Birla Corporation Ltd (BIRLACORPN) Q4 FY23 Earnings Concall Transcript

Birla Corporation Ltd (NSE:BIRLACORPN) Q4 FY23 Earnings Concall dated May. 10, 2023.

Corporate Participants:

Sandeep Ghose — MD and Chief Executive Officer

Aditya Saraogi — Chief Financial Officer

Analysts:

Rajesh Ravi — HDFC Securities

Shravan Shah — Dolat Capital — Analyst

Rahul Jain — Credence Wealth — Analyst

Amit Murarka — Axis Capital — Analyst

Kamlesh Bagmar — Lotus Asset Managers — Analyst

Saket Kapoor — Kapoor Company. — Analyst

Mangesh Bhadang — Centrum Broking — Analyst

Prateek Kumar — Jefferies — Analyst

Navin Sahadeo — ICICI Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Birla Corp. Q4 and Full Year FY 2023 Earnings Conference Call hosted by HDFC Securities. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Rajesh Ravi from HDFC Securities. Thank you, and over to you, sir.

Rajesh Ravi — HDFC Securities

Hi. Thank you, Devin. Good afternoon, everyone. On behalf of SBFC Securities, we welcome you all to this Q4 and full year FY 2023 earnings call of Birla Corporation hosted by us.

From the management team, we have Mr. Sandeep Ghose, MD and CEO; and Mr. Aditya Saraogi, CFO, to discuss the same. Thank you to the management for their time.

And I now hand over the call to the management team for their opening remarks, which will be followed up by a Q&A session. Thank you, and over to you, sir.

Sandeep Ghose — MD and Chief Executive Officer

Thank you very much, Rajesh. This is Sandeep Ghose and I have with me Mr. Adit Saraogi, our CFO. First of all, thank you so much for joining the call. I find a very large number of participants, which kind of warms our heart and for you taking so much interest and taking the time out to be with us and we are also, for us, this is a maiden conference. So, we are also very excited to be able to communicate with you, engage with you.

Since this is our first call, probably I’ll devote a couple of minutes to introduce the group to you because sometimes there is a bit of — although all of you are from the investor community, you have a better idea, but still sometimes they find — the construct of our group, the major group is slightly hazy in external world.

We are part of the M P Birla Group. M P Birla Group was set up by Mr. Madhav Prasad Birla, who actually is not really known. He was the man who had helped Mr. J.D. Birla set up many of his thriving industries from Hindalco to Saurashtra Chemical and many others. He was the man who has assisted Mr. J. D. Birla, who’s an uncle to do that.

But this particular company, Birla Corporation, our history goes back more than 100 years. We are the first Indian jute mill which still operates and is one of the largest player in the jute sector. But Mr. M P Birla diversified the jute business into a multiproduct company.

After he passed away, his wife, his partner, Ms. Priyamvada took reins of the company. And the progress apart from on the industrial front, where we have other group companies in the cables field, we have it in guar gum and others, but we have a substantial presence in the social sector.

Not many people know Bombay Hospital is something we are associated with. The Belle Vue Clinic in Calcutta, which is one of the very well-known private nursing homes are, again, part of our group.

Similarly, we have the South Point School which is one part of the largest school in Asia, Guinness Book of Record in terms of number of students at a single campus. And it’s one of the leading schools, that’s part of the group we run educational institutions at other places. The iconic Birla Planetarium of Kolkata again, M. P. Birla Planetarium is part of a larger family. We have two major hospitals other than this, one in Chittoor, which is a newer hospital, which came up plus in Satna, which is one of the first hospital, multispecialty hospital, which is there. So we have a fairly large presence also in the social sector. And that’s why we say, our group’s value is heart and strength. Strength would define our emphasis on technology, in excellence. And whereas the heart is the way we go about it, the larger good rather than pure business needs. And that’s how this whole new — I was in the company at that point in time.

Some of you know I was with Birla Corporation earlier then I took a sabbatical for three years and now come back as the MD, CEO. At that point in time, this heart and strength moto was developed. And we remain very close to it because that is, I think, the real thoughts which our promoters live by.

Along with Ms. Premalatha Birla, Mr. Rajendra S. Lodha, Rajendra Singh Lodha, he was also part of the evolution of the group. Mr. Lodha, again, is not known. He was not just associated with MP Birla Group, but he was associated with a larger Birla at that point in time on divided Birla Empire. He was one of the very close associates there. And he had a very long — what I might say an emotional connect with entire family and the group. So he, therefore, too keen interest in the evolution of Birla Corporation, under when it was under the stewardship of Mrs.Birla and he led it to afterwards till his untimely demise, when Mr. Harsh Lodha, he’s the youngest son, who is a billing chartered accountant, and he took over charge of the company. And since then, he has been leading it and a lot of you who have been following the history of this group have seen that how the group has been transformed under Mr. Lodha’s leadership.

The other very interesting thing about our group, if you see our Board of Directors, composition of Board of Directors, we have, in fact, a majority of independent directors on the Board. And each of these people are people of great standing and who are highly respected.

So to take a few names, we have Mr. DN. Ghosh, who was a former Chairman of SBI, a long banking experience, part of many company boards, Philips, Peerless and many others. And he is there. Then we have Dr. Deepak Nair, a very well-known renowned economist, former Vice Chancellor of Delhi University, Jawaharlal Nehru University and also at one point of time, the Chief Economic Adviser, during the period when the Indian economy went through the first round of liberalization.

We have Mr. Anand Bodia, absolutely a very renowned person again bureaucrat, who is from the IRS service, who was known, and who’s also been involved in many industries, we have Mr. Shailaja Chandra, who was the Health Secretary of Government of India in very critical times like when there was Surat Plague and then she was the Chief Secretary of the Delhi government under Mrs., Sheela Dixit, so we have a profile of people like them. We have Mr. Vikram Swarup, who is Head of the Paharpur Group of companies. So in fact, our Board of Directors have got more non-executive independent directors than having either members of the promoter family or any related individuals.

So we are not only professionally managed. I think we have a very strong dominant system, because all these people are of such impeccable credentials. They are very demanding as directors in terms of both performance as well as — and compliances, governance, etc., but they are — they also bring a huge experienced bank to the table, which I personally can vouch for as in my previous stint as well as in the short stint after returning and taking charge of the MD and CEO, I have found extremely helpful and reassuring.

