well as in prices, but the biggest uptick or offswing was in the northern area. So people who are — who got a very strong presence in the North have done extremely well because they have got the full benefit of the volume uptake as well as the price improvements which have happened there, especially in the non-trade segment where the prices were very depressed earlier in the Northern region and that in-turn has pulled down the trade volumes.
In our case, although our presence is not as large or as strong as other people, but in terms of our portfolio, our unit as a single-location unit is today one of our biggest unit. In fact, it is the biggest unit for the company. And because of this situation, our Chandigaria unit has performed exceedingly well, exceedingly well, both in terms of volumes, the way we have been able to make capacity utilization, keep up our dispatches as well as because we are in the trade segment and the beneficial impact of the non-trade to the trade prices, we have also had benefited from the improvement in freight prices. So Chanderia has been a very happy story for us after a long gap. And today Chanderia has really performed I think to its potential and we hope that going-forward, it will further, you know, augment the company’s results and B, the dwell that it was in the company’s — the entire portfolio.
Coming back now to Center, which is our region, as I mentioned earlier, it is well-known that Center has faced a lot of competitive intensity due to some amount of capacity overhang over their lower capacity — bigger players with lower capacity utilization and therefore are being very aggressive on the pricing front. And there again, again what we saw in the central zone and the pricing the pressures were much more in the non-trade segment because with when trade demand was muted, our people focused a lot more on the non-trade sector. But even that there was a little bit of, I think, slowing down on traction over there. As a result, the big players were extremely aggressive on the non-trade thing and certain new players also who have a very — who add additional capacity and incentivized capacity in those areas, they could be very, very aggressive on the pricing in non-trade.
Non-trade is never our suit. That is not the area we operate. Neither do we want to operate in OPC segment. But obviously, there is a spillover effect which happens on the trade front if the non-trade market levels go down. But there — so there are two things which happened as far as our — we are concerned. In terms of positive, what was our strategy, our strategy was to focus much more because we have our capacity utilization even in a slightly soft market conditions are very-high in that region. So we focused on primarily not only on-trade, but we focus entirely on maintaining our price premium.
And we believe and this is for those of you conduct channel checks, we have been able to maintain a premium over many of our peers, including large competitors in terms in the A segment, we were able not only to maintain a premium, but we have been able to increase the proportion of our premium in that A-Category segment. So if you compare our presence in the premium segment is today probably the highest among our peer group. We have done about 59% — 58% on premium volumes in this quarter and that was very with not because we want to neglect the popular quarter, a popular segment where we are very — we have a strong presence with our heritage brands of Cheta. But here it was a conscious decision.
In that market, we wanted to maximize our premium sales and I think we have largely succeeded and that has really protected and insulated our margins over there. Simultaneously, though it’s a very small area, our Durgapur unit has performed well in the last year about towards the end-of-the quarter because that’s when the Eastern market prices also went up, there was an uptick in-demand. We saw better demand in Bihar, also improved. So all that helped us also in the East. So East was also a supportive story. And though not, as I said, we are not very large players there, but it was certainly not in any way a drag on the performance.
Our focus on costs or remain a relentless focus on cost. And subsequently, I will request Mr, our CMOP, to talk — comment a little bit more on the cost side. And so the cost elements we have continued to do. We have done quite a few initiatives and certain initiatives undertaken, you will start seeing the impact of that in the last quarter. And many of the cost initiatives, the results you’ll start seeing now. And now given the outlook of the market, which is before all of you and you know, luckily or unluckily, our results are coming towards the fag end-of-the sector, only two or three, I think other companies are left before announcing the results as we are coming.
I’m happy to say that we are not changing any of our guidance, which we have given earlier. And on that score, we have been, I think fairly consistent or we have never taken a over bullish position. Even in the previous quarters, we have tried to give a realistic assessment. And even now, therefore, we maintained our guidance which we have given previously, we are looking for the entire year volume growth of 7% to 8% in H2 and we are looking at it over there. And we are also keeping our projection of what we said about H2 EBITDA increase, which we had indicated between first-half to second-half H2 average would be about INR150 increase in EBITDA and we are maintaining that and no change in that, we will stay there.
