Dalmia Bharat Limited (DALBHARAT) Q2 FY23 Earnings Concall Transcript

Dalmia Bharat Limited (NSE:DALBHARAT) Q2 FY23 Earnings Concall dated Nov. 03, 2022

Corporate Participants:

Aditi Mittal — Head of Investor Relations

Puneet Dalmia — Managing Director

Mahendra Singhi — Managing Director and Chief Executive Officer

Dharmendra Tutej — Chief Financial Officer

Analysts:

Inderjeet Agarwal — CLSC — Analyst

Rajesh Ravi — HDFC Securities — Analyst

Amid Monarca — Access Capital — Analyst

Hirsch Mitten — ICSA Securities — Analyst

Vivek Rama Krishna — DSP Mutual Fund — Analyst

Shrawan Shah — Dollard Capital — Analyst

Rutaceae — Investec — Analyst

Jushin Deep Chadha — Ambit Capital — Analyst

Sanjay Nandy — ETNA Valley Investment Private Limited — Analyst

Amman Agarwal — Equity Securities — Analyst

Kritiq — Jeffries — Analyst

Utom Kumash Rimal — Access Securities Limited — Analyst

Gerish Chaudry — Spark Capital — Analyst

Girija — Systematics — Analyst

Sumangal Nivadia — Codec Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the earnings conference call of Dalmia Bharat limited for the quarter and half year ended 30th September 2022. [Operator Instructions] Before I hand over the conference to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts, and maybe forward-looking statements. The forward-looking statements are based on expectations and projection and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by such statements on the call, we have with us Mr. Cooney Dalmiya, MD and CEO Dalmia Bharat limited. Mr. Mahendra Singh, the Managing Director and CEO, Dalmia Bharat limited. Mr. Dharmendra Tuteja CFO Dalmia Bharat limited. Mr. Rajiv Bansal, President and Chief Transformation Officer and the other management of the company.

I will now like to hand the conference call over to Ms. Aditi Mittal Head investor relations. Please go ahead.

Aditi Mittal — Head of Investor Relations

Thank you. Good morning, everybody. With your very warm welcome on the Q2 FY’ 23 and FY25-23 earnings call of Dalmia Bharat limited. Hope you all had a chance to go through the transcript and the results which we’ve been uploaded on our website, and they can be downloaded from the investor section on the website.

I will now hand over the call to Mr. Dalmia for his opening. Thank you.

Puneet Dalmia — Managing Director

Thank you Ality. Good morning, everyone. I hope all of you had a fun and festive Diwali with your family and loved ones. It gives me great pleasure to welcome all of you for the Q2 financial year ’23 earnings call of Dalmia Bharat limited. Globally, we are in the midst of some very uncertain times, with a mixed bag of news flowing in from across the globe. But even in this little bit of unrest, my personal faith and optimism on the economic prospects of the Indian economy is very strong. While all the major economies in the world are currently facing a serious set of recessions. India’s sound macro fundamentals, along with our government’s prudent economic policies, have thus far led us to be more resilient than rest of the world. I personally believe that the long-term story of India is intact, and the next two to three decades really belong to our country.

Given a combination of factors, such as our demographic construct, a very large consumer base, the state of urbanization in the country, and the China plus one policy. I strongly believe that for India to take advantage of this opportunity that lies ahead of it and for the government to generate employment opportunities for millions of people who are getting added to the workforce every year. The trust on infrastructure development increased public spending by the government and augmentation of private capex is inevitable. And rightly so, the government has recognized this. And over the years, it has increased its allocation towards infrastructure, and also created an enabling environment for private investment. All of this makes me believe that the crucial role that the cement sector is going to play in India’s growth story is going to be very important.

Despite the lows of last two years, whether it was COVID, or whether it was China-led supply disruptions, or the Russia-Ukraine war, we have bounced back very strongly as a sector. And I’m personally very bullish on the long-term prospects of the sector. And we remain committed to a long-term goal of 110-230 million tons by 2031. We are also committed to an internal milestone of 49 million tons by March 24. And I’m happy to say that we are absolutely on track to deliver that on time. This has given us confidence of setting another interim milestone of 70 to 75 million tons by financial year ’27. A lot of work has already started on this, but details regarding the same will be shared in the next couple of quarters. Over the last 10 years, we have grown at a CAGR of 15%. And that too, without leverage on the balance sheet, and having a net debt free company.

At the same time, we have also grown our sales volume that is similar rate, which has also led to an improvement in utilization. And even when a company has grown at such a fast pace, we have never taken a focus off from building long term cost efficiencies, which has consistently led us to be one of the lowest cost producers in the country. Optimizing cost of production and creating a low carbon footprint is a part of our DNA and is deeply embedded in our operating culture. Considering that the cement sector is likely to grow at 1.1 to 1.2 times GDP over the next 10 years and given the likely consideration in the industry, we see the top four players increasing their market share substantially over the next 10 years. Now coming to the quarterly performance. We have again delivered industry leading sales volume growth of almost 13% on a worldwide basis. During the quarter, we have also seen significant margin compression due to steep energy inflation.