So that’s in a broad sense, the background to the group, now coming specifically to Birla Corporation as it stands now. I mentioned to you, we have a huge business, but that’s not a real focus of our discussion or interest, I would think. Today, we are a 20 million ton company. Our capacity has actually doubled in the last six years, which many of you know has happened, primary trigger was the acquisition of the Reliance business, Reliance Cement business, which we acquired initially with the Maihar Cement plant, which is the integrated unit and the Kundanganj grinding unit. And what was significant was — it’s perhaps not known, we didn’t get a business on the platter.

When we took over the business, the capacity utilization of those plants was very low. We were able to ramp it up not only to the maximum capacity, both Kundanganj, which had a lot of incentives part of being under the UP government, but also Maihar, which again was an incentivized unit and modern plant, but we were able to take its capacity utilization very quickly which — to the almost maximum maxed it out, would something which Reliance had not been able to do earlier.

But what was, I think, more creditable or perhaps, a lot of people didn’t think Birla Corporation, which was then a smaller company usually dealing in the lower end of the market, the price points would be able to handle the brand. Are you taking over a new brand and positioning it at the premium end. We didn’t have the luxury at that point in time, unlike some other companies, which went through a taking over process. They had a two your kind of a period when they could use the brand of the oil company which they’ve acquired.

In case of Reliance, we had just about three months window when we had to just change it to a Birla Corporation brand, and that was born Perfect Plus, which is the brand and very few people at that moment and thought that we will be able to penetrate and position it at a higher end and not just in terms of the consumer or the final product, but they didn’t think that we would be able to attract the distribution system, we’ll be able to retain the sales force there, who are used to working in a different environment, a different operating when we merged. I think that was the biggest success story over there.

And therefore, today, when I look at it, I don’t look at the success of the Reliance merger in terms of just acquiring physical assets of production. The real value of acquisition, which has been unlocked is by the assets which we created both in terms of the brand and the distribution or go-to-market route to market, which you would say. But simultaneously, what we were able to do which I personally take a great deal of satisfaction, if not pride, is the integration of the distribution system and also the integration of the manufacturing unit.

Today, many companies, big companies are trying to do so-called cross-branding and other things trying to produce from other people. But we did it way back in 2016, 2017, when there seamless in amalgamation of making products both of the Reliance brand as well as the old legacy or heritage brands, they call them or Birla Operation being produced equally from any of the plants. And that was achieved by — it’s not easily appreciated by the kind of quality parameters we’ve established the end consumer I come from a FMCG background. Most of my life is spent with soap manufacturing and So sofe and ite manufacturing company in the levers. — where we buy so for a toothpaste, you never look at where it has been made. Unlike in the cement business that people keep asking whether this is — which plant it has come from. Even for the bigger plant, I remember will ask this has come from Jambusar, from Chaibasa or from some other place.

And that used to be even in the case of ours. But today, look at it, we supply products in the UP market from six different plants and nobody ever needs to know a cares to know where it is coming from. We supply the UP market from Kundanganj, from Raebareli, from Satna, from Manihar. And on the other side, we bring it from Chanderia as well.

So we are supplying them from all the — all sites to all — and not just in restricted areas. There is clear swapping from one area to the other, but nobody really bothers today. And that is where today, when you go into the market out there, nobody will tell you that we are a reliance distributor, we are — earlier they would call them Satna and distributed. Today, everybody is an MP Birla Distributor.

Earlier people didn’t think that some of the top end so-called A category companies, dealers will come to us. Today, we have people very happy to join us, a lot of people keep I mean knocking at our doors. And I think the ultimate test to the pudding is the people. I recall, even when I joined this company in 2015, 2016, a lot of people raise their eyebrows. But today, constantly, we have people from the top companies. I don’t want to take names, who are willing to come and join our group.

So that shows the brand equity, the change which has happened. And why I’m emphasizing on this, not to beat our drum — but because I think when investors talk about it, generally, we all talk about how many million tonne capacity, what is the value of plants and the assets on the balance sheet but we don’t tend to look at the valuation of the brands as well as the valuation, what I call the commercial assets, commercial assets, I would term as your distribution network, logistics network and most importantly, the people, because without a sales force, without a sales force, who is able to position them so a lot of people try to position themselves just by launching a new brand at a premium end.

And between people who are successful and not depend on their ability to penetrate that. I think that’s where the strength comes. And why I’m, again, is relevant is this from here arises my confidence of what we are trying to go and do in Mukutban, which I think is a great deal of interest for a lot of you being a newcomer in total new geography, how are we going to penetrate that market.

So that’s kind of giving you a backdrop and having come back again after a hiatus or sabbatical, I’m sometimes a bit immune to see from that one, when I used to be here earlier four years ago, when we used to setout our quarterly press release in Bulletin, I started writing at that point in time, how much is the premium percentage in our portfolio.

Today, I find that not only everybody is, I think, the before yesterday or today back, I found the money control article. I see in that how Cement players are today trying to premiumizing their portfolio. So to some extent, we have been, I think, a little ahead of the curve in this matter because we — today, our premium portfolio already, we are selling — we have at least 54% in what we call the people may quibble as to what we call premium and what is the premium of other companies.

If you look at the so-called earlier biggest, but that’s not the point, what was my — what I would look at my premium, what was my model price or the base price at which I was selling the Cement earlier? And what is the premium which I’m commanding, over that. And that is where the — I think the point comes in.

Now when you look at Blended Cement, we’ll come back to these points, we were at an 85% much, much earlier when we had moved away practically from OPC, except in very small markets, very small and non-trade as well. We had focused totally on trade sales, and that is on mix, which still remains.

We’ll come back to it how it has helped us even in the last quarter, despite prices remaining flat in the market. How we have been able to protect our realizations and in fact, improve the realization, despite a slight weakening in our key geographies, which is Central India, we have been able to do.

I think these strategies have paid off. And these are the strategies which we are trying to replicate in Mukutban and we are already seeing results of that. One of that we had touched upon much to the surprise of our own — a lot of our people inside and outside, we hit EBITDA positive in Mukutban by March end — in March and last fiscal.

And that, I think, was ahead of many people’s expectation. And we were — if you look at the total investment, the financial investment, which has gone in, what I call, not lost, but I’ll treat it as an investment, we have been able to manage the outflow for Mukutban at lower than what was initially projected in our internal budgets.

And that’s again happened, because of this similar kind of strategy which we are focusing, and you’ll find those — I know some of you follow the market very closely. You’ve got a lot of links with the dealers, trade and you’ve got your own market intelligence you’ll find that our trust even there is on the trade segment and that too with perfect Plus. And what is beginning to give us results today is the — perfect Plus has got established as at least it’s our flagship premium brand, which today is positioned from a marketing language, if I call, in the entire HSM geography — HSM stands for Hindi Speaking Market as they call it in media.

