Heidelberg Cement India Ltd (HEIDELBERG) Q3 FY21 Earnings Concall Transcript

Heidelberg Cement India Ltd. (NSE:HEIDELBERG) Q3 FY21 earnings Concall dated Feb. 11, 2021,

Corporate Participants:

Jamshed Naval Cooper — Managing Director

Anil Sharma — Chief Financial Officer

Analysts:

Vaibhav Agarwal — PhillipCapital (India) Private Limited — Analyst

Chintan Sheth — Sameeksha Capital — Analyst

Manish Saxena — Pinebridge Investments — Analyst

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Raghav Maheshwari — Asian Markets — Analyst

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Amit Srivastava — B&K Securities — Analyst

Manoj Shah — Laxco Investment — Analyst

Amit Murarka — Motilal Oswal — Analyst

Ritesh Shah — Investec — Analyst

Arijit Dutta — Axis Capital — Analyst

Amish Kanani — JM Financial — Analyst

Gaurav Rateria — Morgan Stanley — Analyst

Kamlesh Bagmar — Prabhudas Lilladher — Analyst

Milind Raginwar — Centrum — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Heidelberg Cement India Ltd Q3 FY ’21 Conference Call hosted by PhillipCapital (India) Private Limited. [Operator Instructions]

I now hand the conference over to Mr. Vaibhav Agarwal of PhillipCapital (India) Private Limited. Thank you, and over to you, sir.

Vaibhav Agarwal — PhillipCapital (India) Private Limited — Analyst

Thank you, Aman. Good afternoon, everyone. On behalf of PhillipCapital (India) Private Limited, we welcome you to the Q3 FY ’21 conference call for HeidelbergCement India Limited. On the call, we have with us Mr. Jamshed Naval Cooper, Managing Director; and Mr. Anil Sharma, Chief Financial Officer.

I would like to mention on behalf of HeidelbergCement India Limited and its management that certain statements that may be made or discussed on the conference call may be forward-looking statements related to future developments and the current performance. These statements are subject to a number of risks, uncertainties and other important factors, which may cause the actual developments and results to defer materially from the management.

HeidelbergCement India Limited and the management of the Company assumes no obligation to update or alter these forward-looking statements, whether as a result of new information or future events or otherwise. Also, HeidelbergCement India Limited has uploaded a copy of the presentation on the exchange and its website. Participants may download a copy of the presentation from these websites.

I will now hand over the floor to the management of HeidelbergCement India Limited for their opening remarks, which will be followed directly with a Q&A. Thank you, and over to you, sir.

Jamshed Naval Cooper — Managing Director

Thank you, Vaibhav. Good afternoon to everyone for making time available for this earnings call. So you would have gone through the presentation that has been uploaded on our website. Nevertheless, I’ll go through it once again before we open our session for question-and-answer.

So the first slide was about — Page number 3, which was about the overall cement industry overview. You can see how the volume developments have taken place. These are figures which we have taken from the DIPP or from various government sources, so we go by these data. However, these data could vary on actual results, and that is what we will have to take note of this. But all said and done, there is a revival on cement demand gradually, although it is up and down. I would say the — at the moment, I would say, the industry or any — the economy is on a camel’s back ride, so it is up and down. So that will continue till the COVID issue gets settled down. And as I say always, the Indian industry or Indian environment works less on figures but works more on sentiment. So unless the sentiment gets positive, we will continue with this up and down situation.

Coming to the Slide number 4 of the page, where we have talked about our operational results. So you have seen that we have grown by almost 3.7% on volumes and price by 4.5%. On the gross revenue basis, it is close to 8.5% growth, which we have delivered.

Volumes are recovering, especially in most micro-markets, and things seem to be a little better. And as the government has announced quite a lot of measures in terms of impetus in the economy, the budget — recent budget looks very promising. However, it has to be seen on the ground, what is at the implementation stage, how we fare on that.

Your company, HeidelbergCement India is 100% blended cement. So on the sustainability part, I think we continue our trajectory and our growth which is continuing with 100% blended cement. Our dependence on grid power is about 66%, and in the future, it is likely to further reduce as we put up our — which then — ongoing projects which come up on steam.

