Dalmia Bharat Limited (NSE:DALBHARAT) Q4 FY23 Earnings Concall dated Apr. 26, 2023.
Corporate Participants:
Aditi Mittal — Head – Investor Relations
Puneet Dalmia — Managing Director
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Dharmender Tuteja — Chief Financial Officer
Rajiv Bansal — President and Chief Transformation Officer
Analysts:
Indrajit Agarwal — CLSA — Analyst
Sumangal Nevatia — Kotak Securities — Analyst
Pinakin Parekh — JPMorgan — Analyst
Prateek Kumar — Jefferies — Analyst
Rajesh Kumar Ravi — HDFC Securities — Analyst
Unidentified Participant — — Analyst
Pulkit Patni — Goldman Sachs — Analyst
Ritesh Shah — Investec Capital — Analyst
Shravan Shah — Dolat Capital — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the earnings conference call of Dalmia Bharat Limited for the quarter and year-ended 31st March, 2023. Please note that this conference call will be for 60 minutes, and for the duration of this conference call, all participant lines will be in the listen-only mode. This conference call is being recorded, and the transcript maybe put on the website of the Company.
After the management discussion, there is an opportunity for you to ask questions. [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 may be forward-looking statements. These statements are based on the expectations and projections, and may involve a number of risks and uncertainties such that the actual outcome may differ materially from those suggested by such statements.
On the call we have with us Mr. Puneet Dalmia, Managing Director of Dalmia Bharat Limited; Mr. Mahendra Singhi, Managing Director and CEO, Dalmia Cement Bharat Limited; Mr. Dharmender Tuteja, CFO, Dalmia Bharat Limited; Mr. Rajiv Bansal, President and Chief Transformation Officer; and the other management of the Company.
I would now like to hand the conference over to Ms. Aditi Mittal, Head, Investor Relations. Thank you, and over to you ma’am.
Aditi Mittal — Head – Investor Relations
Thank you, Faizal. Good afternoon, everybody. We welcome you to the quarter-four FY23 and FY23 earnings call of Dalmia Bharat Limited. Hope you’ve had a chance to go through our results, which have been uploaded on the stock exchange. Without much debate, I’ll hand over the call to Mr. Dalmia for his opening comments. Thank you.
Puneet Dalmia — Managing Director
Good afternoon, everyone, and thank you, Aditi, for your opening remarks. It gives me immense pleasure to welcome all of you for the Q4 FY23 and FY23 earnings call of Dalmia Bharat Limited. Let me briefly share my outlook with you, and after which Mr. Singhi and Dharmender will give you more details about our performance.
I continue to have deep conviction on the Indian growth story and would reiterate the next two or three decades really belong to our country with GDP growth expected at 6.5% to 7% in FY24 and beyond. I think that for India to leverage 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 thrust on infrastructure development, increased public spending and augmentation of private capex is imminent. And cement sector would be a direct beneficiary of this. I strongly believe that Dalmia growth will continue to accelerate as India accelerates. From the end of financial year 2022, we have increased our capacity by almost 15% from 35.9 million tons to 41.1 million tons per annum at present.
Let me give you an update on the acquisition side of cement assets on Jaiprakash Associates Limited. Yesterday, we have signed a definitive agreement for the 2.2-million tons cement capacity at Bhilai along with 3.3 million tons of clinker, including both at Babalpur [Phonetic] and JP Super.
For the Nilgiri [Phonetic] cement capacity of 2 million tons, we are proposing to enter into a long-term lease agreement, having a term of 7 years with an option to purchase the Nilgiri unit anytime within the lease period for an enterprise value of INR250 crores. I’m very excited that this acquisition is coming at a time when India is at the cusp of a strong cement demand up-cycle, starting with the pre-election year 2024 when the industry demand is likely to grow at almost 8% to 9%.
In April 2021, when we had announced the capacity expansion plan and the first milestone of 49 million tons, we were not aware of the opportunity of JP acquisition. Now, with the Jaypee acquisition being signed, it was important to reassess and recalibrate the original expansion plan of 49 million tons. Accordingly, we have decided to defer the 2.5-million ton grinding unit expansion in Bihar. Due to this, the original capacity of the organic expansion changes to 46.6 million tons and the total capacity, including JP acquisition, changes to 56 million tons by end of financial 2024.
Even if you look at the year gone by, the industry cement demand is believed to have grown at 9% to 10% alongside an increase in prices on a pan-India basis. As Dalmia Bharat is marching towards its vision to become a 110-million and 130-million ton company by FY31.
Execution excellence and financial performance are the two equal priorities of the Company. During financial year 2023, we have delivered an industry-leading volume growth of 15.9%, buy away. And our revenue for full-year has grown by 20% YoY to INR13,550 crores.
Through significant improvement in multiple operating metrics such as increase in TCE ratio from 1.63 in FY22 to 1.71 in financial year 2023, or improvement in annual renewable energy consumption from 10% in FY22 to 21% percent in FY23.
I’m proud to say that our team has not only been able to mitigate the adverse impact of the inflation in the commodity crisis but also been able to build on the sustainability quotient of our operations.
On a full-year basis, the carbon footprint of our Company has further come down from 489 kg per ton of CO2 to 463 kg per ton of CO2. Our organization is deeply committed to all our environment related commitments under ASC, whether it’s already RA100, EP100 and EV100 by 2030, carbon negative by 2040. And these commitments are an integral part of my personal priorities too to deliver upon in a timely manner.
For the next year, FY24, some of our areas of focus for our Company will be, one, timely completion of the ongoing capex and integration of the JP Cement asset; 2, further improve our manufacturing KPIs and build long-term input security; C, HR transformation with focus on leadership development; 4, digital enablement of the Company.