In the Hindi Speaking Markets with being there, I am today able to leverage national media to promote Perfect Plus across all these relevant geographies, which is UP, Bihar, Madhya Pradesh, Haryana wherever our footprint exists — Rajasthan and now going down to Madhya Pradesh well. So that is the synergy which we have got, and that is part of a strategy, which I don’t think is easily realized, and that’s what differentiates us from many of our peers in the same league or in the same mid-cap or midsized brands which you’ve got the kind of synergies, which we — the way our growth has come. Our growth has not come in disjointed manner that you are there present in one region in the East, and then you have got a pocket of presence right in the West.

Our growth has happened contiguously. So if you see from Bengal, we are not present in Chhattisgarh of course, Odisha of course, but from Bengal, you can draw a line and take us all the way once to the west and then if you come on towards Maharashtra.

I’m diversing a bit. And the importance of that is, again, something which people haven’t realized earlier, I’m underscoring, some may not have realized I shouldn’t be presumptuous in saying, today, people say what will you do with your clinker in Mukutban. But one doesn’t realize my clinker from Mukutban can reach Durgapur as cost efficiently as we could do earlier from Maihar or Satna.

And in the process, my Maihar and Satna clinker is getting released if I take excess clinker from Mukutban to Durgapur, but Maihar and Satna clinker is getting release for UP, Madhya Pradesh, which are my most profitable market. So that is what’s giving us people when they ask me why, how will you leverage if you don’t have additional clinker capacity, where will you get your margins coming from? And that’s the little bit of a clue you have that how we have been able to manage our results in the last quarter. It is by no slide of hand and no accounting jugglery. It is these kind of adjustments, which has allowed us to deliver the results which we have in the last quarter.

Again, Mukutban does not restrict me to be selling only in Maharashtra, Surely, else in Maharashtra as much as I can. And as it becomes profitable, more variable, obviously, I’ll maximize Maharashtra. But today, I’m from Mukutban and I’m able to supply on a contribution positive basis to South Madhya Pradesh. And what’s that doing for me is releasing South Madhya Pradesh capacity for me from Maihar, which I was telling earlier. And today, Mukutban can supply all the way to Khandwa, even if I want to take it, I can take it all the way up to Jabalpur, etc, but I may or may not take it. But I’m able to supply Southern Maharashtra and releasing that amount of clinker and volumes for me to go and sell. And in my core markets and protect my market shares there as well as my price points there.

So Mukutban — from Mukutban I have been supplying South Madhya Pradesh, from Mukutban I have been able to take material. Now those of you keep tab in the market would know an area which was out of reach from me earlier, which was South Gujarat, which was not viable for me to sell from. Chanderia an area where I could take it. Today, Mukutban is giving me a reach there.

Not to mention when Telangana becoming more the price position is improving there. Telangana is my proximate market. So some of these elements, which are happening, I think that together gives us a great deal of confidence going forward, I don’t want to repeat to you what are the demand projections in the geographies where we are there. All of you know that much better than me. But it gives us confidence that even if the price situation remains static going forward, we are quite well placed in the coming year to realize our ambition.

Having said so much, I will take a pause and pass on to my colleague and CFO Mr. Adi Saraogi to give you some more idea of the financials before we come back to taking questions. Thank you.

Aditya Saraogi — Chief Financial Officer

Good afternoon, everyone. So in the fourth quarter, we have posted an EBITDA per ton, including Mukutban of INR615 per tonne, which is marginally lower than what we had done in the corresponding quarter previous year, it was INR650. So there is a drop of about INR35 odd. That’s mainly on account of higher fuel costs which, to a large extent, we were able to mitigate by higher realization.

On a sequential basis, our EBITDA per ton has grown by INR240. Now, that’s a function of higher realization, which as Mr. Ghose explained, despite relying market conditions, we have been able to improve by better geo mix and higher blended cement and higher premium category of cement as well as reduce costs.

I now request the audience to come up with the questions.

Questions and Answers:

Operator

The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Shravan Shah — Dolat Capital — Analyst

Thank you. First of all, thank you for hosting the call, and I hope we will continue to doing calls after every quarter results it would be a great opportunity to interact with the management. I have three broader questions of course, definitely on the Mukutban. So in terms of the volume, it is also good to see that we’ve now turn EBITDA positive in the month of March. So how much volume we have done in the fourth quarter and FY ’23, how we are looking at in FY ’24 and FY ’25 in terms of increasing the utilization. At the same time, in terms of the profitability. So now we have turned into EBITDA positive. So how are we looking at FY ’24 as a full year? Can we see the EBITDA per ton equal or maybe higher than the existing plants for the Mukutban? And also in terms of the incentives for the Mukutban. So what are the incentives, if you can quantify also how much we have booked in the FY ’23 and how we are looking at FY ’24 and ’25

Sandeep Ghose — MD and Chief Executive Officer

I would like to take the first part of the question and clarify certain things about the strategy of Mukutban before getting into the specific numbers of volumes and incentives, etc. Our first objective for Mukutban is not to ramp up just for the sake of ramping up, but ramping up profitably. And when we talk of ramping up profitable level is ramping up the clinker capacity because — unless I run my plant in a continuous basis, my cost of production goes up. And that’s why I hinted to you that Mukutban clinker, we would be using not just in Mukutban maybe in other places as well because that is what is going to give me better utilization of my clinker capacity.

Now thereafter, my trick in Mukutban is how my costs come down. One of the problems which we faced in the previous year, was Maharashtra much to the contrary to expectations, prices in Maharashtra had not gone up. In that situation, if my costs were high, my ability to spread across in the market was difficult and some of the growth which was coming from the Infrastructure segment, which are obviously into OPC and it is at a nontrade at a lower level. I was uncompetitive there.

But that is going to change dramatically, has already changed. That’s what has made us now today EBITDA positive because my costs have started coming. And as I utilize my plan better, my costs will further come down, increasing my competitiveness in the primary and the secondary market of the equipment to increase my volumes.

So what is relevant is not really what we have done in the last quarter. But my kind of exit numbers, I am exited month of March — at about 1 lakh tonnes of cement from Mukutban and we want to exit next year at about INR2 lakhs in terms of cement from Mukutban. And obviously, the average will be somewhere in between 150, 160 would be the average through the year in terms of cement when you are talking about.

But my clinker utilization correspondingly, we expect it to be much higher because my ambitions are higher, which will allow me to take Mukutban clinker either through swapping, which I swapped close by, and I used other clinker in my plans apart or where I told you today, if you look at the map before you from Nagpur to Durgapur is not that far as people think compared to hear from my here from Durgapur to etc. So there are options for me. I could be swapping Mukutban clinker, getting clinker in Durgapur from somewhere else or otherwise to be using my therefore, corresponding clinker utilization would be much higher than the two lakh tonnes, which I’m talking about of cement when I’m exiting the year.