So that kind of concludes my part of the presentation, no major changes in the debt situation. All those are remaining constant. So I will end over there. I will request Mr Saroghi, if he has to add anything, Mr. So we’ll take on the questions now and we will respond. Thank you very much.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their their touchstone phone. If you wish to remove yourself from the question queue, you may press star N2. All participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star N1 our first question comes from the line of Shrawan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Yeah. Thank you. And congratulations on a good set of volume growth for this quarter. First is the couple of data points if you can share lead distance, KCL, our capex in nine months, net-debt and incentive in the 3rd-quarter.
Aditya Saraogi
So distance is 3, 60 kilometres okay, and fuel cost is 1.50 per million calories carries and we received an incentive of about INR40 crores in Q3. Our net-debt as of the 3rd-quarter end is around INR3,000 crores. That’s all.
Shravan Shah
Yeah. And CapEx in nine months, sir.
Aditya Saraogi
Capex for the whole year, we are looking at a number of INR500 crores.
Shravan Shah
And for nine months, how much — how much we have done?
Aditya Saraogi
Nine months it is around INR300 crores.
Shravan Shah
Okay. Okay, got it. Sir, now the question is both on the volume growth and which is also related to the — in terms of the expansion. So broadly in nine months, we have done kind of a flattish volume growth. And if you are maintaining the guidance of 3% to 4% or 7% to 8% kind of a growth in the second-half, so we will be needing a kind of a 10% kind of a volume growth in the 4th-quarter. So are we confident to do that? And second is for FY ’23 and ’27, given the 1.4 million ton of the which will be coming in, if you can also clarify in terms of the timeline, previously you said by Q1. So for FY ’26 and ’27, unless we add more capacities, our growth — my calculation suggests would be a 5% odd 6% for average for ’27, which would be a lower than the industry if it grows at 7%, so if you can help us
Sandip Ghose
First of all, asking on your question in terms of our — we maintained that when we are saying the overall growth percentage of 7% to 8% we H2. We are making — we are maintaining that. That is not what we are changing and we are quite confident of doing so. As I said, we’re not changing any of our guidance. Yeah. Your question about the new line coming up in Q1, Q1 end, et-cetera, that we are also not changing at the point at this point in time. We are there. In terms of the volume growth next year, we are not commenting on the numbers, but what you are saying, we are alive to the situation. We know when we have got elbow room or headroom available and what are the other debottlenecking, et-cetera, which we are trying to — we would do. So we will address that question when it comes at the time of the next con-call.
Shravan Shah
Okay, okay. Because why I was saying because our — except the Mukunban, our entire rest of the plants are running at a kind of a full capacity utilization, 96%, 97-odd percent. So there is at such no headroom in terms of the growing. So that’s what I was trying to understand the next capacity. So our original plan was to reach a 25 million capacity by FY ’27. So are we sticking to it or is there a possibility that any capacity can come earlier so that we can have at least at par with the industry kind of a volume growth?
Sandip Ghose
We are not changing.
Aditya Saraogi
We are not changing any of our projections. Including the timelines with regards to the future expansion. The expansion.
Sandip Ghose
We will say whatever is required at an appropriate time, but as of now and this is for the benefit of all questioners, I wouldn’t repeat this again. There is no change in our guidance short-term, long-term anything as of now.
Shravan Shah
Okay. Okay. Thank you and all the best, sir. Yes, sir.
Sandip Ghose
Thank you very much.
Operator
Thank you. The next question comes from Mangesh from Centrum Broking. Please go-ahead.
Mangesh Bhadang
Hi, good afternoon, sir and thanks and thanks for those opening remarks, which have been very permitted. Sir, first question is on the demand growth. So you mentioned Central region demand growth has been pretty slow. So just wanted to understand how much this region would have grown in 3Q and what are your expectation for the next quarter and any impact either positive or negative of that you expect in this region.
Sandip Ghose
We think it’s a temporary phenomena, there will be pent-up demand, which will be made-up. There is obviously some amount of dislocation in our limited geography as well as movement of things but that is not going to overall change the entire situation very much for the quarter as a whole yeah.