We continue to operate on a negative working capital, which you may appreciate because there is a cost of capital for every operation we do. So this is a subtle earning where you get the benefit of an organization, that means the risk is zero. We are totally covered against risk, and you’re working with a negative working capital, so your involvement — financial involvement is virtually negligible. So this is another — which support, which the organization gets by way of even de-risking itself from the market risk.

You will be happy to note that as planned INR1,250 million of our non-convertible debentures has been paid up, and now the remaining is about INR1,200 million which will be paid in the December of next year.

Net cash balance today is INR216 crores. We continue in our attempt to improve our carbon footprint. We have invested — we are right now investing into AFR and solar projects. Both these projects are underway, and they should start yielding results sometime in the second half of the next year. And this will further reduce our carbon footprint. And of course, there I’m sorry to report that there was a small LTI, but for us, it is — just only an LTI, people may take it. But for us, as an organization, which has pledged and which has committed itself to go to a zero harm, this one LTI also, even if it is a scratch to the person, it means a lot to us. So it is a lost time injury for us, and we are reporting here as for the part of a good corporate governance.

Coming to our Slide number 5. If you look at our interest and financial charges, which is the highlight of this whole page is it has come down and it will come down further in the next year also. As I said, operating income, net of taxes has already gone up by 8.5% despite the difficult market condition, which it has gone through. It is not today’s times, when we talk about working capital, when I just mentioned to you, prices of liquidity crunch, okay, to achieve negative working capital is a — I would say that kudos to the team, people at the ground level, who are on the procurement team and everybody who has managed the cash flows from the field well.

There has been a marginal increase on the logistics costs, which I should explain to you. This is what you would have seen that over a quarter — on a year-on-year basis, there has been a diesel price increase of almost close to 5%. So there is some deflection of this — in this, and there has been some alignment what we are trying to do in terms of logistics. But considering today’s logistics cost also of about INR600 a ton, HeidelbergCement India is — I would — I’m sure you will find it as one of the very promising on logistics account.

If we take you to the waterfall on Page number 6, you will observe that the price has been one of the major key functions where which has helped us improve our EBITDA. But unfortunately, or — I would not say, unfortunately, but there has been — the power and fuel, there has been an upside. That is — it was expected internally by us for the simple reason that these are one-off costs, which has come up. There is a fuel cost marginal. Then there is — we had a major shutdown, okay, which normally, — you know that we have a long OLBC, which is about 21 kilometers, and that belt requires replacement once in eight or nine years — seven or eight, nine years. So that was to be put up, so we had to shut down our Line 3, which is one of our major lines. And for that reason, purpose, WHR does not work up, so my power cost goes up. But if I was to remove this on a basis, my — I feel that the organization is — has done well in terms of its EBITDA margins. So right now, the EBITDA margins you are seeing is about 20% — 20% to 20.2%, or something, which is — if I was to take it account for that, it will again bounce back to about 23% EBITDA margin.

And there are other costs, marginal freight cost. Raw material cost has gone up because of when these shutdowns take place, these small, small things do happen. But I’m not worried about it because these are one-off expenses, which I will — don’t really bother us too much because it is a part of our business process, which we have to keep rejuvenating our plant. We cannot keep our plant operating at risk, so we had to put some investments on that on repair and maintenance.

Coming to Slide number 7, 45% of our volumes are by roads, so there are — you can see that there is a small change in this particular percentage because of rail freights. We adjust our movement very, very carefully, depending on the freight available, and this time, the railway peak season surcharge has not come, so we have moved a little bit towards rail, so we keep blending our movements and evacuation on that basis.

Now, it is unfortunate that today, pet coke is costlier than coal on a gigajoule basis. And this prompts us to again, redesign and change our recipe of our fuel mix. So we are planning now to go 50/50, in feature also maybe a little here and there because despite — let me put it for the benefit of all of you, that we use coal in order to consume low-grade — of course, this pet coke in order to consume low-grade limestone also. If you want to consume low-grade limestone, which is otherwise going to go waste and become a burden of disposal and the mining department is not going to allow you at one fine morning, they will say, okay, you have to lose a certain amount of lime there. So we are not doing selective mining. We are ensuring that while we are reclaiming land again, with mines closure one after the other, so we have to use this low-grade limestone also, and for that reason, we have to use pet coke here.