Shravan Shah — Dolat Capital — Analyst

That’s a great thing. Just a second on the broader costing in terms of reducing the overall cost, not only the definitely Mukutban you have mentioned, sir. But as we mentioned in the press release in terms of the project Sikar and for this — so broadly, if you can highlight in terms of the raw material, logistics, power and fuel also including the increasing the mining the coal production how we are in terms of — and also if you can quantify in terms of the number broadly, how are we looking at in terms of reducing the cost in the next year, FY ’24 broadly?

Sandeep Ghose — MD and Chief Executive Officer

On account of these specific projects that we have undertaken on part of the management, we expect a saving of at least INR50 per tonne. Okay. And coupled with that, the better realization in terms of data generated, higher volumes and higher premium cement, our overall profitability is definitely going to be much, much higher than what we have done in this year, which was option because of Mukutban being the first year. Just to give you a sense, when we started Mukutban operation, our variable cost of cement was more than 4,500 and when we exited in the month of March, it was less than INR2,800. So you can now understand with that kind of a cost structure at the beginning, the more we sold, the more losses we would have incurred, so we were deliberately enough pushing the volume. Now that our cost settlement has become competitive, in fact, in the next financial year, it’s going to come down up to INR100. So with this cost competitiveness, so we will not be in a position to ramp up our volumes. Coming to question regarding incentives.

Aditya Saraogi — Chief Financial Officer

Just one. On the cost, please keep in mind two things, when you’re talking specifically Mukutban, one is our incrementally a linear reduction of costs, which we are doing, but there are certain options available to us. I do not want to elaborate, which are also going to give a step change in cost reduction. It has to do with — in the raw material and fuel, etc, which is going to come. We have already, as you know, commissioned WHRS on the fuel and bar side. There would be other things which are going to give us step change — step reduction in cost over there. But similarly, nationally, if I were to take this thing, we are one of the companies which will use a maximum percentage of our own gold because of our captive mines, which is going to go up further. Our work on — we have got a lot of work to do on AFR, which is now picking up. So a percentage of AFR will be also our alternative energy, green energy, that is — things will go up. So you will see much more improvement about INR50, we will not commit anything right now, but we expect we — our ambition is to do much better than that on the cost chart.

Sandeep Ghose — MD and Chief Executive Officer

Of course, that INR50 did not conclude the we expect from commissioning of the Weston coal mines in the second half of this year. So those are the on account of the improvement projects like we have ensured the operational side. And coming to incentive on Mukutban, one person have asked, so it is approximately INR600 per tonne. But that will start getting reflected in our P&L only towards the middle of H2 of this financial year. So the full effect of the incentive will really be seen in the results of the next financial year.

Aditya Saraogi — Chief Financial Officer

You might like to explain to them, why?

Sandeep Ghose — MD and Chief Executive Officer

Yes. Because currently, we are availing of the input tax credit, which got accrued on account of capital expenditure that we did. So till first time that input tax credit debt can consumed, we are not required to pay GST to the government and since we are not paying any GST to the government, so there is no question of getting any refund of the GST. So that situation of payment to GST bill rise towards the middle of the second half of this current year. And that’s when we will start accruing the incentives say about And just to give you a lead, so today when I’m selling, I am that’s why under no compulsion to sell everything in Maharashtra and incurring a high loss. I can restrict by Maharashtra sale instead of trying to spread than and go beyond. I am able to sell in Maharashtra in my proximate areas of Vidarbha and other markets, whereas, I have the flexibility to sell the same quantity if I get a better realization, whether it’s in MP, in Gujarat, or in Telangana, and once my incentive starts hitting it, that’s going to change the game. That’s going to be a game changer as far as Maharashtra is concerned, and then I can really go all out.

Aditya Saraogi — Chief Financial Officer

So we have been able to achieve this EBITDA positive status without incentives.

Shravan Shah — Dolat Capital — Analyst

Got it, got it. Last, sir, on the expansion on the date front, so we.

Operator

Sorry to interrupt sir. We request you to please rejoin the queue if you have further questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. You may rejoin the queue if you have further questions.

The next question is from the line of Rahul Jain from Credence Wealth. Please go ahead.

Rahul Jain — Credence Wealth — Analyst

Thanks for the opportunity, and congratulations on good set of numbers and also in terms of being positive on the Mukutban plant. Sir, two questions, one is with regarding to the expansion, the road map ahead for our next phase of growth to enhance capacity of 25 million tonnes, which we have talked about in a couple of Asian interactions in the last two years, both — and if you could share some details with regards to the clinker and the grinding capacity, which we are going to add, the location for the sale, is there any inorganic expansion opportunity being explored. So what I’m trying to understand is the expansion road map for the next two, three years? Shall I ask the second question?

Aditya Saraogi — Chief Financial Officer

Yeah. Yeah.

Rahul Jain — Credence Wealth — Analyst

Two things you need to keep in mind in terms of reality, is the COVID situation, which happened was delayed lot of plans, including our Mukutban expansion. There was no problem from our side. But in terms of the construction, everything, it went up.

So now our first objective would be to not only maximize capacity utilization, but make it, as I said, make it maximize it in the most profitable way. So you — this 25 million tonne target remains so does our 30 million tonnes going forward. All of that remains, but there may be a change in timing.

In terms of sequencing, our next priority would be setting up the second line in Maihar, which we will look at. And then start also putting grinding capacities for that additional clinker, which is going to come in. And for that, we have got three or four auctions, which are lined up, but we will go in terms of hierarchy and depending on how the market evolves. So that’s how we’ll go. But we have today enough, shall I say, I’ll not call it headroom, but I’ll call it elbowroom to optimize our existing clinker availability more profitably and generate the cash flow, bring down our leveraging so that we are able to make — to undertake the next expansion at the time of our choosing, depending on how the market is going. Sir, my second question is about the power and fuel cost. Am I audible?

Sandeep Ghose — MD and Chief Executive Officer

Yes, you are.

Rahul Jain — Credence Wealth — Analyst

Sir, with regards to the power and fuel cost and the inventories of coal and coke and coal and the pet coke from the data available through the results, like last 5 years, except for FY ’23, our average power and fuel per tonne cost used to be around INR1,000 to 1,100 range, which last year for the full year went up to 1,500 and in the previous 3 quarters, we were averaging around 1,600, but we have done exceptionally well in the fourth quarter when we have been able to bring this down to around INR1,290 crores, INR1,300 per tonne. So — how do we see this going further improvement with regards to the various initiatives on WHRS, captive power, our own coal coming in, the inventories which we have, so if you could share some details or some light on the power and fuel cost going ahead.

