Dalmia Bharat Limited (NSE: DALBHARAT) Q4 2025 Earnings Call dated Apr. 24, 2025
Corporate Participants:
Aditi Mittal — Head Investor Relations
Puneet Dalmia — Managing Director & Chief Executive Officer
Dharmender Tuteja — Chief Financial Officer
Analysts:
Rajesh Ravi — Analyst
Devesh Agrawal — Analyst
Rahul Gupta — Analyst
Amit Murarka — Analyst
Sumangal Nevatia — Analyst
Satyadeep Jain — Analyst
Indrajit Agrawal — Analyst
Navin Sahadeo — Analyst
Shravan Shah — Analyst
Prateek Kumar — Analyst
Pathanjali Srinivasan — Analyst
Jyoti Gupta — Analyst
Jashandeep Singh — Analyst
Pulkit Patani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the earnings conference call of Dharmia Bharat Limited for the quarter and year ended 31 March 2025. Please note that this conference call will be for 60 minutes and for the duration of this conference all participant lines will be in listen only mode. This conference call is being recorded and the transcription may be put on the website of the company.
After the management’s discussion there will be an opportunity for you to ask questions. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Before I hand over the conference to the management, I would like to remind you all that certain statement made during the course of this call may not be based on historical information or facts and may be forward looking in statements.
These statements are based on the expectation and projection and may involve a number of risks and uncertainty such that the actual outcome may differ materially from suggested by such statement. On the call we have with us today Mr. Puneet Darmia, Managing Director and Chief Executive Officer Darmia Bharat Limited Mr. Dharmendra Tuteja, Chief Financial Officer Dalmia Bharat Limited and other management of the company. I would now like to hand the conference over to Ms. Aditin Mittal, head Investor Relations.
Aditi Mittal — Head Investor Relations
Thank you. And over to you Ma’ am. Good morning. Welcome to Dharmaya Bharat’s earning call for quarter four and full year FY25. Our results have been uploaded on the website along with the press release and the earnings presentation. Hope you’ve been able to download and go to through the same.
With this I will hand over the call to Mr. Darmia for his opening remarks. Thank you.
Puneet Dalmia — Managing Director & Chief Executive Officer
Thank you Aditi. Before I start I want to say that we strongly condemn the terrorist attack in Pehelgaon. Our hearts go out to the victims and their families during this very difficult time. May God give them strength and courage to face this very difficult moment. The entire country standing with them.
Now I want to get to our earnings call and results for this year and this quarter. Based on the key indicators the economic activity seems to have picked up in Q4 of FY25 following a relatively muted first half. This momentum has supported the overall economic performance for FY25 and it is believed that the full year GDP growth should be around 6.5%. While the global macro situation is facing some uncertainty India seems to be relatively better placed considering that it has its own large captive consumption base and a reasonably strong manufacturing base within the country. The likely bilateral trade agreement will also be an added cushion as per the RBI’s recent estimate, India could still achieve its projected growth of 6.5% for FY26. In this context, the cement demand is unlikely to be affected majorly by these global disruptions.
I continue to believe that India is a multi decade story and short term disruptions should not deviate the focus. Looking ahead, a sustained rise in investments, both government and private, robust job creation and improved consumption will be the key growth drivers for our country during Q4 of financial year 25. I believe that the cement demand grew at 7 to 8% on the back of increased government spending and pent up demand following the festive season in November.
As you’re aware, the first nine months of the year were relatively slow with the growth in demand being around 3 to 3.5% and the full year cement demand will be around 4 to 5% y growth. The GDP growth is projected at around 6.5% for financial year 26 and the cement demand is anticipated to grow by around 7 to 8% during the next year. Now coming to the industry supply side. Over the past three years the capacity share of the top four companies has grown from approximately 47.5% in financial year 22 to nearly 57% in financial year 25. In financial year 25 alone we witnessed 52 million tonnes of capacity changing hands. Looking ahead, I expect consolidation to continue, driven not only by acquisitions but also by organic expansion as larger players scale up capacity more rapidly than the other smaller companies.
Over the next two years the top four companies are likely to account for approximately 60% of the industry’s total capacity. In this backdrop, we have commissioned a phase one of expansion milestone of 49.5 million tons per annum with the commissioning of 2 and a half 2.4 million tons per annum grinding unit at Lanka Assam and 0.5 million tonnes grinding unit in Bihar during Q4. We have recently announced capacity expansion of 3 million tons per annum at our existing plant in Belgaon, Karnataka along with a new greenfield 3 million ton per annum grinding unit in Pune, Maharashtra which is expected to be commissioned by end of financial year 27. This 6 million tonnes per annum expansion will cater primarily to newer markets in Maharashtra in line with our vision to build a Pan India cement company coming to business performance. In the last few quarters we have been actively strengthening our dealer network and distribution channels while investing in brand building initiatives. Some of our key initiatives included the rebranding of Dalma Cement as RCS Expert, rolling out new cement packaging across all locations and enhancement of multiple reward and incentive schemes for our dealer network.
These strategic investments are being done for the future and will help us in delivering strong growth in the years to come with a healthy balance between volume and profit. Speaking for the year gone by, while our overall sales volume for financial year 25 improved by 2% on a YoY basis, if you look at the volume growth from Dalmia plants, the volume growth came in at 6% as against the industry growth of around 4 to 5%. In financial year 26, we will be working towards delivering a more consistent and sustainable profitable growth.