To add to the strength of our leadership and assist in driving the Company in the next stage of its growth, I would like to share with you that we have appointed a Chief Operating Officer in our Company, Mr. Sameer Nagpal. Sameer has already been with the Dalmia Bharat Group as the CEO of Dalmia Refractory and he was instrumental in growing the business bottoms-up and finally, led the M&A transaction in which the refractory business was sold to RHI Magnesita. Mr. Singhi will mentor Sameer in his new role, and I’m excited about having him aboard.
With this, I would now like to hand over the call to Mr. Singhi for his opening remarks.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thanks, Puneetji. Happy afternoon, friends. Last year has indeed been a tough year competitively as our industry continued to witness unprecedented rise in commodity pricing and particularly fuel. But as Puneetji has mentioned that we are very optimistic about the year ahead of us now and believe that the peak of cost is behind us.
Besides the softness in the commodity prices, we are also witnessing a strong demand momentum. During financial year 2023, we delivered a volume and revenue growth of 15.9% at a volume of 25.7 million tons and 20% YoY at INR13,540 crores, respectively. This growth of 15.9% is maybe more than 1.5 times of all-India demand growth. The growth is balanced with our regions, East, Northeast, West and South. And delivering a double-digit volume growth during the year.
For the quarter, we had the highest-ever sales volume and absolute revenue in any quarter with volume of 7.4 million tons and revenue at INR3,912 crores, respectively. For the year, the NSR growth has been almost 14% — 4%, which was led by stability and strengthening of prices in the East and Northeast lead states. While the increase in MSR at 4% mean higher and the long-term average price is of 1.5% to 2% annually. It has not been sufficient to offset the [Indecipherable] of input price inflation.
During the year, the average fuel consumption prices spiked from equivalent petcoke price of $141 in FY22 to $198 per ton in FY23, which was again a net 40% improvement [Phonetic] in fuel cost. However, the good part is this improvement has started now subsidizing with the peak being $218 and now at $174 in Q4.
The good — further good news is now export prices of petcoke are around $140 per ton, which can be effectively used in second quarter. On a QoQ basis, prices marginally softened in Southern region but remained stable in East, Northeast and West. During the quarter, our variable cost was slightly impacted due to consumption of high-cost opening inventory of clinker and cement.
In Q3 FY23, we had picked up clinker inventory due to the upcoming planned plant sit-downs and debottlenecking projects in ensuing Q4. Thus while you may see a variation on quarter-to-quarter basis, but you will notice that during the full year there’s not much variation in our overall inventory levels. Even in the past, we have seen that companies undertake inland [Phonetic] planning. This is — number of factors suggests seasonality, plant shutdowns, repair work, new plant time, etc., which may lead to quarterly variations, but on full-year basis it tends to normalize.
Our EBITDA per ton during the full year has been INR900 a ton and our exit EBITDA came in better in Q4 at INR951 but — like Puneetji was mentioning, our people have been very proactive and as a team, we were successfully able to improve a lot of our manufacturing and sales KPIs which enabled us to mitigate the adverse impact of the inflation. Mentioning some of these during the year, our blending ratio improved to 84% during — from 79% in FY22. In Q4, we were able to take it to an all-time high of 88%, with all regions showing progress and this high blended cement would definitely further improve in quarters and years to come.
Our renewable energy capacity has increased from 17 MW in FY19 to now 166 MW by FY23 end, which is almost 10-times increase in the last 4 years. During the upcoming year FY24, we are targeting to almost double the current renewable power capacity, from 166 MW to around 324 [Phonetic] MW.
Our sale of premium products has also improved significantly by 19% [Phonetic] to 3.4 million tons during full-year FY23. As has been our commitment, we have been working on sustainability and reducing carbon footprints month-to month basis. And I’m very happy to again reiterate that our carbon footprint of 463 kg/ton is one of the lowest in global cement world. I would also like to highlight that 4 years back, we had targeted that our carbon footprint in FY23 would be 480 kg/ton, which our team has been able to improve to 463 kg/ton.
Moving on to regional performance, if we look at regional volume for our Company, both in South and East markets we outperformed and delivered double-digit sales volume growth. The performance in South is explicitly encouraging where over the last couple of years we have continued to strengthen our market share without adding any capacity in the region.
Another best part has been that in South also we have been able to further announce the blended cement volume, which will further help us in building up more blended cement volume in the years to come. At the same time, our confidence in the East market potential remains intact. With this is all the capacity announcements, we believe that the bulk of it has already been commercialized.
And now for FY23 to FY26, the rate of increase in capacity may drop to 4% or 5% of CAGR, with demand expected to outstrip it at 9% to 10% CAGR growth. This will lead to steady improvement in the utilization levels going ahead, and we could expect a much stable pricing scenario on back of this. And this would prove that our strategy for East has been right.
For Dalmia, East is one of the most efficient areas in terms of cost and we are able to sell 100% low carbon blended cement in this region. On the expansion side, while Shri Dharmender will give you the detailed update on capex and cash outflow, I would like to update that during the year FY23, we have commercialized 2.7-million ton capacity in both — each of these regions respectively. This has taken our closing cement capacity to 38.6 million tons.
Recently, in current month of April 2023, we have commercialized the new cement line at Bokaro of 2.5 million tons, which takes our capacity of installed capacity to 41.1 million tons. Another good part is that now Bokaro is one of the biggest cement grinding capacity in the country. During the year, our clinker capacity has also increased from 18.9 million tons to 21.7 million tons by March 2023. Now, during FY24, we have another 2-million ton clinker expansion to come up in addition to what would come along with Jaypee assets in Central region.
Friends, I’m happy to share that in Murli this is the detailed are carried out by our team as well as revalidation of certain mining leases. We have been able to meld limestone visibility of 18 years to 20 years. In times to come, it will further go up. During March 2023, our capacity utilization of the plant was at 52%. And in the month of March, we have crossed 60% capacity utilization and we are reasonably confident that during the current fiscal, we should be able to reach more than 60% capacity utilization.