Sandeep Ghose — MD and Chief Executive Officer

See, my own sense is that in the next financial year, we should our conf to be lower variable to at least 250 per tonne. That’s a more. On the case of various initiatives that we are taking, whether it is a basis because we on starting of become full 9. And even the solar power plant that we have set up. So it should be north of INR250

Rahul Jain — Credence Wealth — Analyst

So uses, just to clarify, this INR250 you are talking from the amount from the fourth quarter, that is 250 incremental from INR1,300 per ton.

Sandeep Ghose — MD and Chief Executive Officer

From INR1,500, there is a for the fourth quarter was INR1500 know.

Rahul Jain — Credence Wealth — Analyst

Fourth quarter is around INR1,300 power and fuel cost per tonne. For the full year it is 15,00.

Sandeep Ghose — MD and Chief Executive Officer

Yes, from 1,500, were you expecting a reduction of more than INR250 per tonne.

Rahul Jain — Credence Wealth — Analyst

Sure. Thank you so much. I’ll come back

Operator

The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Please go ahead.

Amit Murarka — Axis Capital — Analyst

Hi. Good afternoon and congratulations for hosting this call, and thanks a lot for hosting it firstly. So — and on Bokun, so — you said that you have not sold much in Maharashtra. So how are you placed on the distribution network there? And when do you plan to build out the distribution network? That’s the first question.

Sandeep Ghose — MD and Chief Executive Officer

Don’t get me wrong. I have not said we haven’t sold much in Marash. Obviously, when I’m selling 1 lakh tonne, my majority will be in Maharashtra. But my distribution network, as you are saying, I would first content, I have my seeding done much further, almost all the way up to Pune on this side of Bombay, etc. But there is no point activating that network beyond the point until I’m able to profitably supply those markets. So when I am selling 1 lakh tonnes, I’d be selling at least 80% of that within Maharashtra even now. But I would focus in the more proximate market of Vidarbha Khandesh and I would consider right next to us, the Telangana area, Nizamabad and all those things is also being proximate markets. Those is where I will concentrate first rather than push myself thin to go further down to Aurangabad, Pune and other places until I’m profitable. But that is a dynamic situation. As Mr. Aditya Saraogi has said, the way my costs are dropping. It’s a matter of every other day when you’ll find my expanding my footprint. And for that, I’m ready.

We have earlier shared with you numbers, which I don’t have handy as to how much, how many distributors and other people we have already appointed. Our sales teams are ready. But right now, I am focusing and concentrating, bringing my troops in to much more to operate in my proximate areas within 150 to 200 kilometers of mine plant, before I spread next to the 300 kilometers or so range, 250 to 300 kilometers radius is what I’ll move after this.

But at any point in time, you will find at least 80% of my volume from Mukutban cement volume will be sold in Maharashtra. And once the whole incentive kicks in and as I said, the ball game will change. And by then, I suppose I’ll be on my third con call with you, and then we’ll give you a better picture.

Amit Murarka — Axis Capital — Analyst

Sure. Just to understand this better, but you said that the incentives have not been accrued. So if you’re already selling like won’t some incentives accrued for the GST credit?

Sandeep Ghose — MD and Chief Executive Officer

How it works is first, before you start getting the incentive, all my GST, which I’ve paid before, which is mainly on account of the plant, that is lying to my credit, so first, that will get offset. And after that has got offset, only then I will start getting the incremental credit, which will go into my bottom line.

Amit Murarka — Axis Capital — Analyst

Okay. Understood

Aditya Saraogi — Chief Financial Officer

So actually, just to give — clarify, whatever GST we charge from the customer, so that is not required to be paid because you have got our credit line in our books. So we use that credit to set off against the payment as a required to be made. And since we are not making any payment of GST, we are using our import tax rate, which is lying with us. And therefore, we are not making payment. And since we are not making payment, there’s no question of claiming reinvestment from the government.

Once you start making the payment, once we address the full amount of import tax rate, that’s a time when we will start making payment of GST to the government and then claim 100% of the GST from the government. I hope our NPS.

Amit Murarka — Axis Capital — Analyst

Understood. What is the total quantum of the incentive in rupees crores?

Aditya Saraogi — Chief Financial Officer

It is 100% of the project cost. So it will be around INR2,300 crores. And it is available for a period of 20 years and 100% of GST is available.

Amit Murarka — Axis Capital — Analyst

Sure. Got it. And in the existing plants of Reliance, are there any existing left or they have all expired?

Aditya Saraogi — Chief Financial Officer

No, no. We have incentive in our Kundanganj plant.

Amit Murarka — Axis Capital — Analyst

Okay. And when does that expire?

Aditya Saraogi — Chief Financial Officer

By the end of this financial year.

Sandeep Ghose — MD and Chief Executive Officer

2024, end of 2024. I saw somewhere, somebody is saying that it is 2023, it’s expired. It’s not expired. We still have at least a runway of one more year until other changes happen, which will discuss it at an appropriate time. But we still have a full year to go before Kundanganj gets exhausted.

Amit Murarka — Axis Capital — Analyst

Sure, sure. And just the last question from me. Like on Kundanganj, there was plan to add 1.2 million tonnes there. So what’s the status on that?

Aditya Saraogi — Chief Financial Officer

See for your information, our rated capacity in Kundanganj was two million tonnes. So by internal optimization alone, we have been able to ramp it up to 2.5 million tonnes. And since we did not have visibility on it so that’s the reason, we did not make additional investment on the grinding unit immediately.

So what we are going to do as Mr. Ghose explain, we are going to align our next phase of setting our grinding unit with the major nine kilo expansion so that we have got center to support the grinding units. So that is a manifest going to expand our business.

Amit Murarka — Axis Capital — Analyst

So you think the Chanderia debottlenecking clinker debottlenecking is actually, you didn’t have the visibility on that one.

Aditya Saraogi — Chief Financial Officer

No, that has already happened last year. There has already happened last year.

Amit Murarka — Axis Capital — Analyst

Okay. So I’ll come back in the queue, Thanks yeah.

Aditya Saraogi — Chief Financial Officer

And you see the — for the rest, not just answering your question, Chanderia clinker, if you see the overall clinker balancing in the northern region, there is enough demand for Chanderia linker to be used in its own native markets.