Mangesh Bhadang
Any expectations or you have from this region in terms of whether it will come back to the normalcy in terms of demand growth because it has been weak in the first — in this year.
Sandip Ghose
But that’s true for the entire this thing as far as this is concerned, you see, unlike the North and the center what our differers North you may have, there is no capacity expansion, no capacity overhang. So things may be more what you should say firm in North in terms of whatever progress. In-center, we expect center to come back to normal, essentially because of two things. One is good monsoons and good harvest. So agricultural demand is coming back. We also see beginning in terms of government expenses at the state government level, which there was some amount of slowdown, which had happened earlier. I think the budget, which has just been announced would also instill confidence in things. So we expect tends to be a healthy return to healthy growth in the center, though it may not be, as I said as a firm as what you are seeing in the North.
Mangesh Bhadang
Understood. Sir, second question on pricing, you mentioned in the press release that prices have warmed up and that should drive profitability higher going-forward. So just wanted to understand, say, from your 3Q average, what is the current realization from the exit of 3Q with how much it is higher or from the average, how much it is higher right now?
Sandip Ghose
So we have indicated the overall per bag prices, I wouldn’t like to get on to a per ton realization, etc. And that is I think if there is by and large consensus among all of you is the kind of the way market has moved up and it will change from one, you know a mix will change from one company to another because of the regional balance, etc. So what you’ve got — what you have seen or heard so-far or overall, I think we don’t have any special insights to offer on that.
Mangesh Bhadang
Okay. So last question from me. So earlier we had this vision of reaching 25 million tons by ’27 and then next up to 30 million tonnes. So now we have reached a target of, say, INR3,000 crores of net-debt. When can we expect the next set of announcement, capex announcement from your side?
Sandip Ghose
What we mentioned just now, Mangesh, we are repeating that we are not changing anything as and when the things will come, we will announce. So we are pretty consistent in whatever we are saying.
Mangesh Bhadang
So nothing beyond Kundan Ninja as of knowledge.
Sandip Ghose
As of now, nothing.
Mangesh Bhadang
Okay.
Sandip Ghose
If you can go-around the question, our point is similar. Whatever we have stated, we are sticking.
Mangesh Bhadang
Thank you. Okay, sir. Sure, sir. That’s helpful. Thank you. Thank thank you.
Operator
Thank you. The next question comes from the line of Saket Kapoor from Kapoor; Company. Please go-ahead.
Saket Kapoor
Namaskar, sir, and thank you for this opportunity. Firstly,, you mentioned about the capex to be at INR500 crore and INR300 crore is what we have spent for the Nine-Month. Sir, our closing capital work-in progress was closer to INR580 crores. So how much have we capitalized for this quarter and the depreciation amount has been lower sequentially and also year-on-year, sir, how will you explain this, sir?
Sandip Ghose
Yes. I don’t have the number on the capitalization part. You can connect offline with us and depreciation. I don’t think there is any material change and I see no reason for any change also, because there’s not been any change in our accounting policy as such. So I see no reason why there could be any variance with regard to the depreciation as such.
Saket Kapoor
Okay. And, you mentioned about pressure on the non-trade segment size going smaller. And when we look at our mix, I think so the trade channel has been at some lower level of 70%. So if you could just explain what were you trying to allude by the lower size or the non-trade segment?
Sandip Ghose
I didn’t say lower size. I said the price pressures were much more on non-trade, which had a spillover effect on the trade segment because the two segments don’t exist in isolation. So in the last quarters, et-cetera, because the trade segment was slower, all the players focus much more on the non-trade and that too on the OPC. And therefore, the prices in the non-trade sector in most regions, including north and center was very highly affected. So that had a spillover effect on the trade. And we are essentially trade players. We are not — we are trade and we are a blended cement player. So we don’t operate in that segment. So because of the spillover, obviously trade prices were there, but our strategy is to remain primarily a trade player and that’s a blended cement player and that’s what we will do as the market grows. We are not changing our strategy there.