On the cost side, we have also taken many initiatives such as commissioning of the WHRS of 7 MW, solar capacity of 4.5 MW which will give us full-year benefit from this year onwards as well, revising the coal engage as it’ll also help. Likewise, in Kalyanpur, which was the acquisition part [Indecipherable] and the plant which was closed for a long time, the plant has successfully been turned around and it is now one of the highest profit-making plant in our Eastern operations. In addition to stalling, 4 MW of WHRs and first floating solar power plant of 4 MW, we have again taken many operating initiatives to optimize cost and improve the plant throughput.
In regard to Jaypee acquisition, one of the initiatives which we took is how to enroll the existing dealers of Jaypee as well also to introduce brand but in advance in Central regions where we are not present. I’m happy to share that our initiative has led to enrolling around 1,000 dealers of Jaypee, which would — in time to come would be very helpful in ramping up our capacity of setting more cement — in addition to this, we have been also able to operate with the support of Jaypee Group, the plants which have been able to deliver the cement required.
Now, for the rest of the details and key financial updates, I would now request our CFO, Shri Dharmender, to share with you the figures and facts. And thereafter, I’ll be very happy to answer all questions in the Q&A. Thanks, and all the best.
Dharmender Tuteja — Chief Financial Officer
Thank you, Singhiji. As all the major business updates have already been covered by Puneetji and Singhiji, I’ll quickly jump into the key financial updates. With regard to the incentives, this quarter we have accrued INR92 crores of incentives which takes the FY23 accrual number to about INR272 crores.
The collections during the quarter have been INR96 crores and the total collection for the year has been closer to INR250 crores. The average receivable as of 31st March stood at INR700 crores. Going forward, including Murli, we expect incentive accruals to be around INR275 crores to INR300 crores for FY24.
Regarding other expenses, essentially we have seen an increase, which has three large components. The marketing spend during the quarter increased by about INR35 crores and also around contact crore each was on account of increase in the packing cost and the [Indecipherable] because of the higher volumes.
On the debt side, on full-year basis, our gross debt has increased by INR623 crores and the closing debt as of 31st March stood at INR3,763 crores. The net-debt-to-EBITDA as of 31st March was 0.09 times. Regarding capex, we have spent close to INR27 crores during the full financial year FY23. As mentioned by Singhiji, we have closed this year with a capacity of about 38.6 million tons per annum and the capacity as on date when we are talking today stands at 41.1 million tons.
Our budgeted capex spend for FY24 is in the range of INR5,000 crores to INR5,500 crores, including the payment which is to be made to Jaypee for the new acquisition in Central region. Of this, roughly about INR3,000 to INR3,500 crores will be paid for the acquisition and balance INR2,000 crores to INR2,500 [Phonetic] crores will be for the ongoing expansion for this, plus the other efficiency lined maintenance capex, etc.
And pursuant to aim of becoming a pure-play cement player and as already informed to you earlier, the Company had entered into a binding agreement to sell its entire investment of INR1.8-crore equity shares of Dalmia Bharat Refractories Limited at a consideration of INR800 crores to Sarvapriya Healthcare Solutions Private Limited, a promoter group company.
With regard to the same, I’d like to update that the total receivable — out of the total receivable, 20% which is INR160 crores, has been received in cash. And for the balance 80% consideration, NCBs [Phonetic] have been allotted to receivable. And also in line with the capital allocation framework, the Board has proposed a final dividend of INR5 per share, which is subject to the approval of the shareholders in the ensuing AGM. This is in addition to the interim dividend of INR4 per share, which was paid out in the month of November. The total dividend declared for the year, including interim, is INR9 per share which is same as declared and paid in last year.
With this, I now open the floor for question-answers. Thank you very much.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Indrajit Agarwal from CLSA. Please go ahead.
Indrajit Agarwal — CLSA — Analyst
Hi, good afternoon. Thank you for the opportunity. I have two questions, first on the organic expansion, while we have deferred the Bihar grinding unit, the other South grinding units remain as is. So, if you can help us understand what is the status of land acquisition, ordering of equipment, etc., and if we are confident of commissioning it in — by FY24?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Yes, so first expansion of our cement capacity is going to happen this year, which is near Tuticorin which we call Sapur [Phonetic] area. So, this will get completed well before time by June 24 — June 23. Second, two cement units which are being set up now in Kadapa and Ariyalur. They are all expected to go by March 2024. So, this is basically the 4 million tons. This will get added to the capacity in addition to some debottlenecking projects. So, we are all on track and well within the cost.
Indrajit Agarwal — CLSA — Analyst
So, what is the remaining capex in the organic part now?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Now in totality, we will be investing about INR5,000 crores, which would also include capex for Jaypee assets.
Indrajit Agarwal — CLSA — Analyst
That is I think for FY24. I’m saying, what is the pending capex just for the organic, so after what we have spent, say, about INR2,000 crores, INR2,500 crores for organic, will there be still some pending capex for the organic part?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Yes.
Dharmender Tuteja — Chief Financial Officer
So Indrajit, we would not give a breakup between how much we will [Technical Issues]. We are looking at spending, say, about INR5,800 odd crores next year, including Jaypee acquisition, Jaypee depending on how each of these [Technical Issues] is approved by the bank and the lenders. But we’re looking at a range of between 5,000, 5,500 [Indecipherable] in the range right now.
Indrajit Agarwal — CLSA — Analyst
Sure, thank you. My second question is on Jaypee acquisition. So, we understand that you have signed a definitive agreement and we had signed one earlier for the standalone Jaypee assets. So, what kind of timelines we can look at when those assets will be under our fold?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
It is a process and now lenders are picking up this matter, and within couple of months we should be able to operationalize.