And I hope that the worst is behind us. And with costs moderating, hopefully the margin recovery can reasonably be reasonably meaningful in the upcoming quarter. I also recognize the fact that for a company which is growing at a pace at which we are planning, we need to create a large pool of leaders who could help us navigate from where we are today to our vision. In every phase of growth, we have made significant investments in our people, and we will continue to do that. Hence, we are undertaking an HR transformation program, which I’m personally sponsoring. Under this we are looking at policies, succession planning, streamlining our organization structure, the diversity of our people, learning and development, and upskilling initiatives including and looking at incentive structures of people, etc.

I’m personally very happy with the journey that we have achieved so far. And I think this is the time to have conviction in the future and increase our investments in India and our people, and we are going to do exactly that. I think we are the best for India and Dalmia is yet to come. And I’m very excited about the journey that we have set ourselves on.

I will now hand over the call to Mr. Singh to take you through the other details. Thank you. Mr. Singh you over to you.

Operator

I believe the management line is muted. Ladies and gentlemen, we request you to stay connected. Ladies and gentlemen, we request you to stay connected. Ladies and gentlemen, we have the management on the call, please go ahead and read it.

Mahendra Singhi — Managing Director and Chief Executive Officer

Thanks. Happy morning friend, my apologies for little delay, hope all of you had great festive time. And let me in advance greet you, a very Happy New Year. Now, let me start with the operating performance. Now, you all know now so far that it was a very tough quarter for the Indian cement industry. But at the same time, our company has been able to deliver leading volume growth of 30% on YoY business, and which has, in turn, made our revenues grow by 15%. While August was an extremely weak one, there had been recovery in sector bonds, both in volume and little bit in prices. Like what would it be a shared, let me again reiterate that we have been able to make our total cost comparable, or one of the best in the industry, on account of various costs, control majors, we just loaded two majors our team has taken, and, on that account, we are quite hopeful for better view also.

Hence, we all have seen the impact of energy prices, both petrolium gold and coal on all variable costs. But to us, now, it looks like that fuel prices further should not go up and there may be opportunities of reduction in power and fuel costs if prices of petrol or coal comes down and dollar price remains stable. Our logistic cost continues to remain one of the lowest in the industry on account of various innovations, various measures, which our team has taken with the help of technology also, as well as with a better sales management also. Our EBITDA for the quarter stood at to be sold at nine growths, which translates to rupees 636 will be that person. For the rest of the year. We expect profitability to rebound due to a combined favorable impact of sales volume, prices, and then cost.

With a sharp management focus, we have remained one of the lowest total cost producers in the industry. Hence, we remain committed to continuously exploring new ways of long-term cost saving and implementing suitable pages that will enable us to retain our cost leadership. During the quarter, we have commercialized four megawatt of wasted recovery system power and 20 megawatt of solar power, which takes our total renewable energy capacity, 239 megawatts and which constitutes 84% of our power base. Fiscally, we have now taken the board approval to further add 155 megawatts to renewable power. This is beyond 170, which has been recovered renewable power, which are on track to implement by March 23. With this, our total renewable energy installation would be expected to reach into 128 megawatt by FY 24. And other levels, which adds to cost efficiency and facility is the announcement of our blended cement.

Our focus of last few years has been getting better results. And now, we may say it that for us, for this quarter, the blended cement percentage has been at 82%, and month by month, it should go up. What has been really encouraging is that in South India, which has traditionally been a ordinary port land cement market, we have increased our blending to 63% as compared to 47% in Q2 last year. With this, just amounts to our efforts on the grounds in regard to making negative somewhat acceptable as well as just amount to our blended cement quality. With all these measures, we have been able to dig down our carbon footprints to fold it 67 kg per ton of demand, which, in our view should be one of the lowest in the world cement sector. Hence, like what Dalmia said, we are on track to achieve our capacity advancement milestone of 49 million tons by March 24.

Further, in line with our vision to reach 110-230 million ton by 2021, we have set another milestone of 70-35 million ton by FY 27. And surely, we will come out with the details in a few quarters. For the last two and half years, our capacity has increased by 40% from 36.5 million to 37 billion tons. And our teams remain firm and excited on delivering strong efficient both on capex and operational. Before handing over the call to our CFO, Mr. Dharmendra Tuteja, I would like to share that we are working on in a big way on creating fuel and raw material security. Like it hasn’t shared last time also that we have now acquired one coal block and in time to come, that coal block will be able to give us fuel security for our eastern operations.

In addition to this, we have been also working in a big way on ensuring limestone security for a larger number of years and we are happy to share that each and every plant we have big limestone security. Hence, we are expecting that cement industry should be able to perform better in quarters to come and we are also expecting better demand in H2, which may also lead to better prices and better profitability. Thanks for joining and now let me request our CFO,

Dharmendra Tuteja to share his thoughts. Thank you.

Dharmendra Tutej — Chief Financial Officer

Thank you. Thank you, Singh. Good morning, everyone. Hope you all had a great Diwali celebration. On the capex front we are on track for the 49 million terms capex by March 24. Of the total capex of 3000 crores planned for FY 23, we have so far spent about 200 crores in H1 and are on track to spend the plant capacity as to as well. With respect to incentives, we have accrued 61 crore in Q1 and 119 crore in H1. In terms of collection of incentives, we have collected 84 crore during the quarter and 128 crore in H1. For remaining six months of the year, we expect to accrue incentives as similar run rate that incentives receivable as on Saturday, September to that pay 665 crores.