In my earlier slides and in my earlier sessions, I would have explained to you that by using a good mix, we have been able to extend the life of our limestone quarry by almost seven years. So this is one major chunk, so we need spend a little more here but the long-term benefits are far more.

Coming to our products of which we call it as the building products, we launched one product which is called the — which you see in this beige color bag. This is a new product, which we launched. And both the volumes of these combined is about 22%, which is a growth of almost 33% year-on-year. There is a marginal decline in the trade sales. Earlier — in last previous quarter, it was 85%, which has come down to 80%. But I think this is good enough at the moment when we are able to get a good price in non-trade, so we are picking up non-trade also. When we don’t get a good price in non-trade, we switch to trade. So it is a blend of all the combinations which keep going on.

Now coming to Slide 8. As I mentioned to you, that now only about INR1,200 million is left, which will be paid in the next year. After that, the Company is not having any interest to be paid on any of the loans it has. So just it has got an interest-free loan on which it will keep earning a small interest. Weighted average of interest has decreased to almost 3.52%. So you can see the total net balance is close to — we have got a good net balance in our account, but close to about INR570 crores of cash is there in the banks. To tell you further, that we are also looking at some of the capexes what we are going to do, even maintenance capexes and things like that sustainable capexes. So this will be in the coming year is going to be about INR90 crores of capex, which we will do for 2021.

And let me again put one more point as a cautionary here that we have got this 21-kilometer belt. So this belt will undergo a further repair in the month of next June or second half of the second year, so we have got a time schedule to replace it. So you may see a small change, so don’t get upset about it. This will come in terms of similar lines. But I’m just cautioning that sometimes people think that the results are bad, but these are — this happened once in eight, nine, 10 years and we will — so I’m just upfront cautioning that some small amount will come here, about INR3 crores, INR4 crores [Indecipherable] things will come and impact this. And that time also when we have to shut down the line, about — it costs us about something like — because of this, about INR8 crores, INR9 crores. So if you have to add up — today also, if you add up about INR9 crores to our EBITDA — our gross EBITDA, then you will see that we are — we have performed to your expectation wise, I suppose so.

Coming to our environment and social foot ESG, we’re talking about. You can see where we are, where we compare ourselves, and our target is to reach below 500 much before 2030. And we are totally committed to get our carbon footprint well within because we do not know when the government will bring a carbon cess tax, and then we will not know what to do. So we have been investing over a period of time, so you may not see those big capexes with us, but small, small capexes we have been doing to ensure that the sustainability of the business — basically from the business sustainable — environment sustainability, we are scoring higher.

As I said, we are a 100% blended cement company. 40% of our WHRS contribute — power is contributed by WHRS, and we are putting up a 5.5-megawatt solar power plant. Ammasandra unit is almost full green power is 70% of the power comes from there. Water positive, we are 5.2 times water positive. And we said — as I said earlier also that we are monitoring the temperatures of our plant vis-a-vis 1 kilometer outside, and I’m very happy to say that from 2014 to now, we have been able to take a reduction of 1.2 degrees, so this is by plain — by ensuring a good hygiene factor with the plants, good environment within the plants. We are preventing any fugitive emissions. We are ensuring that the green cover is increased. And this is being monitored on a weekly basis, so these temperatures, we are very concerned about it, and the target is to reach 2 degrees lower, which is as per the Paris Protocol that you got to reduce the global climate temperature by about 2 degrees over 1990 levels.

So our contribution, we can do it as best in our own area, in our mines and anywhere, and rest the society. So to support the society, we have started this Friends of Earth, where we put up now trees. These trees are geo-tagged on the website and about 1,500 trees have been planted there. These are geo-tagged. There are far more. We have to yet to tag them because the details of those geo-tags are not available, so those are — they are waiting to be uploaded.

So you will be happy to know that we have a quarry life program in which we monitor regularly the birdlife, okay. And the birdlife is being monitored by Bombay History Society also, and which is an independent agency. And the group auditors have audited it, and they have found that there are about 117 birds species which are there, out of which there are about seven or — five or seven of them are under the endangered species. So we are getting these birds also in our quarry life. So we are rehabilitating the quarries, whatever we are quarrying, and we are putting it back and giving it back to the nature. At our Narsingarh plant, we are putting up an AFR project, and that should be commissioned somewhere in the second half of the year.