Indrajit Agarwal — CLSA — Analyst
And we will need NCLT approval for this or that is not required?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
It may not be required.
Rajiv Bansal — President and Chief Transformation Officer
Now see, Indrajit, Rajiv here, see this was not admitted by NCLT, so the NCLT approval is not required. This requires lender’s approval and only for a Super Dalla there are certain conditions precedent. So, there’s two parts to it, one is the lender’s approval, second is the conditions specifically which is to be met. But as Puneetji was saying, at least the transfer in prices that we’re speaking about, we hope to close that in the next couple of months. And the Super Dalla, the finishing proceeding will be the closure of the arbitration proceedings with UltraTech. And once that is done is only when this will be closed.
Indrajit Agarwal — CLSA — Analyst
Sure, thank you. I have more questions, I’ll join back the queue.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thank you.
Operator
Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Sumangal Nevatia — Kotak Securities — Analyst
Yeah, good afternoon and thanks for the opportunity. My first question is on the cost. So, there was a sharp increase in raw material cost. Is it largely because of high opening cost inventory or also some other line items like flash, lag also saw some inflation, if you could share some details there? And also, the second part is on the fuel cost, if you could share what is the coal cost in 4Q23 and what is the guidance for 1Q24?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Yes, so one, to some extent the raw material cost has gone up on account of inventory. And second, since our city ratio has also gone up, so to that extent raw material cost has gone up. And thirdly, there has been little price increase in [Indecipherable], so in totality, that is the region. But at the same time, there has been substantial reduction in fuel price — power and fuel costs and this will be again further visible in quarters to come.
Sumangal Nevatia — Kotak Securities — Analyst
Okay. Is it possible to get some quantification, at least on the power and fuel costs, say, in terms of dollar per ton what was the average in 4Q23 and what is the current procurement levels?
Aditi Mittal — Head – Investor Relations
So, in quarter four, both the purchase and consumption has happened at about $174, $175 per ton. And during quarter one, we believe the rate should be anywhere about $165 per ton. So, another $10 is what you can see. The spot trade which Mr. Singhi had spoken about, the impact of that you can see quarter two onwards.
Sumangal Nevatia — Kotak Securities — Analyst
Understood, that’s very clear. And one just last question, we are doing a great job on increasing the blending ratio. I heard it correctly, it was 84% in FY23. So just wanted to know what sort of near-term target are we looking for in FY24, FY25, and give some comments on the acceptance of blended cement in non-trade segment, please?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Yes. So let me answer the last question first. You’re fully aware of the commitment of Indian Government to go green by 2070 in totality, but at the same time, the various initiatives which government has taken to encourage green products, whether it’s, say, green cement or green steel or many other such products. So now, various government departments have restarted accepting PPC or PSC in-place of OPC, and our team has been working very efficiently on this. And we are proud to say that in many projects including the project for Turner, projects for road, projects for bridges, now Dalmia infra cement which is a PPC product has been approved in place of OPC. And that would help us in a big way.
Similarly, there has been now have awareness in and road projectors, so they have also started now accepting PPC. And this has been — there has also been force from NHAI also to go for more and more. So, this is one part. Secondly, in quarter-to-quarter our blending ratio will go up as we are fully committed that in few years’ time, we should be producing only blended cement’, which is low-carbon cement.
Sumangal Nevatia — Kotak Securities — Analyst
So from 84%, I mean what’s — any sort of target we are looking at internally in — for FY24, FY25?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Similar [Phonetic], yes, but then well share when we do it.
Rajiv Bansal — President and Chief Transformation Officer
Sumangal, Rajiv here. We don’t want to put a number on a yearly basis or a quarterly basis. I think our goal of course is very clear, we just said, we want to be 100% [Technical Issues]. We’ve saying that for a couple of years now. And I think the road map — our trajectory is very clear, year by year. The thing is it’s [Technical Issues] a quarter or a year because every market operates differently, right, and so we’ll have to keep looking at it and tweaking it and recalibrating it. So, at this point of time the goal is very clear. I think eventually, continuous improvement and that journey will continue.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
And I may also add that even in — on total all India basis also, the low-carbon cement percentage in India is going up and the highest percentage of low-carbon cement in the world. So, it may be today around 71 — 22%.
Sumangal Nevatia — Kotak Securities — Analyst
Got it. Thanks, Rajiv and thanks, Singhiji. All the best.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thank you.
Operator
Thank you. The next question is from the line of Pinakin Parekh from JPMorgan. Please go ahead.
Pinakin Parekh — JPMorgan — Analyst
Thank you. So, I have two sets of questions. The first is on the JPA Cement acquisition. Now, given that JPA, the parent entity, is in the IBC and timelines — sanctity of timelines on any resolution or there has in the past across-the-board not been respected, is it fair to say that till Dalmia has clarity on the JPA acquisition, it will not go ahead with any organic expansion plans beyond the 46.6 million tons? Let me first clarify that Jaypee asset was not in admitted in IBC. And secondly, now even in court also where the picture was put up, now even banks are also now requesting High Court that since resolution is happening, so they would not like to proceed ahead. And because of that reason, we are fully confident that in couple of months we will be able to get this acquisition in place. Agreed, but if it gets delayed beyond couple of months, should we — so I’m just trying to understand that the next phase of organic expansion beyond 46.6 million tons, when should we see visibility on that? It’s only after JPA gets done, whatever the time frame would be, or during FY24 we can see that?