On the debt side are closing crosscut as on Saturday, September stands at 3000 to 87 crores which is an increase of rupees 147 crores during H1 this year. But net debt to EBITDA as of 30th September is 0.32 times. The board has declared an interim dividend of rupees four per share. We also continue to evaluate our investment in IES and we’ll take appropriate call on divestment at a fortune times. In furtherance of our long-term governor journey to adopt world class practices, we are benchmarking our accounting policies with the best in class. We’ll keep you updated about any changes that get implemented.

With this, I now open the floor for question answers. Thank you.

Questions and Answers:

 

Operator

Thank you very much. [Operator Instructions] We have our first question from the line of Inderjeet Agarwal from CLSC. Please go ahead.

Inderjeet Agarwal — CLSC — Analyst

Hi, good morning, sir. And thank you for the opportunity. I have a few question on the expansion pipeline that we have earmarked. So, when we look at 70 to 75 million ton, how important would inorganic expansion be? And on that note, are there any particular geographies that we are more keen about or want to avoid? And what is the kind of neuroses or valuations for inorganic expansion that we will look for?

Puneet Dalmia — Managing Director

I would like to share with you that we always are having specific programs and plans for organic growth and at the same time as and when there are opportunities of any inorganic growth we do evaluate and we are open for any region, but at the same time, lead that any inorganic ones that meet certain criteria, otherwise, we are now planning for 70-75 million ton for next few years to come.

Inderjeet Agarwal — CLSC — Analyst

Sure, but would you think that in East we will be restricted by CCI and Competition Commission issues are we still would have scope if you want to expand in eastern South as well in organic?

Puneet Dalmia — Managing Director

Let’s watch, what during that time come and then we’ll examine that.

Inderjeet Agarwal — CLSC — Analyst

All right. Sir, on Bihar grinding unit, the land acquisition continues to be delayed. So, what exactly are the bottlenecks that we are facing now? And what kind of line of sight you have on that expansion right now?

Puneet Dalmia — Managing Director

We are hopeful that we’ll be able to come down we are grinding right by March 24.

Inderjeet Agarwal — CLSC — Analyst

Sure. And my last question is on the limestone mine acquired at a hefty premium at almost 190% odd. So, what kind of is it more banking on blending it with the existing limestone we have? Or do you think standalone that mine we can be profitable by making cement clinker and cement of that mine. So, what is the thought process on that kind of premium that you are the industry is paying right now?

Puneet Dalmia — Managing Director

You know, you have likely said that there may be a blend of limestone with which may be available. And at the same time, let new deposits come in, because we also are aware that now, government is quite buoyant on exploring new limestone deposits and go for oxygen. So, wherever we have acquired limestone blocks, where they are premium, we are expecting a few more blocks to come and that may help but otherwise also, like cement industry will be growing at good growth. So that that will be helpful.

Inderjeet Agarwal — CLSC — Analyst

Sure, thank you. I have more questions and come back and thank you.

Puneet Dalmia — Managing Director

Thank you.

Operator

Thank you. We have our next question from the line of Rajesh Ravi from HDFC Securities. Please go ahead.

Rajesh Ravi — HDFC Securities — Analyst

Yeah, hi, good morning. I have a few questions. First are the housekeeping. Can you share the incentives booked, received, and outstanding in current quarter?

Puneet Dalmia — Managing Director

During the quarter we have received 84 corrodes and as of the quarter end, we are having 6465 corrodes to receivable.

Rajesh Ravi — HDFC Securities — Analyst

Thirty-four corrodes received in 655 outstanding, and how much was accrued in this quarter?

Puneet Dalmia — Managing Director

61 corrodes.

Rajesh Ravi — HDFC Securities — Analyst

61 corrodes. Second question pertains to what is the per kilo coal fuel cost in Q2?

Puneet Dalmia — Managing Director

It was 2.52.

Rajesh Ravi — HDFC Securities — Analyst

Okay, and Q1 it was?

Puneet Dalmia — Managing Director

12547. Marginally increased because of the iron coal prices.

Rajesh Ravi — HDFC Securities — Analyst

Okay. And do you see this meaningfully softening in Q3?

Puneet Dalmia — Managing Director

That’s right.

Rajesh Ravi — HDFC Securities — Analyst

Okay. So, is it fair to assume below two rupees per kilo cole?

Puneet Dalmia — Managing Director

No. Not that much but in line with the petrol prices the fall maybe you can expect around 10% reduction.

Rajesh Ravi — HDFC Securities — Analyst

Okay. Okay. And sir, any suffering in the village also this falling full price is also you reduce your electricity generation cost?

Puneet Dalmia — Managing Director

Yes, but we have already taken actions to reduce our donation costs by moving to the grid and other venues.

Rajesh Ravi — HDFC Securities — Analyst

So, like how much was the average cost sir, in Q2 and what are you looking in Q3 on the electricity cost?