A quick comment on Pricing we have seen an improvement in prices this quarter. We remain reasonably optimistic about the stickiness of the recent price hikes and believe that the absolute level of consolidation should eventually aid in better pricing. On the cost side, Dalmaya is one of the lowest cost cement producers and we are working to deepen this position further in order to reduce our cost by 150 to 200 rupees per tonne over the next two years period.
We are working on different strategies including consuming more renewable energy, improving our heat and power consumption rates and optimizing our logistics. During the current year we should be able to realize around half of the above efficiency gains. Before I hand over the call to Dharmender, I want to mention that as a part of our commitment to continuously strengthen workplace safety and foster a safer working environment, we are undertaking a Safety Excellence program across our operations.
This initiative is aimed to further enhance the effectiveness of our current safety SOPs, reduce unsafe practices and embed a stronger safety culture across all sites. Ensuring the safety and well being of our employees remains a top priority and we are fully committed to continuously improving the quality of life at our plants. Thank you. And over to you Dharmin.
Dharmender Tuteja — Chief Financial Officer
Thank you. Let me give an overview of our performance during the quarter. Our sales volumes degrew by 3% YoY to 8.6 million tonnes. While if you look at the sales from Dagnaya plants, that is excluding the tolling volumes from JP. Last year our volumes grew 4% yoy in Q4FY25 on a full year basis, our volumes grew by 6% yoy overall and 6% yoy should be considered sales for T plants only. 9.5% y to Rupees 4096 crores in Q4 due to softening of cement prices on a yy basis lower volumes. However on QQ basis our revenues improved by 8.6% supported by both volume and price increases for the full year. Softness in prices during FY25 led to our revenues declining by 4.8% to rupees 13,980 crores. As Puneetji mentioned, we have taken a lot of initiatives for improving the quality of sales for our company. During the quarter our premium product mix improved to 24% from 21% in Q4FY24 and the trade mix improved to 67% from 65% last year.
Moving on to the cost line items, our raw material cost per ton of Cement production declined by 4% YoY to rupees 743 primarily due to reduction in fly ash and limestone grazing costs. Going forward, raw material cost will see an additional impact of tax on minerals as has been imposed by the state in Tamil Nadu. This is the notification. The impact is rupees 160 per ton on the limestone that is mined in the state of Tamil Nadu and which translates to about rupees 130 crores annually for the company. Power and fuel cost per tonne of cement Production also declined by 7% YoY during the quarter to Rupees 945 per ton primarily due to decline in fuel consumption cost from $114 per tonne in Q4FY24 to about $95 per tonne in this quarter and also improvement in RE from 34% to 39% during the quarter. The blended fuel cost during the quarter declined to rupees 1.30 on kcal basis. Our CC ratio also improved from 1.67 times in Q4FY24 to 1.69 times in Q4FY25. Fuel prices have started inching up in the last couple of months while the Q4 consumption rate stood at $95 per tonne. The spot prices are very volatile amidst the ongoing global macroeconomic uncertainties.
We continue to add renewable power capacity through both captive and good captive methods. During the quarter we have commissioned 2.2 megawatt of solar power capacity at Lanka Assam. Besides this, 13 megawatt of RE capacity is also commissioned under group captive arrangement during the quarter. This takes our total operational re capacity to 267megawatt. We expect to reach 595megawatt of operational RE capacity by end of FY26. Coming to the logistic cost during the quarter, our logistic cost declined by about 2% YoY to rupees 1135 rupees per tonne. This is due to increase in direct dispatch from 56% in Q4FY24 to 61% in Q4FY25 and reduction in lead distance from 289 km in Q4FY24 to 277 km in the preceding quarter. However, some benefit of it is offset by higher amount of clinker movement to the northeast region due to an unplanned shutdown.
During the quarter our EBITDA improved by 21% YY to Rupees 793 crores as the impact of lower prices and volumes was offset by better cost management. The EBITDA works out to Rs. 926 on per term basis. This translated to an EBITDA margin expansion of 420 basis points on a yoy basis to 19.4% in Q4FY25 on a full year basis. EBITDA declined by 9% yy to rupees 2,407 crores which is rupees 820 per ton. Our profit after tax stands at rupees 699 crores during the quarter against rupees 853 crores in FY24. During the quarter we accrued rupees 99 crores in incentives with collections totaling rupees 119 crores. Total accrual during FY25 was rupees 336 crores and collections against the same one about rupees 307 crores.
During FY26 we expect total incentives accruals will be about rupees 300 crores. Incentive outstanding at the end of the year was rupees 743 crores. Depreciation for the quarter declined by 4% bio y and 14% QOPU to rupees 314 crores primarily due to the full amortization of goodwill last quarter which was previously recorded at rupees 51 crores per quarter. The full year depreciation for FY26 is expected to be around rupees 1300 crores. Coming to the ongoing projects we have commissioned our 2.4 million tons grinding unit in Northeast. This makes us the largest cement producer in the fast growing Northeast region. The clinker unit at Tumrangshu is also near completion and expected to commission in quarter two of FY26. We have also commissioned 0.5 million ton of grinding capacity at Bihar which is lucrative market in terms of profitability. With this our closing capacity now stands at 49.5 million tonnes.