Saket Kapoor
The second question is, in your press release, you mentioned about healthy rural demand coupled with higher government spending, generated momentum in the cement demand, sir. So when you are mentioning about the non-trade segment pressure, I think sir, the non-trade is towards this institutional part that is being governed by the government depending only. So if you could just explain how the — yeah.
Sandip Ghose
That is Saket, when you talk of what you are talking about is a big infra spend. We are not talking of big interest spends. We are talking about rural infrastructure, money being released to contractors, etc for the rural, you’re talking about our spend and things like that, which boost rural demand. So I’m not talking about infra spend.
Saket Kapoor
So we are seeing this traction now from the government spending part. That is what we should take-in — factor-in for the quarter ahead.
Sandip Ghose
I don’t get you.
Saket Kapoor
As per our release, we should now factor the government spending part. That was the cause of concern earlier that the type of spending which was envisaged from the government and even when we look at the budget numbers and the more concentration for fiscal deficit, we have seen there is a lowering the government spending intention also. So that is getting corrected.
Sandip Ghose
I’m not talking about macro trends at all, Saket, to clarify, our talk is largely in terms of state and local government spend post various elections and everything else, government and you know budget certain funds got diverted into other developmental schemes due to which monies in many of these markets which get released to contractors, etc, there was a slowdown. We expect those monies to get released and we are seeing that happening and which is going to boost our overall of the traction in the rural. Rural demand comes from one is individual homebuilders, which is a function of, as we said, our crops, the harvest, monsoons, et-cetera, the overall income.
And then the other part comes through rural infrastructure and I think for which the state government spending and state government, a lot of the central government spending in many of the schemes are linked to the state government expenditures. State government doesn’t release the fund, the central government also don’t release the fund in some of the dose development efforts. So it’s a combination of that. I’m not making a comment about what was I talked about in the union budget. Those relate to mega infrastructure and we have a very small presence in that segment.
Saket Kapoor
Okay. Okay, sir. Thank you, sir., only the receivable part from the government in terms of
Operator
Mr Kapoor, may we request?
Saket Kapoor
Yeah, I’ll join the. No issue.
Operator
Thank you. A reminder to all the participants, please restrict your questions to each per participant. If you have any follow-up questions, please rejoin the queue. Next question comes from Sancheta Sudh from RoboCapital. Please go-ahead.
Sanchita Sood
Good afternoon, sir. I just wanted to ask if we can get any guidance on what our EBITDA per ton could be in FY ’26 and FY ’27? And if we can see EBITDA per ton hitting, say, INR1,000 per ton anytime soon, maybe in the next two, three years
Sandip Ghose
’26, ’27, we are not going to comment a that’s not too far into the future. We don’t want to speculate on that. We have told about this year and we, for the moment, we will restrict that. We are a conservative company, Sanchita, we don’t do too much of future or future reading.
Sanchita Sood
All right. Okay. That’s all from my end. Thank you.
Operator
Thank you. The next question comes from Srinivasan from Sundaram Mutual Fund. Please go-ahead.
Pathanjali Srinivasan
Hi, sir. Am I audible?
Sandip Ghose
Hello, audible, very audible. Thank you.
Pathanjali Srinivasan
So I wanted to check on the utilization. So I think in our press release, you’ve mentioned that our utilization is 91%, but I think it also mentioned in your opening remarks that the utilization at Mukutban was close to 70%. So can you help me understand this?
Sandip Ghose
If you look at the weighted-average bus, our existing plants operate at a certain level and Mukutban are there Mukutban is not even one-fourth of our capacity. So 99% is and over in other places, we are close to operating close to 100%. So that’s how the average works out.
Pathanjali Srinivasan
Okay. Okay. And a couple — one more question related to this incentives. Could you tell me like if you started receiving incentives from the Gupman plant?
Sandip Ghose
Yes plant that we have.
Aditya Saraogi
We have started accruing. We have not received that we have started accruing incentives.
Pathanjali Srinivasan
What would be the accrual, sir for the quarter
Aditya Saraogi
For this — for this year, as guided earlier, we are expecting total incentive accrual to be INR100 crores
Pathanjali Srinivasan
Only from, not at a company-level, sir.