Puneet Dalmia — Managing Director

For the current quarter it was six rupees blended.

Rajesh Ravi — HDFC Securities — Analyst

Six rupees blended, okay.

Puneet Dalmia — Managing Director

6.9

Rajesh Ravi — HDFC Securities — Analyst

6.9. Okay. So, this restatement of numbers again we are seeing that FY ’22, March 22 numbers, balance sheet numbers have been restated. Why is this continuing sir?

Puneet Dalmia — Managing Director

So, that was done in March. It was.

Rajesh Ravi — HDFC Securities — Analyst

No. Post marks annual report.

Puneet Dalmia — Managing Director

That was done in the last quarter when we merged moodily and BTCL, because that is retrospectively implemented from 31st, March 20.

Rajesh Ravi — HDFC Securities — Analyst

Okay, okay, but because the date came in after the 31st march, that is why these numbers are appearing now.

Puneet Dalmia — Managing Director

And appointed date was fully until the approved the order. Appointed it was 31st, March 20. So, we had to restate the previous year number also. And that was done the last quarter itself.

Rajesh Ravi — HDFC Securities — Analyst

Okay, in Q1 and only it has been effective. So, we don’t expect any further restatement of prior numbers here on.

Puneet Dalmia — Managing Director

I don’t think.

Rajesh Ravi — HDFC Securities — Analyst

Okay, and lastly, on this 26 million, and they are looking to add when it fears, FY 25 to 27. Could you give some sense of how much of this is organically you have planned for?

Puneet Dalmia — Managing Director

Forty-nine million damages all total organic.

Rajesh Ravi — HDFC Securities — Analyst

Right? This is done right?

Puneet Dalmia — Managing Director

Yes, for balance, like you said that you will be sharing details in few quarters to come. But at the same time, it’s difficult to identify any inorganic number. And that’s why all these numbers are organic.

Rajesh Ravi — HDFC Securities — Analyst

Yeah, the reason I’m saying these are all organic is which is on the pipeline, this 250 million.

Puneet Dalmia — Managing Director

That is a difference a year, still remains the same, we want to expand India players. We continue looking at organic and inorganic opportunity. So here with it has self-loathing and mark, you know, we are taken intimidated by smoke 75 on the front 27. Days of being bombed out. If we see a good inorganic opportunity, which means our vision and our strategy, of course, we look identical to PCs, I think it is easy to think of the price and automation. But you know, at this point kind of sale, how much will be organic, inorganic is not going to be possible. I think as a prudent management because you look at all opportunities always make some learning, but we are committed to deliver cells per milliliter by 20.

Rajesh Ravi — HDFC Securities — Analyst

Okay, great. So, I was just wondering is this the current plan is mostly all based on organic, right? You know, organic is opportunistic.

Puneet Dalmia — Managing Director

Now, actually, when you look at the dual strategy planning the customer thing that this potential nomic opportunity, but if they don’t come up, what are the backup plans, right? So, you cannot really guarantee something that are happening. Because it didn’t happen, we can deliver the number. So, there is always a plan A and a plan B.

Rajesh Ravi — HDFC Securities — Analyst

Okay. Okay. Great. So, thank you. I’ll come back in queue. Thank you.

Puneet Dalmia — Managing Director

Thank you.

Operator

Thank you. We have a next question from the line of Amid Monarca from Access Capital, please go ahead.

Amid Monarca — Access Capital — Analyst

Hi, good morning. Thank you for the opportunity. I wanted to understand on the balance sheet side the debt has gone up quite substantially in the first half. Our record has gone up by almost 2000 crores and I see that most of this is actually reduction in cash and cash equivalents lost it is almost stable. So why not the 2000-1000 crore I understand is reduction in value by it. But then there’s another 1000 crore reduction in cash and cash equivalents. So, could you help understand like, why is it so and it doesn’t tally up with the cash flow statement the Cash Flow Statement shows only kind of over 150-200 crores reduction in cash balances.

Puneet Dalmia — Managing Director

Out of the total reduction about 1100-90 crore is because of the reduction in the value of the iEX share. And balance reduction is deliberately planned because, when the interest rates are rising, what your cost of borings goes up and the yield on the treasury also drops in a rising yield curve. So, we kept rising treasury at a moderate level commensurate to our requirements and obligations. So, this was a bad strategy.

Amid Monarca — Access Capital — Analyst

Okay, but in the cash flow statement at least I can’t see a 1000 crore increase in net debt?

Puneet Dalmia — Managing Director

Some type of sicknesses, cash and cash equivalents as well as financial metrics. I just clarifying the call in the meanwhile, we can go to the next question.

Amid Monarca — Access Capital — Analyst

Yeah, sure. You know, that’s all from my side.

Operator

Thank you. We have our next question from the line of Hirsch Mitten from ICSA Securities, please go ahead.

Hirsch Mitten — ICSA Securities — Analyst

Good morning. Thank you for the opportunity. Just wanted to know what is the price movement from September exit in your co market?