Rajiv Bansal — President and Chief Transformation Officer
No Rajiv here, let me answer that question. See, we have guided everyone to 75 million tons by FY27. That plan and that volume is intact. What we have done is 49 million tons is what we’ve committed by FY24. We’re likely to grow to 56 million tons including Jaypee acquisition. We are absolutely confident about Jaypee acquisition being closed in the next couple of months. In the next couple of months — hopefully in the next quarter, we will start giving you roadmap for the next leg of expansion from 49 million tons — 56 million tons to 75 million tons. So, there is nothing to stop pending Jaypee. I think we are committed to building a 110 million tons to 130 million tons company by FY31 and anticipated milestone of 75 million tons by FY27 stands.
Pinakin Parekh — JPMorgan — Analyst
Sure. Secondly, just trying to understand the final cost of the JPA acquisition, so the Company mentioned that INR5,000 crores of spending in FY24, it includes INR2,600 crores, INR2,700 crores of organic capex, the rest is JPA. So, is this the final cost to ramp up the assets or will there be an additional cost over the INR2,000 crores, INR2,500 crores. What will be the total cost for that 9.4 million tons, given now that you’ve signed a definitive agreement you will be in a better position to answer that?
Rajiv Bansal — President and Chief Transformation Officer
So if you remember, when we had made the announcement about the Jaypee acquisition, we’d said the total consideration was about INR5,656 crores and we’d also said that we’ll probably spend about INR800 crores to INR1,000 crores additional to bring the plants to the state-of-the art [Technical Issues] everything else.
Now, only the third tranche of Super Dalla is likely to — probably it will be dependent on the closure of the arbitration proceedings between Jaypee and UltraTech and that if you look at the balance amount, I think we will be spending roughly about INR700 odd — plus crores on doing them. So, total cost would still be about $70 odd per ton. I think it’s a great asset and I [Indecipherable] we’ve also started the polling agreement. We have started enrolling dealers. We’ve started understanding the market, we’ve started building the brand, so that the moment these transactions have closed, we can hit the road running.
Pinakin Parekh — JPMorgan — Analyst
So, it’s fair to say that there will be another equally large amount of spending related to JPA in FY25 as well, right, beyond the INR2,500 crores this year?
Rajiv Bansal — President and Chief Transformation Officer
Absolutely. We’d already guided that in the FY, talking about the about it the number would INR800,000 [Phonetic] crores, on this overall [Technical Issues].
Pinakin Parekh — JPMorgan — Analyst
Understood. And my second question, just trying to understand the power and fuel cost, so $175 in 4Q23, $165 in third quarter, $140 per ton at the spot market. So, to that extent, at this point of time, the power and fuel decline so far did not flow through to the EBITDA line. Going forward, at least in the first half of the year, do we expect pricing to hold up and hence the full benefit of lower power and fuel cost to flow through the bottom line or pricing is expected to remain soft?
Dharmender Tuteja — Chief Financial Officer
Difficult to predict pricing. As you know, there are too many moving parts in the pricing, the region, stay, individual markets. But I would not like to look at pricing on a quarter-to-quarter basis. If you look at on an annual basis, I think we’ve been getting around to 1.5% to 2.5% increase on an average. Last year, we’d seen 4% price increase. So, [Technical Issues] had gone up dramatically. As you all know, we keep that installed base at spot prices, which Aditi and Mr. Singhi shared a few minutes back.
So definitely, the — our ability to purchase power and fuel and petcoke at lower cost will flow into the EBITDA and how much we decide to invest back. See, we’re building a business for generations, we’re bidding business for decades, so there are some investments in different markets in terms of brands. As we’re becoming a larger company, and a large company — we also just spend money on brands. We’re getting in newer markets. So, we have to balance this out, right. We would like to build a sustainable and scalable business model. For that, we may have to invest certain amounts of money. But yes, the petcoke cost [Phonetic] coming down is a huge boost for us to invest money with markets, increase our businesses and bigger [Technical Issues].
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
And let me just add that, yes, whatever you are thinking, overhead fuel cost will come down in quarter one and quarter two also.
Pinakin Parekh — JPMorgan — Analyst
Understood. Thank you very much, sir.
Operator
Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar — Jefferies — Analyst
Yeah, the first question is on the fuel cost again. So, had this inventory impact would not have been there, so what would be the like all-in fuel cost-benefit which we could have realized on a per-ton basis during the quarter?
Aditi Mittal — Head – Investor Relations
So every $10 change, Prateek, in terms of pricing leads to about $30, $35 of cost savings. To that extent, it has fallen. What we’ve also seen during the quarter, that our renewable power capacity has gone up on consumption basis. That has also led to some benefit. Like Mr. Singhi had mentioned in his opening remarks, in the last quarter three and quarter four, there has been a little bit of an anomaly because of the opening and closing stock. Otherwise, as the markets are seeing the benefit and the industry is witnessing that a decline in power and fuel cost flows into the numbers, it goes into our numbers as well, and on a yearly basis, the inventory impact is actually almost negligible.
So going forward, so this will normalize, you will see that next quarter to the extent of softness in the power and fuel cost, it will directly flow into the P&L. [Speech Overlap] Pinakin was also asking.
Prateek Kumar — Jefferies — Analyst
Right. Okay, so on a closing 4Q basis, in terms of power and fuel cost, I mean assuming petcoke at $140 or lower, so on a full-year basis, FY24 [Technical Issues]…
Operator
Mr. Kumar, the audio is not clear from your line, sir. Your audio is breaking.
Prateek Kumar — Jefferies — Analyst
Hello, is it better now?
Operator
Yes, sir, please repeat. The current participant has left the question queue. We’ll move on to the next question. From the line of Rajesh Kumar Ravi from HDFC Securities.
Rajesh Kumar Ravi — HDFC Securities — Analyst
Yeah, hi [Technical Issues], am I audible?
Aditi Mittal — Head – Investor Relations
Yes.
Operator
Yes, you are audible.