The market would be Rajasthan and going down south into Gujarat an also open toward Haryana and Western UP. So there is not going to be excess clinker available to me from Chanderia to take into Kundanganj and that will not be the most economical way to do it.

But whatever we are getting today is $2.7 million. We will see that, as I told you, getting a cushion from what we’re getting from Mukutban and saving on some supplies which we were doing earlier to Durgapur, we’ll be able to utilize Kundanganj much better this year, demand supporting.

Amit Murarka — Axis Capital — Analyst

Thank you very much. I’ll come back in the queue. Thanks.

Operator

The next question is from the line of Kamlesh Bagmar from Lotus Asset Managers. Please go ahead.

Kamlesh Bagmar — Lotus Asset Managers — Analyst

Yeah. Thanks for the opportunity sir. Sir, all said and done, like you have high-trade Cement share Blended Cement and I believe, based on your data, your like say, Premium Cement would be highest in the industry.

But despite that, your margins are the lowest in the industry, if I compare with your peers. So why is it the case? Despite the fact that there was so much of carting being made on the part of Blended, Premium Cement every aspect of the Cement Production.

And secondly, sir, our growth in the month of April has been hardly around 4% to 5% in terms of sales volumes, despite the fact that the industry has grown at 15-odd percent, and we had a benefit of the capacity addition at Mukutban, why we have not been able to ramp up the volume?

Aditya Saraogi — Chief Financial Officer

First of all, I don’t know why you have got the figures of April from, because we don’t have that data to show that industry has grown by 15%. And we have grown far lower than industry. I don’t know the validity of that. So I will not be able to comment on that point.

There is very little ramping up, which we need to do because our mother units, if I were to call them, leaving Mukudban, they are all operating some even higher than 100% capacity. So where is the ramping up opportunity you’re seeing? I’m missing that point two.

Yes, our margins, to some extent, are curtailed, especially certain plants of ours. The cost is higher, like you know my cost of limestone in Chanderia is higher. My Satna plant is an older plant. So, the costs are higher. Mukutban, we have already told you, we are in the process of pairing. So, it’s not a question of we are not harping on anything, we’re just stating facts before you. The facts to be verified in terms of our numbers of how much of each brand we sell and what is the price we sell and what is — I’m sure your market checks and dealer connects will tell you what is the — our price points in the market. There is no question of either harping or making claims, which don’t stand. Those are based entirely on facts and facts, which can be, as I said, validated.

So I really don’t know where you are coming from in that point. Our costs are an issue and costs — and there will be various factors. If somebody is selling right next door, and he has got a 4.5 million tonne capacity, and he is selling right next door to the plant. And whether I have got a 20 million capacity, my lead would be higher. I’m bringing some time clinker from Chanderia and to the center somewhere I’m sending from my cost would be higher. If I had a 1 million tonne capacity, and I sold within 100 kilometers of my plant, I would obviously have much higher margins. So, I don’t know whom you are comparing as peer group. Peer group comparisons have to be done on a like-to-like basis, not because somebody has a plant right next door to me, but in terms of –. Similarly on the reverse side, if you are looking at Mukutban, my neighbors there are big plants, older plants, which have got the captive right next to the coal blocks, so the power costs are lower. Obviously, their costs would be very different and their mining costs are lower. So that will be different. We have to see each element, but assume that I didn’t have any of these premium volumes, which has been created over the last six, seven years, what would have been my profitability compared to anybody else.

Operator

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

Saket Kapoor — Kapoor Company. — Analyst

Yes. And thank you for the opportunity and we look forward for the continuity of the con calls going ahead also. Sir, — Ghose sir, as you were mentioning that — about the April number in terms of volume, but at least sir if you could give us some color since this is the peak season for the cement. What are the pillars on the ground currently in terms of the — what we exited March and how the situation is currently in terms of the optic, especially from the government projection also both from the trade and non-trade?

Sandeep Ghose — MD and Chief Executive Officer

Saket, you have been in the trade — you’ve been observing the trade much longer than I probably have been doing, you’re much younger than me. April is not the yardstick for the season. And April is not really when the thing starts and when you have one company selling 100 million tonnes in March end to completing that, what is the impact it has on the market and while others are also not giving. So, I don’t know, again, where the figures of 15% growth in April comes, you live in Calcutta, you know what is the situation in the Bengal market today. You know the pricing situation in the Bengal and the Eastern market and you know the conditions of the rains, which are untimely rains which have happened in certain other parts of the country. All these are the factors which are there. But once, as I think our overall projection is — as most analysts have given most of the firms like Rifle and others have given. One expects a healthy growth in volumes this year. None of us, I think, are optimistic about huge price jumps as has been seen and some of you have reported, a tense of price increase have not gone through reverse rollback and that’s also due to certain industry dynamics, which are flowing on right now, which I can’t spell out. All of you are aware of what’s happening between some big players, each one have been trying to secure their position. So we are — our strategy is based on that prices are not going to go up significantly. Volumes are going to move in a healthy manner. There are any major dislocations, disruptions or hiccups going forward.

And last bit, what you’re talking about in terms of the government spending, yes, I think I’ve written — I’ve said before, I’m very, very bullish on the India growth story. And everybody is coming to recognize investments that have gone into infrastructure I think, those are going to bear fruit. Like one has seen such things happening already in the Western market like Gujrat. Gujrati would have seen had gone through an exponential growth in the last year, which boosted a certain companies’ profitability because with bullet train, with the expressway, everything and all the development which is happening on the two sides of that that had boosted up Gujarat.

The same thing I expect to see in Maharashtra now. And most importantly, with states like Madhya Pradesh, UP, both in the run-up to the 2024 election and in the run-up Madhya Pradesh and Rajasthan run-up to the 2023 end election. You will find government projects like Pradhan Mantri Awas Yojana getting speed, and that’s a sweet spot for a company like us, which operates primarily in what I call the Rurban markets. By Rurben, I mean rural and the small towns, that is Tier two, Tier three towns, kind of market, which are on the outskirts that is where our strengths lie and especially in the Hindi Heartland, the Hattrem area of Madhya Pradesh, thats core area of Uttar Pradesh and Madhya Pradesh.

So I am — fingers crossed, I’m very optimistic about getting results there. UP is going great guns just now in all respects. Rajasthan should be doing well. Western MP is — all of you know, Western MP, I’m very well-positioned if you do some market checks, my Perfect Plus has established its position in the Indore and adjacent markets very well. So I’m quite confident of that going. Keeping in mind being very realistic about prices are not going to — anything coming up on prices is going to be bonus for me.