Puneet Dalmia — Managing Director

I will say, to some extent, prices have gone up by 2025 rupees in Kerala maybe 10 to 22 bit in Tamil Nadu and not much in Maharashtra. In East pocket, maybe five rupees here and there not much.

Hirsch Mitten — ICSA Securities — Analyst

How is it the blueprint in the premium segment shared sequentially?

Puneet Dalmia — Managing Director

It’s 30% of rate.

Hirsch Mitten — ICSA Securities — Analyst

20% for the quarter and for the passporter?

Puneet Dalmia — Managing Director

19%.

Hirsch Mitten — ICSA Securities — Analyst

Okay, thank you. Market.

Operator

Thank you. We have a next question from the line of Vivek Rama Krishna from DSP Mutual Fund. Please go ahead, sir.

Vivek Rama Krishna — DSP Mutual Fund — Analyst

Hi, since in the middle of a capex plan, I wouldn’t know what would be your peak debt levels that you’re looking at over the next two years looking at 23 and 24? And is there any target metrics in terms of debt, EBITDA, or something that you will keep for your capex plan? That’s the only question. Thank you.

Puneet Dalmia — Managing Director

Yeah, we had already announced in our capitalization policy that our net debt EBITDA will not cross to one, unless there is a strategic acquisition for which there could be a temporary blip beyond too soon.

Vivek Rama Krishna — DSP Mutual Fund — Analyst

If I can get this bottom window I think, if it is a regular growth in FY 27, we expect to return to be below two, but you know, as we know, a lot of the opportunities don’t come unexpected the way they think is a good innominate opportunity for entailing period, you may have a little bit of go up depending on the opportunity the size and valuation, but we are committed to ensure that all the data always falls below three.

Puneet Dalmia — Managing Director

Thank you very much. Good luck. Thank you.

Operator

Thank you. We have a next question from the line of Shrawan Shah from Dollard Capital. Please go ahead sir.

Shrawan Shah — Dollard Capital — Analyst

Thank you, sir. couple of data points. First is our trade center and lead distance for Q2 FY 23?

Puneet Dalmia — Managing Director

Elite distance to the 308 kilometer.

Shrawan Shah — Dollard Capital — Analyst

And trade sir?

Puneet Dalmia — Managing Director

64%.

Shrawan Shah — Dollard Capital — Analyst

Okay, and fuel mix?

Puneet Dalmia — Managing Director

Your tax code is 59%. That is all.

Shrawan Shah — Dollard Capital — Analyst

Sorry, Petco. 59 now, domestic coal is how much because last time it was, I think 16, 17%?

Puneet Dalmia — Managing Director

It’s about 14%.

Shrawan Shah — Dollard Capital — Analyst

Okay. The third question is in terms of, do you mention that mostly, even if the inorganic opportunity, we will not be able to crack then also organically as we have a plan A and B in terms of to restore 70-75 million by 427. But in terms of the broadly in terms of the capex for the incremental from 49 to 75, will it be fair to assume that close to $100 per turn? That’s the fair way to look at in terms of the capex for the incremental capacity.

Puneet Dalmia — Managing Director

Hello?

Shrawan Shah — Dollard Capital — Analyst

Yeah.

Puneet Dalmia — Managing Director

Can you repeat the question please?

Shrawan Shah — Dollard Capital — Analyst

Sir, I am asking that for incremental capacity addition from 14 line 270 5 million tonnes in terms of, let’s assume if we if we go through the organic way, then the capex bought on, is it fair to assume that $100 per ton, that’s the fair way to assume?

Puneet Dalmia — Managing Director

Difficult to say at the moment. Cnce we come out with our plan, then the team will be able to share these numbers.

Shrawan Shah — Dollard Capital — Analyst

Okay. Okay. And in terms of the FY 24 and Fi 25/24, the capex will still remain that 3500 crore.

Puneet Dalmia — Managing Director

Yeah, it should go up 3000-400 crore.

Shrawan Shah — Dollard Capital — Analyst

Okay. And even if we assume the nothing comes in terms of the inorganic, and though we have a target to reach that, and we will be announcing the detailed plan in next couple of quarters. But can we see at least five to 10 million ton, five to 8 million ton will be added by FY 24-25?

Puneet Dalmia — Managing Director

Yes, yes. See, when we announced the plan for $49 million, about two years back. I think a lot of people told us that, you know, its weaknesses, it may not be possible, and we’re committed demonstrated that, you know, our vision capabilities at best. And to a large extent, whatever we commit with, now, when you committed to a 70 committed permanent, and he says, and this can go hand in saving on but it’s not the right plan at this stage. But, you know, of course, it mostly come every year, they just got to put a number of how much of a fit. Because, you know, we still have to tie up the loose ends for every single plan that we have. But yes, as you rightly said, we’ll announce this in the coming quarters on a piecemeal basis. So, but, you know, given our track record of having delivered good capex growth and good capital equals, I think we feel very, very confident and absolutely sure of anything that return.

Shrawan Shah — Dollard Capital — Analyst

Okay, and lastly, sir, in terms of the moodily now, how would be the utilization for this quarter and we were looking at 60-65% for FY 23. So, is that remains intact?

Puneet Dalmia — Managing Director

I will say it would be around 60%-35% for the whole year.