Rajesh Kumar Ravi — HDFC Securities — Analyst
Yeah, hi. First question pertains to the fuel cost, could you give us the per kilo-cal whatever is the cost in Q4 and what is expected — what is the current trend in Q1? And secondly, pertaining to the same, if I — what you have mentioned that the blending ratio has increased to 88%, it was close to 83%, so significant savings should have come in even from your raw material…
Operator
Mr. Ravi, please use the handset mode, sir. The audio is..
Rajesh Kumar Ravi — HDFC Securities — Analyst
Hold on, please. Hello, am I — is this better?
Operator
Yes sir, thank you.
Rajesh Kumar Ravi — HDFC Securities — Analyst
Okay, so on a per kilo-cal basis, the fuel cost would have come down, so what is the per kilo-cal cost? And with the increase in blending ratio from 83% to 88%, even the total variable costs should have come down. But as you have reported, even the variable cost has gone up Q-on-Q? So, what explains that?
Aditi Mittal — Head – Investor Relations
So the Kcal rate for the quarter is 2.06. And on the raw material, Rajesh, I think what everybody is doing while calculating the VC is taking the full impact of the change in stock of inventory and which is why you are seeing an increasing trend on a quarter-on-quarter basis. But if we were to remove the impact of the opening high-cost inventory, the decline in raw material or power fuel is visible and more so because the blending has definitely gone up between quarter three and quarter four from 83% to 88%. But I think it is only because we have high stock of closing [Phonetic] inventory which is at a higher court, also has certain fixed expenses allocated into it, it is showing an increasing trend when you club all four line items and do a VC per ton.
I think next quarter onwards you will get a lot more clarity as this inventory line normalizes. And — but if you were to ask ex of this, the benefit is visible in the raw material and power and fuel cost effectively.
Rajesh Kumar Ravi — HDFC Securities — Analyst
So, from 2.43 in Q3, we have already come down to 2.06 sort of, and there further expecting it to come off in Q1. So — and that with the increased blending and no anomaly on the inventory side, we should see boost to the numbers, assuming prices remain stable on the cement side, right?
Rajiv Bansal — President and Chief Transformation Officer
Yeah, Rajesh, Rajiv here. [Technical Issues] look at the inventory line, if you look at — on a year-on year basis, there is actually no impact. On a [Technical Issues] basis, you do see an impact of opening stock and closing stock depending on production shut-downs. We also did some debottlenecking because it’s better to take shutdown in some of our plants. There’s still that quarterly anomaly which keeps happening depending on — there’s so much of volatility in the input cost, so opening stock — the present stock valuations will be very different, right.
So, I think if you look on an annual basis, I think generally you see over the year the trend [Technical Issues] does not really make an impact. So, I think I just want to make that point that, yes, on a quarterly basis you will see aberrations here and there depending on schedules and everything else, but on an annual basis, you don’t see that kind of impact.
Rajesh Kumar Ravi — HDFC Securities — Analyst
And so, sir, full-year what would be your per kilo-cal cost rate?
Rajiv Bansal — President and Chief Transformation Officer
Full-year will be 2.21.
Rajesh Kumar Ravi — HDFC Securities — Analyst
2.21 and closing is 2.06, so a good saving hereon. Okay. Second on the acquisitions and capex, first on Jaypee acquisition which was announced was INR3,200 crores, right. And the current announcement which came — which would another — sum-up to another INR2,300, INR2,500 crores. Is that understanding right?
Aditi Mittal — Head – Investor Relations
Yes, absolutely.
Rajesh Kumar Ravi — HDFC Securities — Analyst
And additionally, we would be doing another INR1,100 crores and INR800 crores additional, you said INR1,800 crores is total to make them success [Phonetic]?
Aditi Mittal — Head – Investor Relations
INR800 crores.
Rajiv Bansal — President and Chief Transformation Officer
[Speech Overlap] our entire 9.4 million tons, we may spend between INR800 crores to INR1,000 crores.
Rajesh Kumar Ravi — HDFC Securities — Analyst
Okay, so this INR5,500 crores and INR5,600 crores total acquisition cost will go in FY24 itself?
Rajiv Bansal — President and Chief Transformation Officer
No, it will happen over — see, the additional INR800 crores to INR1,000 crores will be split depending on when each of these plants in the tranches are closed. [Indecipherable] it may take a couple of months, so the initial money transaction between Jaypee and the banks will happen immediately in FY24. The expansion that we’re talking about or the other modifications and refurbishment, everything else, would generally happen in this subsequent period.
Even if you look at on the [Technical Issues] consideration, JP Super, which is a separate tranche, would happen only when that is closed, which is subject to the condition that we’re speaking about of UltraTech and [Technical Issues] UltraTech and Jaypee and that consideration is 1,690. So, out of 5,666 they got 1,690, we’re talking about total of about INR4,000 odd crores. And of INR4,000 crores, we probably spent about [Indecipherable] this quarter, 9.4 million ton of [Technical Issues].
Rajesh Kumar Ravi — HDFC Securities — Analyst
Thank you.
Operator
Mr. Ravi, may we request that you return to the question queue for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one per participant. Should you have a follow-up question, we would request you to rejoin the question queue. First [Phonetic] question is from the line of Shyam [Phonetic] from Franklin Templeton. Please go ahead.
Unidentified Participant — — Analyst
Yeah, hi, good afternoon. Thanks for taking my question. I hope I’m audible.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Yes.
Unidentified Participant — — Analyst
Yeah, on the geography mix perspective, we do hear that Southern region was particularly quite strong in the fourth quarter. How has the geography mix changed when we look at sequentially? And was that any — did that have any impact on the EBITDA per ton or the spread that we saw on a quarter-on-quarter basis? That’s the first part of my question.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Geographically, it has not much changed, but at the same time, when we look at increase in prices, then increased prices had gone up to some extent whereas in the southern part of India, prices either was still in one or two states and had gone down also. So from mix point of view, not much change. But from budgeting point of view, it has changed, and that has got us some price increase.