Saket Kapoor — Kapoor Company. — Analyst

Sir, small point on the EBITDA per ton, we did 615, that is taking into account Mukutban also. And now with the volume expansion coming towards from H2, what should be the ballpark number? What should be our endeavor going ahead as a combined entity to — for the EBITDA per ton number, what are the ink that, if you could give some color to it in that ballpark number we can look going ahead.

Aditya Saraogi — Chief Financial Officer

Our sense is we are working at a number of 8, 6, 2 plus percent for the next year.

Saket Kapoor — Kapoor Company. — Analyst

Okay, that is the average we are looking it?

Aditya Saraogi — Chief Financial Officer

Average.

Saket Kapoor — Kapoor Company. — Analyst

Okay. That’s a significant jump, sir.

Aditya Saraogi — Chief Financial Officer

Excluding Mukutban. Including Mukutban

Saket Kapoor — Kapoor Company. — Analyst

Including Mukutban.

Sandeep Ghose — MD and Chief Executive Officer

Including Mukutban, including our incentives kicking-in in second half. That’s to give you a sense, our EBITDA percent this year, inclusive of Mukutban was around INR480 per tonne. So from there, we are looking at a number of INR850 a tonne for the next financial year.

Saket Kapoor — Kapoor Company. — Analyst

Okay. And for the utilization level, sir, can you give some color what kind of shipment volume is we are looking incentments volume we are eyeing for next year?

Sandeep Ghose — MD and Chief Executive Officer

We are looking at more than 15% growth in volume terms.

Saket Kapoor — Kapoor Company. — Analyst

Okay. So on a base of 15.73 million we are looking at.

Sandeep Ghose — MD and Chief Executive Officer

More than 15% growth in volume

Saket Kapoor — Kapoor Company. — Analyst

On 15.73%, which we have done for the year?

Sandeep Ghose — MD and Chief Executive Officer

More than 15%

Saket Kapoor — Kapoor Company. — Analyst

And lastly, on the June part, sir, although it’s a very small

Operator

Sorry to interrupt. Please rejoin the queue.

Saket Kapoor — Kapoor Company. — Analyst

Yes. And all the best to the team, sir. Thank you.

Operator

The next question is from the line of Mangesh Bhadang from Centrum Broking. Please go ahead.

Mangesh Bhadang — Centrum Broking — Analyst

And congratulations on good set of results. Sir, very short and crisps, a couple of questions. Firstly is on the limestone availability. So you do three of our plants will face the scarcity — and second one is on our whole block. So I just wanted to have an update on the Bikram, Brahmpuri lock when they will be operational?

Sandeep Ghose — MD and Chief Executive Officer

So on limestone, I can state that in each clients of ours, we are in at least 20 years of results coming to the cold docs. As I already mentioned, Bikram we expect to start in the third quarter, October to be precise. And we expect to start in November of 2025.

Mangesh Bhadang — Centrum Broking — Analyst

What of the total central requirement will be met? And if you can give some idea in terms of rupees per –?

Sandeep Ghose — MD and Chief Executive Officer

Once Bikram is fully operational about 30% to 40% of our sales requirement with the met through captive sources. And on Multicem is commissioned and were fully commissioned. About 60% of our total for retirement at in will be made to captive polos.

Mangesh Bhadang — Centrum Broking — Analyst

Okay. So sir, just final rupees per KKL cost of the domestic compared to the current share as that — if you can give some right? The cost of the domestic coal in rupees per KKL term that you would incorrect?

Sandeep Ghose — MD and Chief Executive Officer

The domestic coal

Mangesh Bhadang — Centrum Broking — Analyst

Yes, sir.

Sandeep Ghose — MD and Chief Executive Officer

Versus which one?

Mangesh Bhadang — Centrum Broking — Analyst

So the cost of that domestic coal on rupees per KKL basis, how much it would be compared to the current cost that you are incurring for the rest of the plant. On the rupees per KKL.

Sandeep Ghose — MD and Chief Executive Officer

So current, the domestic coal cost currency will be behind, let’s say, 1.5 to 1.7, 1.75, depending on the region. Okay. And was the second part? petrol prices will be slightly higher in the region of 1.92. Okay. Sir. Thank you.

Operator

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

Prateek Kumar — Jefferies — Analyst

Hello, Question is on your guidance. So last year, when we started hearing commentary on your media interview, — we understand there was 15% growth that has given for FY 2023 for volumes versus what we hired like 10% like 11%. So where did that would come from, whether it’s from Mukutban or the other central operations Secondly, what is our target capex for FY ’23, ’24, ’25 or full year?

Aditya Saraogi — Chief Financial Officer

Question was not very clear, but as rates on volume, as Mr. Ghose mentioned, we consciously put ramp-up volumes in local brand because the more we are selling because of cost, the more losses are incurring. So our focus was really on the rationalization of costs and containing the losses rather than the mindless volume ramp up?

Sandeep Ghose — MD and Chief Executive Officer

No, sorry, if your question is where the 15% is going to come from, it is going to come from Mukutban as I said earlier, Mukutban we’ve exited about one lakh, we expect to exit at two lakh tons next year. We have got Alupuram in Chanderia where we are going to increase in Chanderia. We’ve got in Durgapur and we’ve got rationalization in Central India. So it will be fairly well spread our objective would be to get a maximum growth in the profitable areas, which is our most profitable areas, which I would say, which is Central India, where we would get it. But overall, it will be fairly well spread across the region. So Mukutban itself would give us at least a bump of average one lakh tons per month.

Operator

Thank you. The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead.

Navin Sahadeo — ICICI Securities — Analyst

Yes. Good afternoon sir, and thank you for the opportunity. It’s great to interact with you and your view from Sandeep sir. So thanks again for hosting this call. Sir, two quick questions. One is you mentioned that for future growth, the next point or like you may look at a line two at Maihar. Now given it takes roughly two years for the capacity to complete 1.5 year at best to get that capacity onboard what would you say as the tipping point to kick start this project, would it be a utilization of certain like that you have in mind? That once that — it hits that you think you go for Line 2? Or is it going to be some comfort on the net debt-to-EBITDA front, what would exactly that be?

And my second quick question in the interest of time is what is the current state of what is the current status of incentives receivable, I think this is more for Adityaji, so what’s the status on current outstanding incentives, especially from West Bengal because we recently saw some other cement company provisioning a loss on that particular front. So your views will be very helpful. Thank you so much.

Sandeep Ghose — MD and Chief Executive Officer

Before coming on the incentive, I’ll just take your point quickly. As you know, for a clinkerisation unit, there is both the outlay is much larger as well as you rightly said at the time. It all depends. This is slightly fluid in today’s world, we have to look at it from quarter-to-quarter.