Shrawan Shah — Dollard Capital — Analyst

Okay, okay. Okay. Thank you, sir, and all the best.

Puneet Dalmia — Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] We have a next question from the line of Rutaceae [Phonetic] from Investec, please go ahead.

Rutaceae — Investec — Analyst

Hi, so thanks for the opportunity. So, my first question was on NC3, given we have been quite proactive on the ESG side, how do we see calcite clay actually play out over the next few years? Where is that the process specific to be approvals? That’s the first question.

Puneet Dalmia — Managing Director

Yes, you’re not this LCT is still there to catch up. And at the same time, the deposits for the minds of play are at few places. So, definitely, we have been able to identify two places at the same time looking to this energy prices, because gas burning clay also needs a lot of energy, a lot of coal. So, at that, at this moment, it may not be viable for what for long run longer, it may be one of the quality, one of the quality of cement, which could be used. So it’s still I would say, to make LCP proper molar it will take four to five years.

Rutaceae — Investec — Analyst

Sure. So that’s, that’s helpful. So, my second question is specifically on the marketplace, we do hear price increases, but we are also hearing about tweaking of discount structure. So, can you provide some thoughts behind why is it happening right now and how is the company tackling this particular variable in the marketplace? Thank you.

Puneet Dalmia — Managing Director

Yes, price and discount they all play a very important role as and when we drop off any price increase in our case, we say net of discount. So that’s why when we have said that, yes sir, in one place, it says one of my LPs are 30 rupees, it is net of discount.

Rutaceae — Investec — Analyst

Alright, I said I was just trying to understand how should one look at the discount structure like I think it’s an industry wide phenomenon, wherein the companies are actually going in the right direction. So, the idea was to understand why is it happening now and how should one look at it. So, we do appreciate one should look at it on net basis, I was trying to understand the rationale and the thought processes.

Puneet Dalmia — Managing Director

I’m not been able to appreciate that what sort of discount you are talking but at the same time, what I’m saying is that when a dealer also talks about his neck landed costs than it is price dictated by the company that have discount and the same also comes to our books. There may be there may be different strategies of different cement companies to further layer the dealer so that the marketing synergies of various companies in different ways.

Rutaceae — Investec — Analyst

Sure, so, thanks. Thanks for that. I joined by the queue. Thank you.

Operator

Thank you. We have a next question from the line of Jushin Deep Chadha from Ambit Capital. Go ahead sir.

Jushin Deep Chadha — Ambit Capital — Analyst

Am I audibe? Thank you for the opportunity. My question is related to ongoing capacity expansion. So, if I remember correctly.

Operator

Sorry, can you speak louder, please?

Jushin Deep Chadha — Ambit Capital — Analyst

Yes. Is it better now?

Operator

Yes.

Jushin Deep Chadha — Ambit Capital — Analyst

So, my question is regarding the ongoing capacity expansion. In the last presentation, you have announced around 4 million ton of Greenfield expansion in Tamil Nadu in the latest presentation, although those photos are 2 million is still there, but now it is the remaining 2 million ton of Greenfield has been divided in 1 million each brownfield in Tamil Nadu on 80. So, what is the rationale behind that and also the Kappa or the expected capacity spent, you know, the capex spend remains same, despite the Greenfield now being converted to Brownfield. So, if you can shed some light on that, that would be great?

Puneet Dalmia — Managing Director

You know, isn’t it dynamic work. So, considering the dynamics of the area we had reviewed and then we have finalized vector it will be better at the moment to go for one downplayed rate then reload and one in Karapa. And they may be a little bit jaded of Quebec and bitcode there and there. Not big because that will lead to certain extra additional infrastructure, but the point is that we go on reviewing it and then now it has been finally completed.

Jushin Deep Chadha — Ambit Capital — Analyst

Okay, so, just a follow up on that, whether the reserves of limestone in Tamilnadu you know, this KCTS nine. Is that also playing a part in your decision to you know, go to AP for brownfields instead of 2 million down Greenfield in Tamil Nadu?

Puneet Dalmia — Managing Director

The same line the student would be required whether you put up running in it at the same place or outside the integrated unit or outside the business. So, limestone deposits has not played any role here.

Jushin Deep Chadha — Ambit Capital — Analyst

Okay. My second question is regarding the slider vulnerabilities, we have been hearing that the availability of flag in East is a little restricted right now. So, if you can shed some light on that, and also you have said that your blending ratio will keep on increasing month on month. So, we’ll add the current validity flag, is it possible to even increase further in future blending data. So, these are my question.

Puneet Dalmia — Managing Director

So, as far as we are concerned, we have certain attire so the flag also otherwise also, we have arrangement with the steel companies and let’s say we are not facing any problem in regards to flex. And at the same time, since our blending cement percentage is going up in South where it is mainly PPC, because when we’re using pliers, so there also we don’t find any challenge.

Jushin Deep Chadha — Ambit Capital — Analyst

Thank you so much sir. I’ll go back into the queue.

Operator

Thank you. We have a next question from the line of Sanjay Nandy from ETNA Valley Investment Private Limited. Please go ahead. One moment please. Mr. Nandy, please go ahead, sir.