Aditya Saraogi
Company-level.
Pathanjali Srinivasan
Okay.
Sandip Ghose
Right now.
Pathanjali Srinivasan
Okay, sir. And just one last question. This trade and non-trade volume, if I look at trade volume nine months here — year-on-year, it has declined. So is this like any specific reason that you could attribute towards this?
Sandip Ghose
No, this is a function of how the market moved in the last two quarters. As we are saying, everybody is saying there has been a shift in the last two quarters when the trade and demand, especially in the rural sector was muted. So by definition, some of it shifted towards non-trade. And besides, in our Mukutban area, Maharashtra, there is a — in some places, there is a higher component of OPC and non-trade and that is where it has shifted because that’s the construct of the Maharashtra market. So that has shifted, but we expect to the reverse correction to start happening now that our IHB segment and rural segment is picking-up.
Pathanjali Srinivasan
Sure. Thank you.
Sandip Ghose
But you would see compared — compared to everybody else, our trade volumes are much higher than many of our peers as well as some of the larger players.
Pathanjali Srinivasan
Yes, yes, sir, that would be good. Thank you okay. Thank you. Thank you.
Operator
Thank you. The next question comes from Prateek Kumar from Jefferies. Please go-ahead.
Prateek Kumar
Yeah, hi, good afternoon, sir. I have three questions. Firstly, on your incentives. You said INR40 crore incentive in 3rd-quarter, what is the Nine-Month incentive for the company and expectation for full-year?
Sandip Ghose
So here we already mentioned was INR100 crores is what
Aditya Saraogi
Nine months that accrual is around INR60 crores.
Prateek Kumar
Okay. So basically this quarter was like slightly higher than run-rate. We got incentive for the last
Sandip Ghose
Function of the volume as well as the price. So
Prateek Kumar
Right. Okay. Secondly, on — we have historically talked about a few new businesses like construction chemicals, also some time around RMC business. So have these businesses like sort of scaled to any meaningful level and how do you look at these businesses?
Sandip Ghose
So both these businesses are, I would say, on a fairly nascent stage. Construction Chemicals, it’s focused in the areas where we are strong. We are not scaling it up to areas where we don’t have a strong presence. It is linked to our Perfect Plus brand. It’s a brand extension. And on RFC also, we have been on an test marketing, you might say or initial, we are trying to learn. That’s an area where we want to learn the ropes of the business. We don’t want to — there are a lot of people who have gone into RMC in a very fast-track and then we believe that has not been profitable, that had been a cash trade. We don’t want to do that. We are moving slow or slowly and we’ll step-by-step and we’ll let you know as soon as the next phase of expansion whenever we do that.
Prateek Kumar
And last question is on profitability. So first-half versus so Q3 versus first-half seems higher by around INR30 INR40 rupees. We are looking at INR150 improvement for second-half. So we are looking at like INR200 to INR50 improvement in 4Q, right, on a quarter-to-quarter basis?
Sandip Ghose
Yeah, if that’s the arithmetic, that’s what we stick by as we said.
Prateek Kumar
Right, sir. Thank you, sir. These are my questions. All the best. Thank you.
Operator
Thank you. The next question comes from the line of Sanjay Nandhi from VT Capital. Please go-ahead.
Sanjay Nandi
Hello. Hello.
Sandip Ghose
Yes, please go-ahead, please.
Sanjay Nandi
Can you hear me, sir?
Sandip Ghose
Yeah, we can hear you very well.
Sanjay Nandi
Sir, can you please share with the clinker utilization levels for this quarter?
Sandip Ghose
Clinical utilization, what do you mean by that
Sanjay Nandi
What has been the utilization level for clinker capacity as we have?
Sandip Ghose
100%.
Sanjay Nandi
100%, 100%. Okay, sir. That’s my voice sir. Wish you all the best.
Operator
Thank you. The next question comes from the line of Giri Jare from YES Securities. Please go-ahead,
Girija Rai
Am I audible?
Sandip Ghose
Yes, please go-ahead. Go-ahead.