During the year we have incurred capex of approximately rupees 2,664 crores with majority of being spent on the before mentioned projects. Besides this rupees 98 crore investment has been done in equity SPVs of group captive RE projects. As Puneeji mentioned, we have embarked on the next phase of expansion.
With the announcement of Velgam and Pune expansion of 3 million ton each. We expect FY26 capex to be about rupees 3500 crores which will largely be spent on expansion at Belga, Pune, Clinker line at Umrangshu and some land for the future projects. Besides some cost efficiency investments and maintenance Capex, we closed the year FY25 with gross debt at rupees 5279 crores. That is an increase of rupees 629 crores as compared to March 24. Net debt as on 31st March was rupees 716 crores. And the resultant net debt to ETA is at 0.3 times. I also wanted to share an update on one of our legal matters. In April 2025, EG has issued a provisional attachment order amounting to rupees 793 crores emanates from a case originally registered by the CBI in 2011 which involves certain allegations relating to companies investments in Bharti Cement.
We would like to clarify that this order does not impact the company’s running operations. We will take appropriate legal steps to defend our position. In our opinion and basis legal advice, no offense is made out against ECBL and we do not expect adverse outcome for the case. Lastly, in line with the capital allocation framework, the board has proposed a final dividend of Rupees five per share which is subject to the approval of the shareholder in the ensuing AGM. This is in addition to the interim dividend of Rupees 4 per share. A total dividend declared for the year including interim is Rupees nine per share.
With this now I open the floor for questions. Thank you very much.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Rajesh Ravi
### Hi sir. Good morning. Am I audible? Yes sir. First question pertains to first on the housekeeping. Could you share what was a perky locale costing in Q4 and the blended cement Blended cement mix in this quarter?
Dharmender Tuteja
Yeah per KCL cost last quarter was 1.30 and the blended percentage is 84.3%. 84%, 84%
Rajesh Ravi
And so this Petco prices which have gone up recently what sort of impact you’re looking at? What is the Petco share in the fuel mix?
Dharmender Tuteja
See the world economic scenario is in front of everybody Nobody is aware of how the economy impact will be there because the tariff today is up today, tomorrow is down so with these changes nobody can predict what scenario will be there so there could be some upward price increase but it’s difficult to gauge as of now
Rajesh Ravi
That’s true. This is the current price increase in the December, January, February, March we have seen Petco prices going up by 20% so what sort of impact because so first what is the Petco share in the mix? See the prices have gone up and we expect some marginal increase in the per kcal cost blended cost which I had mentioned But I think difficult to quantify the impact as of now because the situation remains volatile Every week prices are going up or down.
Operator
Does that answer your question?
Rajesh Ravi
Hello, Am I audible? Sorry. Yes, I’m seeing the group captive power which you have announced what would be the landed cost from the group captive power cost?
Dharmender Tuteja
It varies from about three to four rupees depending on the areas of operation and depending on the levies of these respective states.
Rajesh Ravi
Okay and lastly in terms of your volume growth outlook any guidance for FY26 what sort of number you’re looking at? Given that you’re looking at industry to grow to 7 to 8%
Dharmender Tuteja
We will be putting our house in order and I think we expect to give a good performance But I think doesn’t make sense to give it hard number which in the past we have seen that situation but focus will remain how to ensure balance of profitability and the volume growth which covered in his opening remarks
Rajesh Ravi
Okay, last question on the extension plans you have announced the northeast you will be completing in Q2 and you have recently announced 3,500crore for the south expansions so for the FY26 27 together what is the total capex outgo one should look at.
Dharmender Tuteja
The total range I have given is 3500crores which should take care of all majority growth
Rajesh Ravi
Okay, full year basis FY26 3500 crores.
Dharmender Tuteja
Yes
Rajesh Ravi
Okay this tax notice which you have received for the northwest plants how do you look at them?
Dharmender Tuteja
Yeah, Just not good in law. So I think it should get crashed in due course.
Aditi Mittal
Great. That’s all from my end. I’ll come back into you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow up question, I would request you to rejoin the queue. The next question is from the line of Devesh Agrawal from IIFL Capital. Please go ahead.
Devesh Agrawal
Good morning everyone and thank you for the opportunity. Sir, my first question is basically on pricing. So on a QQ basis basis my calculation, I think we had seen a lower increase in the prices versus what we were seeing for the regions. So could you share how much was your pure cement realization growth on a Q OQ basis and how did this stack up versus the regional hikes that you have seen in your core region?
Dharmender Tuteja
See, the prices have marginally improved in eastern region and while in the south they remain low on an average. I think they remain flattish and maybe very very minor uptick. But we are hopeful that in the current quarter prices should improve. But of course we remain cautiously optimistic and situation remains volatile on the prices.
Devesh Agrawal
And what has been the Current price increase vs 4Q average.
Dharmender Tuteja
Varies from region to region but it’s too early to say it has increased by about 10 to 15 rupees on average. But whether they’ll stick or not we need to see. I think the trade channel checks every month are think that will give a better picture because we’ll discover it month to month.
Devesh Agrawal
All right. And again you mentioned adjusting for JP trolling volumes. Your volume growth was 4% on a YoY basis. This again seems to be lower than the industry volume growth. So is it because of the regional mix that your volume growth is lower and or is it that you have lost market share in your core markets?