If markets improve, if my cash flows improve, for all you know, I could be looking at a grinding unit in Eastern India, which I can still feed from Mukutban in terms of my additional clinker and that might come up before I look at a Maihar line expansion. The Myer line expansion as soon as I go, that, as you said, it depends on my balance sheet, how much money I do. And if that is not happening, maybe I’ll first go for Maihar.

So these things we will get greater clarity as we move along, but we are quite confident that as I told you, our existing capacity to give the reasonable growth both in top line and bottom line, we are well placed. There are various levers available to us including increasing the level of premium, which we have got on our brands. I hinted about it to you that today, my ability to more cost effectively invest on a brand like PERFECT PLUS increased a great deal.

So I would have opportunity to increase my margins, my premiums on those brands across the market, expand its footprint to other innovations. So those also will give me. So we are looking at both the top line and bottom line to meet the market expectations or street expectations to keep us growing, and we will go in for the investment, we’ll cut the coat according to the cloth available. I’ll leave it to Adit to respond on the incentives.

Aditya Saraogi — Chief Financial Officer

Yes. On specifically on West Bengal and sales tax we also have some outstanding of INR140-odd crores. But recently — so we had — because we are not getting the money we had approached filed a petition before the High Court for recovery of the amount — and we have informed that some time back, High Court pleased to delayed the state government to pay off the incentives which we still haven’t got. So we have again gone to the high court against the State Government with a plea that incentive disbursed immediately.

Navin Sahadeo — ICICI Securities — Analyst

Yes, correct. But the annual accrual is on the higher side and actual receipt is much less. Is that a correct understanding? Because last year also, we would have

Aditya Saraogi — Chief Financial Officer

See actually, in this year, just to tell you, our receipt of incentives worth about INR200 crores, okay? And our accrual was also similar to that — and that was only because in Uttar Pradesh there were certain procedure issue — so you’ll find that this year, receipt is going to also the accrual to a large extent.

Sandeep Ghose — MD and Chief Executive Officer

You have to segregate between West Bengal and others. West Bengal is a very typical — That old case we’re not accruing anything more in West Bengal. It’s a old and frozen case, it is only a question of us being able to take the money out. And we have got comfort from the high court ruling that it should happen sooner than later or sooner or later, it will happen.

As far as Uttar Pradesh, Madhya Pradesh goes, we don’t anticipate a problem. It’s a timing issue. Last year, there were certain procedural things to the delay, but there is no mismatch between accrual and Madhya Pradesh, in any case, there’s no further actual that’s over. Uttar Pradesh is — that’s happening. And as soon as they start releasing, I think we should be better off.

Navin Sahadeo — ICICI Securities — Analyst

Great, sir. Great. Thank you so much and all the very best

Operator

Thank you. Ladies and gentlemen, that was our last question for today. I would now like to hand the conference over to Mr. Rajesh Ravi from HDFC Securities. Over to you, sir.

Rajesh Ravi — HDFC Securities

Yes. Thank you everyone for participating in this call. Sir, would you want to make any closing comments before we conclude the call?

Sandeep Ghose — MD and Chief Executive Officer

I would like to only think I missed. Only thing I missed adding is we now — as we have said, our management e-team, we’ve got a new e-team with very valuable additions. We have Rajat Prusty, who has joined us from Adani or formerly SEC as the Chief Manufacturing Officer and Projects Officer, Mr. Prusty — he brings in a long experience from in SC, about 30 years of experience, starting from the mine. He is worked grinding units. He’s worked integrated units and ten worked both in projects. And essentially, he has worked so he has a long innings and when he was in the the Ambuja set up. He was the CMO of large geographies from there he has joined. Mr. Prusty i is a great addition, and he has already brought in a new energy into the manufacturing side. As you see — as you yourself noted, in the projects initiative which we have started.

And we have got Mr. Kalidas Pramanik. Again, Kali has got a very, very interesting mix of experience. He spent 15 years in the cement industry, largely with ACC. From ACC, we went to an adjacent industry, which is fertilizer. He was already Head of Logistics and Marketing in Coromandel fertilizer one of the finest and best managed fertilizer company.

And from there, he has come to us. So he brings a good blend of logistics and sales experience. And as you know, in cement, how important logistics is, and that’s where the next — what I say, the way of innovations will happen. The cost so heat — will add value. And one of Kali’s specialization, he was in ACC, he was the man implementing the wholesome price management in India. He also had launched the FTR, which was launched by whole against concrete or Lafarge. He was a person who launched there, and he pioneered the wholesale price management. So, I expect Kali to bring in a lot of commercial insights and marketing insights in terms of increasing both our price positioning and premium positioning here.

And in addition to that, we have got some other additions in the team. We have a new head of IT, who has joined us from Penna Cement. Durgadas Mohanty, he was there. He would bring in probably a lot of changes in digitization, especially on the manufacturing side where Penna had done a good work. And then we have our younger team, you know Mr. Tamal Pal, who is heading our strategy. Tamal has been very instrumental in getting the new mining leases for captive fines, these have been initiated, which has been led by Tamal. We have strong CPD under Mr. Sanjiv Daga, which is now a centralized function. CPD is division centrally, Mr. Adit Sarogi, of course, every one of you know and interact with, and we have with him Mr. Arun Agarwal, who is our CFO. He is an old hand. He knows everything about Birla Corporation. He has been here for over 20 years. They’re working through various functions. So, we have a strong, young dynamic team, and that’s why we have started on these initiatives, which you have seen called 4 Vs.

4 Vs, I’ll just spend a minute and four Vs in OKR, as you know, is the objective and key results. It is the methodology followed by companies like Google. It was started by Intel, Adobe, Soft and all of them and many other companies in India. The importance of OKR is they realize that today’s volatile environment and dynamic environment, you need to keep your end objective clear, the longer-term vision clear, but were in short time horizons of three months with very, very specific objectives with results would to be visible which will show you where you are going. And I think you saw the first impact of this in our last quarter’s performance. And when we talk of 4 Vs, we first offer vision, which is selling or was the long-term objective. But when the next vision is we are saying values, we’re moving to a culture of value creation, value creation for all stakeholders, not just investors, everybody there.

But the third is most important in today’s point, which is the speed of action. Speed of action, we include — including the speed at which you correct your mistakes. Mistakes will happen, situation will change there. And finally, visibility because whatever we do has to be visible to stakeholders and to everybody to perceive that the action is really happening rather than our talking in conference calls. Thank you very much, and a great pleasure being with you all. Bye.

Operator

[Operator Closing Remarks]