Girija Rai
Thanks for taking my questions. Yeah. So I have a couple of questions. Firstly related to freight costs. So I can see there is a spike in freight costs on per ton basis. Is this because of like we are transporting volume from Mukutban plant to Gujarat or is it becoming so-far for Maharashtra?.
Sandip Ghose
Mukutban obviously has contributed a little bit because the Mukutban, our footprint, since our plant is in, the further we go, it increases a little bit. We don’t have a grinding unit there. But it’s a — and overall, we have had to reconfigure some of the GMX distribution given the market conditions and but it has not increased or in other places. So it’s roughly you don’t see any significant increase in our thing. It’s only very marginal change.
Girija Rai
Yeah, so is this also possible that we sell the volume to Telangana market as well from plant?
Sandip Ghose
Telangana is very close. Telangana is right next door. Telangana is an opportunistic sale depending on the pricing there.
Girija Rai
So basically our primary market would be Telangana for plant, right?
Sandip Ghose
Or it’s not primary. It’s a — it’s, as I said, a very marginal market. It’s a spillover. Telangan is an opportunity sale of when the prices, etc., is good. Our primary market for Mukutban is, Kandesh and then going further if you want to go towards Nashik and Mumbai. Telangana is not something we focus on.
Girija Rai
Okay. And one more thing, like if I see year-on-year basis like from various data, there is a spike of petcoke and imported coal price. So how do you see this petcoke price and coal price — imported coal price going to shape out going-forward?
Aditya Saraogi
The pet coke price has come down to mid-’19 levels and currently they have again gone back to around 110 levels and we expect these to range between $100 to $110 pet coal prices. As far as domestic coal prices are concerned, they are quite warm.
Girija Rai
Okay. Okay. Fine. Thank you, sir. Thank you very much.
Sandip Ghose
Thank you very much.
Operator
Thank you. The next question comes from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go-ahead.
Uttam Kumar Srimal
Yeah, thanks for the opportunity, sir, and congratulations on good volume growth. Sir, my question pertains to your capex. You mentioned about FY ’25 — FY ’25 capex. So what would be our FY ’26 capex?
Sandip Ghose
We can’t comment on that we can take that question in the next quarter.
Uttam Kumar Srimal
Okay. And sir, now coming to your business, though it’s very 4% of our entire revenue, but this quarter we have seen some substantial growth on Y-on quarter-on-quarter basis in revenue. So how do you see this good business panning out in 4th-quarter and in next year?
Sandip Ghose
Right now, we are not — we will go along, but we are not seeing any significant changes. It will be in relation to what’s happening in the market, there is a greater demand for agri bags, etc. We are not seeing too much of a change there. But when we have something more to say on dute. We may have some things to talk about in future. We will let we talk about it in greater depth. At the moment, there’s no material changes we are reporting.
Uttam Kumar Srimal
Okay, sir. That’s all from my side. Thanks a lot.
Operator
Thank you. The next follow-up question comes from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi, thank you, sir. Sir, the question is pertaining to our coal mine. So if you can help us, so currently in terms of the fuel mix, how much that we are using our captive coal and the coal, which is likely to be operational by Q1 FY ’26. So how it will — in terms of the fuel mix, how it will increase because that the cost previously you mentioned is 30% 40% kind of a lower versus current KKL cost
Aditya Saraogi
Yeah, so our own was duration of 15% in this fall. And once comes on, once that achieve the optimum level of production, which will go up to around 30 — between 30% 32% of our total pool is 10%.
Shravan Shah
So will that be by end of FY ’26, we will be able to reach that level or it will take even one more year?
Aditya Saraogi
I think next year it will not reach optimum level, optimum level will be reached in the next financial year, that is 26 share.
Shravan Shah
Okay, okay, got it. And this green share which we currently have 26% odd level. So how we see it structurally for next one or two year where we want to reach this level.
Aditya Saraogi
Which one versus?
Sandip Ghose
Green power green power?
Shravan Shah
Green power, sir.
Sandip Ghose
Yeah. Yeah, we are working on the project. Some projects we have already started working on both in terms of hybrid solar. So our aim is to reach to the level of 35%, but it will take — as you rightly said, it will take another one or two, one-and-half years.