Dharmender Tuteja
I think quarter to quarter things change a little bit. But if I look at the whole year our growth has been 6% as against the industry growth rate of 4 to 5%.
Devesh Agrawal
Right sir. And sir, finally on this, what would be your total clinical capacity at the end of FY25? How much are you targeting to add in FY26 and how do you see the ramp up in your Northeast recently commissioned capacity?
Aditi Mittal
Right now we are at 23.5 and we’ve closed the year at 23.5. Now 3.6 will get commission in Northeast during quarter two of FY26. So then next year we’ll close at 23.5 plus 3.6 which is 27.1
Devesh Agrawal
And the ramp up in the northeast front?
Aditi Mittal
So the grinding unit just got commissioned this quarter, the quarter that has just gone by. So I think. And northeast is a great market for us. We’re one of the leading producers of cement and the largest cement company now. So I think we’ll be able to ramp it up pretty comfortably.
Devesh Agrawal
Okay, thank you.
Operator
Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Rahul Gupta
Hi. Thank you for taking my question. Two questions. I know you don’t want to discuss what ailed volumes growth during the quarter. But can you please help us understand from the context of how to look over the next couple of quarters. Number one. Number two, now that you are moving away from guiding on volumes for full year, how should we look at earnings trajectory on back of let’s say 75 to 100 rupees cost improvement that you have guided for next year? Thank you.
Dharmender Tuteja
See, the reason for not giving a firm guidance on the volume for the next year was that we’ll try to balance the objectives of the growth as well as the profitability. And of course considering the backdrop of the industry volume growth and the leading players growth, maybe you can have your own estimate about our volume growth and in terms of margins, of course, 75 rupees guidance we have given in terms of the cost reduction and whatever price improvement comes that can be added on top.
Rahul Gupta
Thank you. And what about any specific reasons of relatively weaker volumes during the quarter? I’m asking this question more from the context of if consolidation is the theme for the near future then how should we think about your volumes? Thank you.
Dharmender Tuteja
As Puneeji said, that quarter to quarter situation may change but overall we should be able to show a respectable growth in line with or better than the industry growth which remains volatile.
Rahul Gupta
Great, thanks. These answer my questions. Thank you.
Operator
Thank you. The next question is from the line of Amit Morarka from Axis Capital. Please go ahead.
Amit Murarka
Yeah. Hi. Thanks for the opportunity. So my first question was on volume again. But actually I had a different take on volume because I see that your volume has grown. 28q averages the same thing last year, Q4 as well. So like is it, is it that there was some volume push in the quarter and I also see that your realization is flat poq whereas the east 3% price hike. I just wanted to understand why was realization flat and was there some body push that was done in the quarter?
Dharmender Tuteja
Realizations have been flat because the markets which you operate in south practically didn’t see any price Increase rather some erosion also happened. But whether any volume push was there, I don’t think it was at the cost of profitability because the margins have improved. Unlike the previous year, same quarter we had increased the volumes in significantly but it was at the cost of the margins. So this time you can see that the quality of sales has also been kept in the view.
Amit Murarka
No, but even this time the realization is flat but east for decent price hike actually in March I believe like end of February, early March. But that’s not reflecting in the realization. And the margin is improved largely I think because of the overheads and operating leverage gains. So I just wanted to understand why was realization flat basically? Q of you?
Dharmender Tuteja
Yeah, the prices have improved in north region where we are not present and east.
Amit Murarka
Even in east.
Dharmender Tuteja
Yeah, but it was negated by the price drops in the south. Also south had very very competitive environment during the quarter. So overall practically it was a flattish in terms of price rise.
Amit Murarka
Got it. And the Capex of 3500 that you mentioned, would you be able to give some breakup as to how much of a bit will go to Northeast and how much to Belgao and other projects?
Dharmender Tuteja
I think consulted number I’ve given so it’s majority towards the growth capex which is Belgium as well as Northeast breakup? I would like not like to give.
Amit Murarka
Oh for sure. And would you stick with your guidance of coming coming back with the plan, the bigger capacity expansion plans and like June, July is what you had been mentioned. So.
Dharmender Tuteja
Yes, definitely. So next quarter will fully detail out our plan of capacity creation till FY28 along with the balance sheet impact of that.
Amit Murarka
Sure. Thank you very much. I’ll come back. Thank you.
Operator
The next question is from the line of Sumangal Nivatia from Kotak Securities. Please go ahead.
Sumangal Nevatia
Yeah, good morning everyone. Thanks for the time. The first question is on on the pnl, the other expense on a burden basis has dropped quite significantly. So anything to note here or any one off right back or anything?
Dharmender Tuteja
No. So Mangal, basically it is on account of the operating leverage as the volume jumped up by about 28%. So this is reflected in the Burton drop. And of course Q2 and Q3 are normally the quarters where some shutdowns take place and the cost goes up. And Q4 is normally you don’t have the shutdown so naturally the cost comes down.
Sumangal Nevatia
Understood, Understood. Second question is overall on the next two years cost saving which we are spelling out at around one hundred fifty two hundred rupees, is it possible to share what Is the breakup, I mean how much is led by Ari and few other heads.
Dharmender Tuteja
Sorry Sumangal, can you repeat that question I missed initially?