Coming to corporate social responsibility, you can see that our spends on social responsibility, CSR budget has increased. We did this annam scheme during the COVID times, giving food to the underprivileged. The National Award of Excellence we got by under CSR for education, both in — for rural education too. And these are some of the pictures you see that of all the CSR activities we do.

Right now, we are doing a skill development program in both the places in Damoh and Jhansi, and it is drawing a lot of crowds from the villages, especially for computer classes, the girls, the women empowering. They are coming to learn many things, and we are very happy is that our people are volunteering for that, and we are also investing to see to it that the rural folk quality of life is uplifted in the periods to go forward.

The outlook mentioned to you that COVID has been a very big teacher to us also. It gives us — it challenged us. It brought the best out of us, so I would say COVID has been a big teacher also to us. So despite all the turbulent weathers, we have learned many, many things, and we have matured far more to take on — if we can take on this pandemic, rest of the things we seem to be much more smaller. So we are much better prepared, much more versatile, much more, I would say, stable now.

Demand recovery in the infrastructure we will see after this new capex starts going in the government outlays. We’re just waiting for some trigger for the mobilization of resources to take it. Nevertheless, we have seen a strong demand all this time in the rural housing. And this rural housing has kept us up because HeidelbergCement India is more of — or the cement seller into rural markets. So we are focused most on the below Class B Tier and there is a Tier 1 to below Tier 3, Tier 4, Tier 5, so that is where the strength is, where the retail is and where the people respect quality also and people pay the price also for the quality.

The risk here is only of the hardening domestic fuel and the pet coke. As we speak today, also, the pet coke prices are hovering around $115, and we may see further push up on that. But I said that we have to find out ways and means to how to conserve energy and how to reduce our fuel. So we are working on that. We have taken up major measures to even now we will be studying our kilns and seeing that, you know, how — which are the places where we can improve over, I think, so this exercise will start now.

Improvement in liquidity conditions is going to happen as the government starts easing its pocket and starts putting the money. But the last quarter and the quarter after the COVID period based on the tightening of the fist at every level, and there was no money in the market, despite that, we have been able to carry out our business with all the respect and giving due respect to our channel partners and our business associates. So combined, we have as an entity, taken the organization and the society together to fight this COVID period, and still to keep our business on — going on and keep our heads above the water.

Implementation of labor codes are concerned. We are going to — we are implementing them, and it is in a steady phase. We want to remain compliant. And last but not the least, sustainability we have been there. Sustainability will continue and sustainability, in my view, has never been an option. It is a compulsion. If we do not follow sustainability issues, measures, ESGs and SGDs, if we do not comply with it, I am sure, we will not be into business in the long run.

So with this, I end my brief to you. And we’d be very happy — Anil and I will be very happy to answer your questions. Thank you very much.

Questions and Answers:

Operator

Sure. Thank you very much. [Operator Instructions] The first question is from the line of Chintan Sheth from Sameeksha Capital. Please go ahead.

Chintan Sheth — Sameeksha Capital — Analyst

Thank you for the opportunity. Hello, everyone. Hello?

Operator

Yes, you are online.

Chintan Sheth — Sameeksha Capital — Analyst

Yeah. Good afternoon, sir, and congrats for the decent set of numbers despite the circumstances. Sir, two sides of questions. One is on the recent MMRDA, that is mining bill, which now has allowed the mining lease transfer between the parties. Any thought process of the management for the — taking any sister concerns of Zuari Cement in over pool? [Phonetic] That is one.

And second is on the volume front, we are already at around 80% of the utilization this quarter. However, we see the medium-term growth looks a bit challenging given the capacity constraint. So any plans and thoughts there are we in terms of greenfield plans we were discussing a couple of quarters back?

Jamshed Naval Cooper — Managing Director

Okay. So Chintan, as we are going with your first question. Yes, there is some changes in the mining laws. This sets the base for future thinking on a combine — combining the company. But still, let the document come out properly, let the details be available in full clear form, and then we will definitely, in the years to come — in the coming short-term or near future, we will try to see how we do it because there is — within Zuari also, there is another company which is listed. So there are three entities as of now, but we will try to see that how do we optimize and get the best value for the shareholders. So that we are waiting for it. So once we get through it and when we know in our heart that we are not going to erode any — and/or we are not putting the Company to risk, then only we will take this forward and take any steps on that. That is one.