Unidentified Participant — — Analyst
Sure, understood sir. And sir, just a follow-up on that. Now, given that we are seeing Southern pricing being weaker, now with the cost curve shifting down meaningfully from the second quarter FY24 [Phonetic], do we see sharing some of these benefits with the customers until we reach a certain hurdle rate of EBITDA per ton? How do we think about the sharing of these cost benefits that we’d likely see in the second half of FY24?
Rajiv Bansal — President and Chief Transformation Officer
Hi, Rajiv here, see, when the input cost went up so much, the question came to us was, why you not able to share it with the customers and why you’re not able to pass it to the consumers. And then it started coming down, the question is how much of it will be shared with the consumers.
I think there will be volatility in the prices. As I told you, there are multiple factors that define how the prices move by region, by state, by different product lines. On an average, if we look at it, our prices do increase year-on year between 1.5% to 2.5%. Last year was 4% in spite of all that happened, it had confirmed about the entry of Adani into this sector and what will happen to the pricing environment and other things. But if you look at it, on an average we got about 4% price increase, right.
The demand environment was very, very good last year. I think he was saying, we’ve almost 9% to 10% cement demand up for the industry as a whole last year, and we expect that to continue into next year as the field action here. Now with such a great demand that we’re talking about for the industry, I would expect — with the input cost going down, I would expect the pricing performance to be stable and I would also say the EBITDA performance to be better for everybody.
[Technical Issues] specifically, but for the industry as a whole, I think…
Unidentified Participant — — Analyst
I was trying to get it from — more from an industry perspective as well Thank you. And one last point, from an expansion per se, in FY24 our Southern cement grinding capacity goes up by roughly 9 million tons, including the debottlenecking in Belgaum. How do the — sorry, just the — I’m trying to understand, sir, from supplying of clinker to these units, how does that arrangement work, if you can just help us understand that?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
So, that arrangement works very well because we have sufficient clinker to support the production of cement. And as you also know that once we put up a capacity of 4 million plus, immediate we would not be working on 100%, but at the same time, the mets [Phonetic] which we have done, the blending ratio which we have done, we have sufficient clinker to serve full capacity of cement in Southern India.
Unidentified Participant — — Analyst
Sorry, just to clarify, this is from the Kadapa unit and existing in Ariyalur clinker, that is — that will support this? Just to understand…
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Yes, so we have four plants in Southern India which produces clinker, which is Dalmia Forum, then Ariyalur in Trichy district, then Kadapa in Andhra and then Belgaum in Karnataka. So, these all four plants produce clinker and cement. So, all this clinker of these four plants will be able to serve the cement capacity which we are putting up.
Rajiv Bansal — President and Chief Transformation Officer
If I can just add here, when Puneetji in his opening remarks spoke about the clinker debottlenecking and how we’re going to increase in the next financial year, almost I think 0.9 million ton to 1 million ton is coming from South. So, there is almost a 0.9 million ton to 1 million ton of clinker debottlenecking which is happening from South in addition to what Puneetji was talking about at Kadapa.
So, I think we’ll be — we are very comfortable about [Technical Issues] also said, increasing our renting in South, I think it gives very encouraging results and we hope to continue with that.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Another 1.2-million ton capacity of clinker would also be added to the debottlenecking.
Unidentified Participant — — Analyst
Understood. Thank you very much. I’ll fall back in the queue. Best wishes.
Operator
Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.
Pulkit Patni — Goldman Sachs — Analyst
Sir, thank you for taking my question. Continuing with what Shyam was asking, if we look at bulk of our expansion next year is happening in South India, in light of that, how do we expect blending ratios to go up? I mean, our understanding was that acceptability of blended cement in South is still not as high as it is at East. So if you could highlight what is the strategy there.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
So, I would say that there were apprehensions in the mind of many people 2 years back, 3 years back, a little bit in our mind also. But then, whatever performance we could see, whatever the success we could see of last one year, we do see that there is a full acceptability. And second, there is 100% blended cement usage in retail market itself and our trade set is going up there.
In addition to this, in institutional sales also more and more acceptability has been coming which I shared earlier also, that government is also working on it. The prudent developers, prudent contractors, they are now also accepting PPC. So, this is the trend which will ultimately prevail.
Aditi Mittal — Head – Investor Relations
Pulkit, if I were to just add a few numbers to it, I think in FY19, 5 years back, our blend ‘books in South was almost 40%, 45%, which increased to 50% in FY21. And on a full-year FY23, 65%. Quarter four, the blended cement percentage was highest ever at about 75%. So, I think as Mr. Singhi was saying, whether there is an effort on both this side of the government and companies altogether in the sector. I don’t think there is problem in terms of acceptability, and its actually showing up in our numbers also ‘now. Year-on year it is getting access, so 75% for South is actually pretty high.
Pulkit Patni — Goldman Sachs — Analyst
And if required, at any point of time, our team can share that how acceptance of PPC has come up in various very important critical projects of the country. Sure sir, that’s helpful. Sir, one more question if I could. Can you split the volume growth between South and East maybe for the quarter or for the year.
Rajiv Bansal — President and Chief Transformation Officer
Pulkit, we don’t give Asian numbers, I’m sorry about it. I think you said you have seen the advantages, volumes growth in every region that we obtained. We want a very, very stable growth in every region. Unfortunately, we don’t share numbers [Technical Issues].
Pulkit Patni — Goldman Sachs — Analyst
No problem. Thank you so much, Rajiv.
Operator
Thank you. The next question is from the line of Ritesh Shah from Investec Capital. Please go ahead.