Sanjay Nandy — ETNA Valley Investment Private Limited — Analyst

Yes, sir, can you please clarify on the coal inventories you’re holding as on date or what kind of price thing will be happening in the coming quarter because of the quality?

Puneet Dalmia — Managing Director

Yes, about 70 days of inventory. And dry sisters explained about $215 was the last quarter of the date. And currently, although it’s fluctuating but it’s around 195. You can expect prices to move between 195 to 205 directory. So marginally lower.

Sanjay Nandy — ETNA Valley Investment Private Limited — Analyst

Got it. Got it. Got it. Thank you. So that’s so my said sir, thank you so much.

Operator

Thank you. We have a next question from the line of Amman Agarwal from Equity Securities. Please go ahead.

Amman Agarwal — Equity Securities — Analyst

Yes, sir. Thanks for the opportunity. So you did mention that for Dalmia, we have improved the blending ratio for the South Market, which typically used to work on OPC cement. So, this one seems like it does this change, shape looks sustainable for the army or as a market as a whole?

Puneet Dalmia — Managing Director

Again, with clarity?

Amman Agarwal — Equity Securities — Analyst

Sir, the change that we are the shift we have witnessed in the southern market from regular OPCC men to the proper cement in and flies with demand, there’s a shift toward increasing blending look sustainable for the southern market?

Puneet Dalmia — Managing Director

Yes. For us it’s sustainable because our focus on retail sales are focused on this sales in the years, so it will go on going up.

Amman Agarwal — Equity Securities — Analyst

And then with this change, how does the clicker ratio for the company as a whole stand now for South Market? How is the integration improved with these changes?

Puneet Dalmia — Managing Director

Just a clicker issue?

Amman Agarwal — Equity Securities — Analyst

How’s the intervention improved for the South Market or for company as a whole with this increase in blending for South Market?

Puneet Dalmia — Managing Director

I’ll be happy to share the overall company and it is 1.71.

Amman Agarwal — Equity Securities — Analyst

1.71 which used to be around 1.4, 1.5, at least for the southern market?

Puneet Dalmia — Managing Director

For a YoY basis, it was 1.59 for the company. And now it’s 1.2 a month stage. Thank you.

Amman Agarwal — Equity Securities — Analyst

And secondly, if I can add another question there. With the upcoming renewable capacity network plans 173 megawatt, was 23 and a further 155 Mega did you plan, what’s the amount of feeling that you expect from this upcoming enable capacity?

Puneet Dalmia — Managing Director

This label capacity would give us a second saving from FY24. And definitely the delta between the two would be five to six rupees, but then it to some extent, its impact on will come on interest part. Interesting.

Amman Agarwal — Equity Securities — Analyst

Sure. Understood. Thank you. Thank you. That’s it from my side.

Operator

Thank you. We have a next question from the line of Kritiq [Phonetic] from Jeffries. Please go ahead.

Kritiq — Jeffries — Analyst

Good morning. I just have one question. On this renewable park capacity you mentioned of FY 20 for renewable power, what is the WHR we should have additional post 72 megawatts which we have talked about 23?

Puneet Dalmia — Managing Director

Additional power which has been approved that is mainly in the solar, which is around 107 megawatt and 48 megawatts of wind power.

Kritiq — Jeffries — Analyst

So, now, after we commissioned our data WHR, all our views except one will have this to get the city?

Puneet Dalmia — Managing Director

So, this we have the 72 megawatt is the peak WHR is largely which we may have for current operations, might 23.

Kritiq — Jeffries — Analyst

Yes, yes, yes.

Puneet Dalmia — Managing Director

And renewable as a percentage of total power mix will be how much by fy 23 and 24 34%.

Kritiq — Jeffries — Analyst

And this will scale up towards summer, next two years posted this expansion which were probably more than two years.

Puneet Dalmia — Managing Director

It would be around 33%.

Kritiq — Jeffries — Analyst

Sure sir. That was my only question.

Operator

Thank you. We have a next question from the line of Utom Kumash Rimal from Access Securities Limited. Please go ahead.

Utom Kumash Rimal — Access Securities Limited — Analyst

Yes. Thanks for the opportunity, sir. My question relates to EBITDA turn. This quarter we have reported reduction of 63 to 55. So our considering the demand and softening in prices, and increased realization, so what kind of return we were expecting quarter one, quarter three and quarter four? We are studying better EBITDA. This is what I can share with you. Sir, any number you can quantify if you can? [Indecipherable] but I think he was saying he’s a strong demand environment.

Operator

Sorry sir, you’re not audible.

Utom Kumash Rimal — Access Securities Limited — Analyst

So, what we’re saying is that as, as per our practice, we don’t give any guidance on a EBITDA number etc. But at the same time, you are aware that demand is becoming better price may also go up as well. Power fuel costs will not go up. So, accordingly we are saying that we are getting better picked up for Q3, Q4. Okay. And one more question with regard to underestimate, we have budget for that. So what is the current position there?

Puneet Dalmia — Managing Director

Budget then take your subject matter.