Sumangal Nevatia
Yeah. So my question is on the cost efficiency and cost saving which we are guiding at around 200 rupees for ton over the next two years. Is it possible to share some breakup in terms of how much is RE and other heads?
Dharmender Tuteja
In my earlier call I had mentioned that roughly 50. 50 you can assume from VC and the logistic cost. There are multiple variables working at play. Of course RE will be one of them but I think specific numbers are not important right now.
Sumangal Nevatia
Okay, okay. And half of it is what we are expecting to realize in FY26 itself. Right?
Dharmender Tuteja
Yeah.
Sumangal Nevatia
Okay, understand. And just one last question on overall utilizations. So if you see in the last few years our utilizations have dropped from 70 to currently around 60 odd percent. So do we, I mean just strategically do we have an eye on this matrix as well? I mean going forward our expansions, I mean are we looking to tie it up with, I mean utilization then eventually getting into some sweet spot of 70, 75% levels or should we expect this level of utilization and maybe growth and expansions to kind of tie up?
Puneet Dalmia
Sumangal, I’ve said this earlier also. I think you know, we will focus on capacity creation where we think our utilizations are higher and we will balance profitability and volume growth as we go forward market by market. The situation is very different and we will take a, you know, balanced view in every market depending upon what our immediate objectives are and what our long term objectives are. So I think, you know, there is no sense in creating capacity where you already have unsold capacity.
I think we are very clear about that. You know, we will create capacity where we think we have a cost competitive position and where we have a better cost structure to serve the market and we have a more reliable service that we can provide to our customers. So I think given all of this you will see a very balanced approach in terms of capacity creation and very balanced approach in terms of profitability and volume growth.
Sumangal Nevatia
Got it. That’s very helpful. Thank you and all the rest of the team.
Operator
Thank you. The next question is from the line of Satya Deep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi, thank you. First question on the ED investigation. Just wanted to understand, I think from the commentary also it’s clear what Dalmia standards.
We’ve also heard the investigation is going on for a long time. When you look at the investment, just want to understand, get more clarity on the stand there was an investment in Gaguram Cement. What was the rationale that you are pitching for that investment as an overall rationale and where we are in the process because the CBI hearing is going on for a long time. Where do you think we are and how long will it take? Just from a risk standpoint, just want to understand more granular details on this.
Puneet Dalmia
I think we have a very simple position on this. We had invested 95 crores in Raghuram Cement which is now Bharti Cement and we sold our shares at 145crores to a French company called Vikat and we made a 50 crore profit. So I think we are very clear based on the legal opinions and based on our own understanding of the law that you know there is no criminal offence made against the company. And you know these things take time in India. This is a 14 year old case and you know I’m unable to say how long this is going to take but you know this is even today the process in the CBI court, you know, has taken a very long time and it continues to be go on a, you know, slow pace. So it’s hard for me to give a timeline. But I think you know we are very clear that these are all bonafide transactions and there is just no, no case and offense against the company.
Satyadeep Jain
And on this provisional attachment, was this Karappa mine? Is this Karappa mine also a part of your 75 million expansion that you’re looking at? And does this provisional attachment of land limit your borrowing? Obviously against that land and also any future limestone expansion then this is settlement
Puneet Dalmia
Based on the overall size of the balance sheet. This number is very minuscule. So I don’t think it’s going to affect the operations of the company in any manner.
Satyadeep Jain
That color pack expansion could still happen. If you’re looking at 75 million ton expansion that you announce. So thanks for the clarification. Secondly, on the just in the context of all these expansion you’re looking at there have been too many management changes in the recent one year. Do you think now given all these changes which for us also it becomes difficult to track. I’m not sure compared to the history this is more attrition than you personally seen. But now you think you have the entire team in place as you embark on this entire expansion plan that you’re looking at. And what would you look to do to have the team in place through this entire journey?
Puneet Dalmia
I think I have said this earlier also and I will repeat it on this call. We want to Build a young team. We want to build a team which is grown from within. In the long term, our leadership has to come from within. And with these two objectives, I think we are trying to prepare a succession plan for all critical roles in the company. The second thing is we are also looking at where we can improve efficiency and reduce layers in the company so that we can become more agile and more efficient in terms of our speed of decision making and quality of decision making. So I think based on this, you know, some changes have been made partly due to, you know, reducing the number of layers and partly also because of succession planning. We will continue to go on this path as a normal company. I don’t think these changes are anything major and I think they, you know, they are not going to impact the company in any way whatsoever, if at all. We are stronger, leaner and more efficient.
Satyadeep Jain
Okay, thank you so much. Thank you.
Operator
The next question is from the line of Indrajeet Agriwal from clsj. Please go ahead.
Indrajit Agrawal
Hi. Most of my questions are answered. I have two questions. First, on the Belga or Pune expansion, what is the limestone availability and visibility, visibility over there, the kind of quality and life of limestone that we have?
Puneet Dalmia
I think I have already said, you know, that we have sufficient limestone. And I think we have, we are serving a market which we think is very attractive. We are serving the western part of the country where a lot of, you know, investments and growth is there. You know, it’s a place where we are underrepresented. It’s a place where we have a very cost competitive position. And we think, you know, this is a project which will deliver, you know, very good returns in the years to come. But I cannot comment on the limestone reserves individually planned by Plant. All I can say is we have sufficient limestone to support this expansion and more.