Ritesh Shah — Investec Capital — Analyst
Yeah, hi. A couple of questions, first is with respect to the Jaypee assets, can you please give some color on the limestone reserves? That’s one. And second is the growth optionality on the assets and third is incentives, if any, related to the assets we can enjoy going forward. So, that’s the first question in three parts, sir.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
There is sufficient quantum of limestone in their lease area and we have done study and more study would be done as well. You can also be confident of Dalmia’s history of getting limestone everywhere, whether it’s Kalyanpur, whether it’s a Murli or any other. We have seen Jaypee area and there is sufficient limestone. And this is how we have gone ahead. So, this is on limestone part. Yes, please.
Ritesh Shah — Investec Capital — Analyst
Sir, second question over here was growth optionality. Can we increase the capacities over here? The third question over here was on the incentives definitely, corresponding to the Jaypee assets.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
So now, are you confident of limestone [Indecipherable] top of expansion.
Ritesh Shah — Investec Capital — Analyst
Yes, sir, I will go by what you said, sir.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thank you. Yes, once we acquire this asset, then definitely we will come out, but then definitely there are possibilities. There are good possibilities, one, on account of good plant of Jaypee as well as the possibilities, limestone reserves as well as the increasing demand in Central regions and particularly — to some extent in part of [Indecipherable] also.
Ritesh Shah — Investec Capital — Analyst
Is it possible to quantify something like we can double the cement capacity, double the clinker capacity, any numbers over here?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
What do you want to hear?
Ritesh Shah — Investec Capital — Analyst
Whatever is visible.
Rajiv Bansal — President and Chief Transformation Officer
So Ritesh, as I said earlier, we would share the plans beyond [Technical Issues] 75 hopefully in the next earnings call. We’ll have to unfortunately wait till then. Once we are closing the Jaypee acquisition, [Technical Issues] our minds there, we are looking at each of the plants, the debottlenecking opportunities there, expansions that we can do further. I think we were all work in progress. And I would not want to jump into it and commit some numbers. I think we’ll have to do our homework properly and then come to you and reported the number. So, I think wait for another 3 months, hopefully we should be able to announce [Technical Issues].
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Right.
Rajiv Bansal — President and Chief Transformation Officer
There are good growth opportunities everywhere.
Ritesh Shah — Investec Capital — Analyst
Right. Sir, just last question. What is the status of East India Energy? I think this 180 MW, is it also part of the transaction? That’s one. And the second question over here is basically how critical is Super Dalla to us? And the value that you’ve indicated of INR5,600 crores, does it include or exclude that? If it excludes, what’s the quantum corresponding to that particular asset? Thanks.
Rajiv Bansal — President and Chief Transformation Officer
I’ll try and answer the last question first. INR5,666 crores that we spoke about increased the value for Super Dalla INR390 crores. So, that is [Technical Issues] about INR4,000 crores.
Ritesh Shah — Investec Capital — Analyst
And this power plant is part of the deal?
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Power plant is part of the deal.
Ritesh Shah — Investec Capital — Analyst
Sure. I’ll join back the queue. Thank you so much for that.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thank you.
Operator
Thank you. Ladies and gentlemen, due to paucity of time, we will take the last question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah — Dolat Capital — Analyst
Yeah, thank you. Sir, first, on the costing front, just to clarify, the other expenses that we mentioned, INR75 odd crores higher, so from the Q1 FY24, will this number remain so that in totality the — or in part and in terms of the other expenses will it remain same or can we see a sizable reduction there?
Aditi Mittal — Head – Investor Relations
So, as Dharmender had mentioned, the sequential INR80-crore increase that you’ve seen in the other expenses, INR40 crores which pertains to the bag and the depot expenses is semi-variable in nature, so it depends upon the volume. And the INR35 crores that we have spoken about pertains to advertisement expenses, because we are adding capacity. On a per-ton basis, the cost has been relatively stable.
So going forward also, I think on a per-ton basis, we would expect stability. It is — this sequential increase that you saw was mainly to do with an increased volume. So, I think on a per-ton basis, the costs are expected to remain stable at the current levels.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
And otherwise also, if you look at fixed-cost per ton, you would find that Dalmia Cement’s fixed cost per ton would be one of the lowest in the industry.
Shravan Shah — Dolat Capital — Analyst
Yes, sir. Secondly, on the Kcal basis, you mentioned that for 4Q it is 2.06, so in Q1, this current quarter, how much we are expecting the Kcal?
Rajiv Bansal — President and Chief Transformation Officer
About 5% reduction we can expect, 5% to 6%.
Shravan Shah — Dolat Capital — Analyst
Okay, 5% to 6%. And net-net, if we look at the — let’s say, if we assume this $165 petcoke, then on the full-year basis, if we have to look at — so how much more reduction — sorry?
Rajiv Bansal — President and Chief Transformation Officer
That will go down further. So, let’s say, Q2 and other, you can expect fall of about 10% as the prices have come down. So, Q2 improvement of 10% over Q1 and Q1 itself will be improvement of 5% or 6% improvement over Q4 of this year.
Shravan Shah — Dolat Capital — Analyst
Okay, that’s correct.
Rajiv Bansal — President and Chief Transformation Officer
[Speech Overlap] move, it will move. [Speech Overlap].
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thanks, everyone.
Shravan Shah — Dolat Capital — Analyst
Yeah, sir, last one, sir. Have you seen any price increase in this month, April?
Dharmender Tuteja — Chief Financial Officer
We wanted to see, but we couldn’t see.
Shravan Shah — Dolat Capital — Analyst
Okay, thank you sir.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thanks.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Puneet Dalmia for closing comments.
Puneet Dalmia — Managing Director
Thank you all for your interest in us. And we ended a very volatile year with great performance. I look forward to staying in touch and I’m very confident that there are good times ahead. Thank you.
Mahendra Singhi — MD and CEO, Dalmia Cement Bharat Ltd.
Thanks, everyone.
Operator
Thank you, sir. [Operator Closing Remarks]