Utom Kumash Rimal — Access Securities Limited — Analyst

Okay. Okay. And if somebody comes to us so what kind of capex we will require for that?

Puneet Dalmia — Managing Director

Let just get concluded then we’ll share with you.

Utom Kumash Rimal — Access Securities Limited — Analyst

Okay. Okay sir. That’s all for me.

Puneet Dalmia — Managing Director

Thank you.

Operator

Thank you. We have a next question from the line of Gerish Chaudry from Spark Capital. Please go ahead.

Gerish Chaudry — Spark Capital — Analyst

Hi, thanks. Good morning. Firstly, if you can talk a bit on your.

Operator

Mr. Chaudry, can I request you to speak louder, please.

Gerish Chaudry — Spark Capital — Analyst

Is this better?

Puneet Dalmia — Managing Director

Yes.

Gerish Chaudry — Spark Capital — Analyst

So firstly, if you can talk a bit on your northeast operations, like how’s the capacity utilization, demand and pricing. As a follow up, you’re adding around 1.5 million from the northeast. So, that’s like a 40% increase for your capacity. So, how do you feel differently now?

Puneet Dalmia — Managing Director

I will say they got growth in northeast not only implement rebar, but overall GDP also as well, the projects which are lined up the effective which are lined up both of central government and state government. And accordingly the commitments restore this particular government is getting from industry for that interest. And also from the government for better housing, we are expecting good growth maybe for next three years it can be 14 to 18% growth in northeast into reality.

Gerish Chaudry — Spark Capital — Analyst

But what would be your current utilization for existing capacity?

Puneet Dalmia — Managing Director

So, current would be around 70%.

Gerish Chaudry — Spark Capital — Analyst

Okay. And then the second question for your Greenfield capacities which are coming up in FY 24. So, also the harder plan. So, just wondering some sense on where are we in terms of land acquisition and also ordering?

Puneet Dalmia — Managing Director

For Bihar, we are almost close to the completion of the land acquisition and the work should start as singletary already confirmed that by March 24 we got commission completely.

Gerish Chaudry — Spark Capital — Analyst

Okay. And for the cloud units on it?

Puneet Dalmia — Managing Director

Yeah, their work is already on. So, all would be completed by March 24. So whatever commitment we are making will be meaningful someplace.

Gerish Chaudry — Spark Capital — Analyst

Okay. Got it. Thank you. Thank you sir.

Puneet Dalmia — Managing Director

Thank you.

Operator

Thank you. We have a next question from the line of Girija [Phonetic] from Systematics. Please go ahead.

Girija — Systematics — Analyst

Hello, thank you for this opportunity. So, just wanted to check. There is increase in raw material cost. Is this because of flyers or any other reason?

Puneet Dalmia — Managing Director

You are right. Yes.

Girija — Systematics — Analyst

What is the price right now for flyers?

Puneet Dalmia — Managing Director

Not only because of the price of flyers, but since I shared with you that our blending percentage has gone up and that’s on that account, the overall concern of flyers slag that has gone up. And that’s why you’re seeing there will be a little bit increase in flyers prices also but then maybe it is because of higher quantity of LED material.

Girija — Systematics — Analyst

Okay, and now, like the festive season has already gone. So can we expect a volume of around 6.5 to seven and a half million done in this quarter means like Q3?

Puneet Dalmia — Managing Director

If we were to give the guidance, but then yes, it will be almost 1.5 times for the industry growth.

Girija — Systematics — Analyst

Okay. Okay. Thank you very much. Thank you, sir.

Operator

Thank you. We have a next question from the line of Sumangal Nivadia from Codec Securities. Please go ahead.

Sumangal Nivadia — Codec Securities — Analyst

Yeah, good morning. Most of the questions are answered but just a few top-level questions to Mr. Dalmia. First, I mean on our medium-term expansion plan, our long-term vision is to become a pan India player. So, the FY 22nd plan, do we start moving towards new regions or is it largely consolidation in the existing region, just directionality providers?

Puneet Dalmia — Managing Director

I think we will be examining you know, all possibilities. And, you know, we are developing one of our projects in central India, where we have a limestone mine in Madhya Pradesh, I think that project we are already started to develop. We are also looking at its early stages yet, but I think, you know, we are starting to buy land and develop projects. We are also looking at buying some land in Madhya Pradesh. So, I think our long-term vision is pan India, we are looking at organic and inorganic opportunities all across the country. And it’s hard to predict, you know, what will happen when and, but we will give you more details once we form our plan.

Operator

You’ve lost the connection of Mr. Sumangal. I would now like to hand the conference over to Mr. Dalmia, for closing comments. Over to you, sir.

Puneet Dalmia — Managing Director

Once again, thank you very much for joining us. And, you know, thank you very much for a very engaging session. As always, we thank you for your support. Thank you for your feedback and look forward to continuing to get your guidance and feedback as we build the company. We, as I said, we are very excited about India’s future and Dalmia’s future. And while the world is quite volatile and unpredictable, I think we have great conviction in India, and we are doubling down on our bets here. And I also want to say that I have deep conviction to this decade belongs to India, and the best of India and Dalmia is yet to come. Thank you very much.

Operator

[Operator Closing Remarks]