Indrajit Agrawal
Sure, thank you. Secondly, even if you can’t give like absolute numbers, can you broadly split the growth trajectory in each of the three geographies that you are in for fourth quarter and also for FY25?
Puneet Dalmia
No, I will not be able to do that. I’m sorry, we’ve said that we don’t give breakup by geography
Indrajit Agrawal
I’m asking more like a trend, like would you say that one region has grown much faster or it was broad based across regions?
Puneet Dalmia
I think we will not be able to share that.
Indrajit Agrawal
Okay. Lastly, on tax rate, how should we look at both P and L tax and cash tax for FY26?
Dharmender Tuteja
On the cash tax next year also, you can expect a, I think high single digit tax rate. After that it should be normal tax rates.
Indrajit Agrawal
Sure. Thank you. That’s all from the side. Thank you.
Operator
The next question is from the line of Naveen Seradev from ICICI Securities. Please go ahead.
Navin Sahadeo
Yeah, thank you for the opportunity. I had two questions for Puneet Ji. So Puneet Ji, until the fifth quarter, every single time in your opening comments you always gave a little bit of a cautious outlook on the pricing, even if there is some improvement. But you said that major upside is, is capped because of increased competitive intensity.
And that was a pretty consistent commentary in the past couple of quarters. But in your comments now, you did mention about optimism on the stickiness of this price. So just wanted to understand is it that are you seeing the consolidation actually play out or is it so that the price has gone so low and then the middle tax just comes in which helps the overall pricing momentum just to improve a little bit. How should one look at it?
Puneet Dalmia
I think it’s a great question. You know, I think both the points that you mentioned, you know, are impacting this in some way or form. I think in the southern region prices had gone to a, you know, level which was unsustainable for many players and it had remained there for a, you know, fairly long, long period of time of almost 12 to 15 months. 12 months actually. And I think the second thing is that during this period of pain some consolidation also happened. So I think it’s a combination of both factors.
Prices were at a unsustainably low level and also consolidation happened during this time. So combination of both these factors has caused a price increase in south in April. You know, whether it will sustain or not. I am reasonably optimistic right now that, you know, it may be the same low level which we have experienced in the last 12 months. May not, may not remain, but you know, it will be at a slightly higher level. Now how high and for how long is hard for me to comment. That’s why I’m a little bit more optimistic. But I’m also cautious in terms of where it can go because there is still oversupply in the region and there is. Andhra Pradesh is still quite fragmented.
Navin Sahadeo
It is definitely more consolidated, but still the level of fragmentation is quite high. Tamil Nadu and Kerala consolidation level has become very high now, but Andhra Pradesh is still, Andhra Pradesh in Telangana are still quite fragmented. That’s really, really helpful. Thank you. And my second question then was on your capacity expansion plan. So of course in February you announced 6 million ton expansion. But here the first line itself of that press release says towards meeting the 75 MTP objective for 28 which also means another 20 million ton of capacity even if it’s a mix of Greenfield Brownfield at $85 comes to almost 14,000 crore of additional capex. So my only request on this question is how much should investors be prepared for debt to come on or is it also a function of overall profitability being at higher level to meet this objective? Can it be a little fluid subject to profitability? How should look, how should one look at this overall capex that is planned from a three year perspective?
Puneet Dalmia
I request if you can just hold on for one more quarter for this, you know I can only say one thing that you know we will be, you know while we want to grow we also want to be prudent. We will look at the, you know, computer landscape of the industry. We will look at our, you know, our own ability and cost competitiveness in markets that you know we are present in. We will also look at diversification to new geographies. So we have to keep some multiple factors in mind before we can give you a very clear answer on this. And I know you asked a very specific question and I’m giving a slightly more generic answer but you know please wait for one more quarter. I can only say that we will be prudent and you know we will grow with prudence.
Navin Sahadeo
Yeah and just related to this if IEX related monetization I understand net debt is fairly comfortable now but that is mark to market the IEX value. So I hope that clarity over monetization of this IE expect also will come in by next quarter.
Puneet Dalmia
Well, I think we have already said that it’s a short term investment that we are holding and we are going to monetize it soon. But it’s a listed company so I cannot give a exact time frame but this is something which is I’ve committed to the markets and we will stand by our commitment.
Operator
Thank you. Thank you. Ladies and gentlemen, please limit your question to one per participant. If you have a follow up question I would request you to rejoin the queue. The next question is from the line of Shavan Shah from Daulat Capital. Please go ahead.
Shravan Shah
Hi sir, sir, couple of questions, just a first clarity when we say that we are looking at our 75 to maybe 100 odd rupees reduction this year and next year. So, combine put together kind of a 200, 150, 200 rupees cost reduction. So this is from FY25 average or from Q4FY25 because Q4FY25 itself is close to 80 to 90 rupees lower versus the FR25. So from FY25 if you are looking at the reduction then actually there is no reduction from current fourth quarter number.
Dharmender Tuteja
Yeah, this we had called in the July call. So basically you can consider Q1 of FY25 as the base.
Shravan Shah
Q1. FY25. Okay. Q1 F25 would be the base. Okay, got it. Okay. But there also the number is the current quarter number itself is. Is a kind of a 125 rupees lower versus that. So that means even if we reduce by 75 it would be still higher than the current quarter Q4 cost. So that’s the way one should look at.