Number two, you said there was…

Chintan Sheth — Sameeksha Capital — Analyst

Near-term growth.

Jamshed Naval Cooper — Managing Director

…near-term growth. Okay. So on the near-term growth, we are running at 80% capacity utilization, I agree. Today, also, if I’m saying that if I was to do any major change in the plant. Last year, we did a major change, we added 1 million ton capacity, okay, in the month of March. Okay. Now we are — still, we are at 80%, and around 81% is might incur capacity utilization. So if I’m looking at 80% capacity utilization, I have still much more headroom to go even if the market grows by about 9% on a yearly basis — base of 7% or 9% on a yearly basis, I still have two years to go. Not for — not brought down by this particular feature that what further will we do?

We are already in the process of — you know that we have got a mining lease in Gujarat, which we are working on. Now we have started working on, we will go for MOEF clearances, and then we will look at this. In the meantime, if there are any opportunities which come our way of any acquisition or any mines which come up our way, which are conveniently located to us or near to our mine, we will definitely go for it. We are already doing the prospecting of the places which are adjoining to our mines. We are going to the government, seeking their permission. And if we can get some limestone around our plant, definitely, we will look at putting up a brownfield project. Since we have the cash — necessary cash for that, so we will — we are working on it. So this is what I can answer to you.

So there is no urgency, I would say, in the medium term. Yes, after three years, yes, I will have an issue three years later after that, but we are working on it.

Chintan Sheth — Sameeksha Capital — Analyst

Sure. And on the trade side, you did mention that you took a quarter on the non-trade side that the rates are better, and that’s the reason why our trade sales mix was lower. How are we seeing in terms of trade, non-trade demand in terms of — okay, obviously, we are looking to focus more on pricing start to choose between risky markets. So if you can provide the outlook on both trade and non-trade side would be helpful?

Jamshed Naval Cooper — Managing Director

So Chintan, it is like this, normally, today, normally, in Central India, on the NSR front — if I say, NSR front, usually, on an average, if I look at the industry [Indecipherable] data, it is about INR800 to INR900 difference between you will get lower realization by INR800 to INR900 in non-trade. Okay.

Chintan Sheth — Sameeksha Capital — Analyst

Okay.

Jamshed Naval Cooper — Managing Director

If we are getting a better deal, say, suppose in some places, we do get a deal which is about INR200, INR300, INR400 difference. Okay, we capture that. Okay. We are not running for them, but if we have some good ones, which come to us at a good price and good terms because we do not sell anything on credit, okay. So every payment with us in Heidelberg is 100% advance. So any non-trade business happens in our Company, first is the payment in the bank of Heidelberg and then only the material moves.

So we are very picky — choosy about our business, what we do. But still, we manage to see to it that if we get some — just only to — and these orders also we took just only to improve our capacity utilizations, okay? Yes, you will say that even if I am running at 80% capacity utilization, why don’t I take the INR900 even low orders also to improve the capacity utilization and improve the margin? Yes, I can do that, but I am doing it at the cost of putting to jeopardy the brand image of the Company and also erosion of the limestone scarce resources, which we will use it when the time comes. So if there is a peak period, I would like to run my plant at 100% utilization. If there is not a peak period, then I would say, okay, let us wait for three months — more months and then let it run the business for that.

Operator

Thank you, Chintan. Request you to join the question queue for any follow-up. [Operator Instructions] The next question is from the line of Manish Saxena from Pinebridge Investments. Please go ahead.

Manish Saxena — Pinebridge Investments — Analyst

Hello? Hi. Good afternoon, Mr. Cooper.

Jamshed Naval Cooper — Managing Director

Good afternoon.

Manish Saxena — Pinebridge Investments — Analyst

Okay. Sir, I have three set of questions. The first one is, you have put up a slide — a very nice slide on that ESG footprint. I just wanted to know from you, you’re thinking of putting a 5.5-megawatt solar plant and an AFR project, which is upcoming. Could you tell us that how much do you think this will reduce the CO2 emission, which is currently at about 511? Do you have a target in mind or this is just…

Jamshed Naval Cooper — Managing Director

Yes. No, it is a target. We have a target of coming down below 500 by 2030. This is our carbon footprint road map.