Shravan Shah
Okay. Okay. Okay. Got it, sir. Thank you and all the best.
Sandip Ghose
Thank you very much.
Operator
Thank you. The next follow-up question comes from the line of Saket Kapoor from Kapoor Company. Please go-ahead.
Sandip Ghose
Saket, your questions are disproportionate to the distance from our office. Okay you are the closest to us and maximum question. I think you should come and have a cup of tea with Mister rather than asking on a con-call.
Saket Kapoor
Okay, okay, sir, as you
Sandip Ghose
You can ask him, go-ahead and ask.
Aditya Saraogi
Please go-ahead.
Saket Kapoor
Yes, sir. So, Sir Ravi, sir, the question is for you only. Sir, what is — you have mentioned about we have accrued INR100 crore incentive on account of the total government incentive. What is the closing balance as on 30th December? And in actual, how much we have received out-of-the pending balances?
Aditya Saraogi
No, we have not accrued INR100 crores. We have accrued around INR60 crores.
Sandip Ghose
We do expect to INR100 crores by the end of
Aditya Saraogi
— by the end of this year and our closing balance is about INR435 crores. As of December ’24, this is excluding the West incentives where which is under.
Saket Kapoor
What is that amount?
Aditya Saraogi
That is about INR118 crores.
Saket Kapoor
Okay, so INR435 minus — sir, in nutshell, how much have we received in received cash-in terms of this subsidy balances.
Aditya Saraogi
This financial year
Saket Kapoor
— this financial year.
Aditya Saraogi
INR187 crores that in this financial year.
Saket Kapoor
INR187 crore of cash we have received. Yeah. Whenever, sir. Thank you.
Operator
Thank you. The next question comes from Rajesh Kumar Ravi. Please go-ahead.
Rajesh Kumar Ravi
Hi, sir. Good afternoon. My question pertains to first on the — this capex, which number which we are earlier looking to INR800 crores, which was further slowed down to INR700 crore, now we are looking at INR500 crores. So why this slowdown on the capex number, where are we — what is exactly leading to this deferment?
Aditya Saraogi
We try to optimize our cash over — so while we plan, we plan on a basis, but then we try to optimize — bulf of it is on account of maintenance capex, sustenance capex, right. So we try to optimize whatever is possible to defer — we defer that. That is an ongoing exercise.
Rajesh Kumar Ravi
Okay. And this Bihar expansion was also announced long back and last update was the process of — there’s a company is in the process of acquiring land. And is there anything which is materially progressed over there? Next one, two years, we would see this project coming to life.
Aditya Saraogi
That will be part of the 5 million ton expansion and deciding to complete by 2027 and we have acquired most of the land on the location.
Rajesh Kumar Ravi
Okay. And lastly on the coal blocks, you mentioned it will be 30% plus when this Bikram mines become fully optimized, total of your requirement 30% will come from your captive mines. There is a murky worker which will come up in FY ’27. How will that change the captive requirement, sir?
Aditya Saraogi
It might be that once that comes, it will be around 55% between 55% and 60% of our total if I,
Rajesh Kumar Ravi
Total at company-level.
Aditya Saraogi
Yeah, yeah.
Rajesh Kumar Ravi
Okay. Great, great. That’s all from my end sir. I’ll come back-in queue. Thank you.
Sandip Ghose
Thank you.
Operator
Thank you. The next question comes from the line of Harshal from AMSEC. Please go-ahead.
Harshal
Thanks, sir for the opportunity. Sir, what would be the gap in terms of profitability between Mukutman and company average?
Aditya Saraogi
And I’m sorry we don’t share unit-wise or wise profitabilit
Harshal
Y. Okay, sir, thanks.
Operator
Thank you. Ladies and gentlemen, we will take that as a last question for today. I now hand the conference over to the management for closing comments.
Sandip Ghose
Thank you. Thank you very much for participating. This has been very heartening the level of participation in number of people who participated. And above all for the confidence you have in the management and the performance and the support we’ve been receiving from all of you. Thank you once again and see you soon. Bye.
Operator
Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.