Okay, got it. Second. Hello.
Operator
Yes sir. Yeah, please go ahead.
Shravan Shah
Yeah, yeah. Sir, is it possible also to share just a data point on the road rail mix and the blending ratio which is at 84 odd percent. But in the April presentation we said that we will be looking at 100% blended cement by FY by 2026. So does that mean FY 26 or calendar year 2026? And if that is the case how do one look at in terms of whatever the OPC we have currently 15 16% so obviously it should be on the higher price. So if it goes away how one can look at in terms of the kind of pricing impact for us.
Dharmender Tuteja
Directionally we would like to move towards 100% blended. But of course these things may not be possible to achieve in one year time frame. But actually our commitment remains. So we’ll try to see market by market balancing the growth and the profitability point of view and try to move towards the direction. But it can’t be hard coded number which has to be achieved quarter by quarter or year by year. Another aspect you asked about the road mix it is 84%.
Shravan Shah
84%. And sir, is it possible to. To share the current the whatever. I understand the next expansion we will tell in the next quarter but whatever the given is 3500 crore capex for FY26 for FY27 would be how much based on the current things. Obviously it will increase once we announce the next expansion.
Dharmender Tuteja
Yeah, better to wait for one more quarter. You’ll get complete clarity on that.
Shravan Shah
But our stand still will remain that net debt EBITDA will not cross two times to reach a 75 million ton.
Dharmender Tuteja
Yes please.
Shravan Shah
Yeah, got it.
Operator
Thank you. Thank you. The next question is from the line of Pratik Kumar from Jeffreys Group. Please go Ahead.
Prateek Kumar
Yeah. Hi. Good morning sir. My first question is on Tamil Nadu Lime Mining tax. What is the status there? Has it got implemented or. We heard that there is some lobbying for reduction of that tax. Can you update us on the same?
Dharmender Tuteja
Yeah. This has become operative from first week of April and of course industry would like the rates to be much much lower. This rate is quite high. But for the timing I think best for us and you to assume that this stays.
Prateek Kumar
Okay. And on clarification on the pricing, you said 10 to 15 rupees price hike. We understand the price hike in south are much higher by 4050 rupees. So are you talking about other regions of price?
Dharmender Tuteja
What I’ve given is on average basis other regions have not seen that kind of price hikes.
Prateek Kumar
Okay. Lastly on jpa you’re bidding for JPA assets under the new consortium that includes like a whole host of other businesses. What is the idea about bidding such forbidding such businesses?
Dharmender Tuteja
We have given our expression of interest and after thorough review of the position we’ll take a prudent call on that.
Operator
I would request you to rejoin the queue for your follow up question. Thank you. The next question is from the line of Patanjali Srinivasan from Sundaram Mutual fund. Please go ahead.
Pathanjali Srinivasan
Thank you for the opportunity. I just wanted to get something.
Operator
Sorry to interrupt sir. I will request you to please use your handset.
Pathanjali Srinivasan
Yeah, I wanted to know what the incentives for the quarter was and also what about the receivables for incentives? How has it been moving the current year?
Dharmender Tuteja
So current year accrual as I mentioned was about 99 crore. And next year we are expecting about 300 crores. So receivable 743 crore is the current year and it should remain around the same level or maybe slightly go up because the current year receivables may take slightly longer to realize.
Pathanjali Srinivasan
So on average this upgrade you’re saying for the current quarter is 99 crores. Is it
Dharmender Tuteja
99 crores For the Q4 which just went by. These are about. And next full year is about 300 crores.
Pathanjali Srinivasan
And generally like share of profits, if you look at subsidies or grants it seems to be fairly high. So will this be recurring for the long term or will a large part of this go away in a few years down the line? Could you give some color on this?
Dharmender Tuteja
Yeah. We are operating in the northeast region where this is likely to continue for a very long period because it’s for 15 to 20 years time frame and Bihar is The one which will expire in the current year. But for the small unit which you added 0.5 million, that will continue for another five years. Also will go up for about 15 years. And shorthand also will continue for a couple of years. I think next couple of years we don’t foresee any reduction on this.
Pathanjali Srinivasan
Okay. And this one last question, sir. So this capacity expansion that we announced for grinding unit in Pune and expansion in Delhi. How are we planning to service the grinding Pune? Because the lead distance is almost 400km.
Dharmender Tuteja
It’ll be by rail.
Operator
The next question is from the line of Jyoti Gupta from Nirmal Bank Securities Private Limited. Please go ahead.
Jyoti Gupta
Thank you so much for the opportunity. I’ll start with as I understand the industry should grow by 7% YoY this year. This quarter however we have seen a decline On a YOY basis realizations will be flat. However, the players in the regions in the east have actually benefited from the increase in realizations while we have not. Third is we have moved Clinker, as you have already mentioned in the commentary. However, your overall cost seems to have declined. Now how should we see. And of course the benefit of increasing price of the east will be reflective with couple of companies. And in the first quarter itself we’ve seen almost like 60 rupees gross level increase in price in the south region with a net impact of at least 30 absorbed already. How should we see Darnia’s performance in the first quarter of FY26? And second is on the limestone reserve. I believe Rajanpur has been almost like a 70 year old reserve mine. Is it not expected to exhaust by 32 or something? Any comments on that please?
Puneet Dalmia
I think let me take the comment on limestone reserves first. You know, I’ve already said in many statements during the earlier call that we have sufficient reserves in Raj Kingpur. You know, there was in our own mining lease area there was some land that we had to buy which is in process and which is going to get concluded. A large part of it will get concluded within this year. So you know we see no challenge in reserves over there. The second part is that while we have already mentioned that there was some price increase in east, but there was erosion of prices in south which kept our realizations flat for the quarter. And I think in the coming quarter currently in the first fortnight we have seen a significant increase in south which could be in the range of 30 to 40 rupees. But on a blended basis is at about 10 to 15 rupees as Harminder has said. So if these prices sustained profitability should be better. And I have already said that we are going to balance our volume and profitability targets and estimates market by market. And in terms of quarterly guidance, I apologize, we will not give any quarterly guidance.
Jyoti Gupta
Thank you. Can I just get in terms of price and regional breakup between north and south because that should have actually offset decline in price in the South. And at the same time I would also like to understand, I mean the kind of volume decline realization reliance the cost structure has actually declined quite significantly and we paid only 6% tax in this quarter compared to 20% in the last quarter. Any specific reason for that?
Dharmender Tuteja
So if you see there are prepaid adjustments for the tax write backs so that you can consider as a one off items. So if you remove that, our effective tax rate is still 24%. Our cash tax rate remains low because we have the brought forward losses from the past acquisitions.
Jyoti Gupta
Thank you for now but I have many questions on Dan me. I hope to get all of them answered in the future. Thank you. Thank you for your time.
Operator
Thank you. The next question is from the line of Jashindeep Singh from Nomura. Please go ahead.
Jashandeep Singh
Hello. Hi. Thank you for the opportunity. Most of the questions have been, you know, but just wanted to, I would please use. Is my. Am I audible now? Is it better? Just wanted to, you know, concentrate on the northeast region. So you know, a lot of investment has gone from Dalmia to Northeast and I understand this is a very lucrative region for Dalmia. But I just wanted to understand what’s the, you know, if you can give me a rough market size of that Northeast and what’s the growth trajectory you believe the market will see? Because if I’m not wrong, you know, the top two players hold more than, you know, 50% of the market share. Just wanted to understand is Northeast is going on the same trajectory as east where you know, capacity growth might outpace demand and hence, you know, there will be pressure on margins. So if I can just get the management view on that, that would be great.
Dharmender Tuteja
Not getting the regional data. But all I can say is that Northeast is growing faster than the Indian average and that is likely to continue.
Jashandeep Singh
Sir, I understand, I’m just asking about the market and not darn near specifically. But even if you say north is growing at a faster rate at again demand is going at a faster rate in India, its capacity growth is also going at a faster rate in India. So you know, I just want to understand that. Do you See, the margins will sustain for next couple of years despite all the capacity that’s coming here.
Puneet Dalmia
Look, when we make capex decisions, we take a very long term view to take capex to make investments because it takes around two to two and a half years to create new capacity. I think the way we look at the northeast region is as follows. I think one, from a demand point perspective, Indian government is very focused on, you know, investing in the northeast region. And in this last decade the number of visits by the prime minister and also the union ministers has been pretty phenomenal.
Over there there is huge commitment to creating infrastructure. And even in Assam, you know, there is a very, very aggressive plan to increase industrialization and you know, know, make huge investments in the economy. This was highlighted in the Advantage Assam summit recently where a lot of investors have committed significant capital. Other semiconductor facilities being built. We are building the largest, you know, cement plant over there. We’ve already almost completed. So I think huge investments are happening there in infrastructure as well as industrialization. So we think demand growth here is going to be very strong. Point number one.
Point number two, from a supply side perspective, it’s a fairly consolidated market and you know, it’s a market where people who have local presence have ability to serve the market in a more reliable manner. So I think from a market structure point of view also we find this market quite attractive. Now having said this, whenever new capacity comes, there could be turbulence in terms of prices and capacity comes in steps and demand grows over time. So there could be a little bit of, you know, turbulence whenever new capacity gets commissioned in any market. And we, I personally think that we make investments from a long-term perspective. And long term we find this market quite an attractive market to be. That’s all I can say.
Jashandeep Singh
I completely understand. Thank you so much for such an elaborate answer. Just if I can squeeze in one more, what will be the average utilization for that region? If you can, you know, on the market basis? Not if not particularly.
Puneet Dalmia
We don’t share region by region, you know.
Jashandeep Singh
Not for D, but for the, you know, market itself. You can give us a sense that would be great.
Aditi Mittal
So, the utilization for the region should be in the ballpark range of about 65% because the market is a 14 to 15 million ton of volume that it sees.
Jashandeep Singh
Thank you so much for this. Thank you so much. And I’ll join back with you. Thank you.
Operator
Thank you. The last question is from the line of Pulkit Patani from Goldman Sachs. Please go ahead.
Pulkit Patani
So my questions are already answered. Thank you.
Operator
Thank you. Ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. Punit Dalmia for closing comments.
Puneet Dalmia
I once again want to express my deepest condolences for the victim of Pehlgaon and pray for peace and strength in their families. I once again thank you all for your interest in Dalmia. And you know we will see you again next fall. Thank you very much.
Operator
Thank you on behalf of Dalmia Bharat. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.