Manish Saxena — Pinebridge Investments — Analyst

Okay.

Jamshed Naval Cooper — Managing Director

So this is a 2030 target, which we — it will move very slowly because we are already at a very low level than the standards which are there at the moment, okay?

So if you look at the Indian cement industry, it is cruising around 580. From there, we are at 511, so it is a big jump. After this particular point, it becomes — the progress becomes much and much difficult unless we go for some more carbon capture technologies or things like that. So this will come down, but the target is that we have promised to the Group and our commitment is there on our road map that every year, we will reduce some CO2 emissions. And this will come down significantly if there is a change in the law, which allows us to add more fly ash into PPC — making of PPC. So we are very hopeful if that comes in, then we would be touching it immediately. So this level also, I will be able to touch, if I’m allowed to add another 5% to 7% more of fly ash and a little bit of things which we do will come down to close to about 500 odd.

Manish Saxena — Pinebridge Investments — Analyst

Okay. Okay. And you were talking about a carbon tax. Is that the thing that has already started in some European countries, or some other parts of the world?

Jamshed Naval Cooper — Managing Director

Absolutely right.

Manish Saxena — Pinebridge Investments — Analyst

And what would be that cost, sir?

Jamshed Naval Cooper — Managing Director

There it is about EUR30, EUR30. This was the — this EUR30 was the cost which they had put as on September announcement in Europe.

Manish Saxena — Pinebridge Investments — Analyst

Okay.

Jamshed Naval Cooper — Managing Director

And it is subject to revision. I think they will revise it in ’21, and this EUR30 may go to EUR35 now.

Manish Saxena — Pinebridge Investments — Analyst

Okay.

Anil Sharma — Chief Financial Officer

We are talking only from the euro point of view.

Jamshed Naval Cooper — Managing Director

Euro point of view.

Manish Saxena — Pinebridge Investments — Analyst

Okay. Okay, understood. Second, my second question is on these repairs that you had to do on this conveyor belt that you mentioned about. Sir, if I were to understand you right from your presentation, this was about INR9 crores to INR10 crores of capital expenditure, which was expensed in the quarter. Is that the way we should think about it?

Jamshed Naval Cooper — Managing Director

No. It is not INR9 crores to INR10 crores. So this is — the capex for this particular thing is — the total impact of this like my plant was shut down for almost 25 days, so I’m thinking out of cost — on the cost base.

Manish Saxena — Pinebridge Investments — Analyst

Yes.

Jamshed Naval Cooper — Managing Director

So cost is the investment and that was a part of our plan, okay? So that is not bothering me too much, okay. It is INR3 crores, okay, investment on the belt part.

Manish Saxena — Pinebridge Investments — Analyst

Okay.

Jamshed Naval Cooper — Managing Director

But if I put my WHR did not turn out almost 3 megawatts — almost 3 million units of power. My plant was shut down, okay. My fuel consumption went up during that period because I was running Line 1 and Line 2. My Line 1 is a very costly line in terms of fuel. It’s a guzzler — fuel guzzler. So — but that we do not operate it. We only operate it a maximum of about 100 days in a year. This is our target to keep it only line low. Only when there is a certain spurt in demand, we run that and make extra cement and use it. So if I add up to all these costs, it adds up to close to about INR80 to INR100 — between INR80 to INR90 a ton was my impact because of this shutdown.

Manish Saxena — Pinebridge Investments — Analyst

Okay. Okay, understood. And my final question is, sir, tax rate was low — slightly lower compared to the previous quarters. How much of the MAT credit is still in line with you for — you to take it in the future quarters?

Jamshed Naval Cooper — Managing Director

So, Anil, it’s like INR75 crores, correct?

Anil Sharma — Chief Financial Officer

So Manish, at this moment, we still continue the old income tax rate of 35%. And as on 31st December, we have around INR70 crores, INR75 crores unutilized MAT. And going forward, we will continue using the old tax regime of 35% until we utilize this MAT amount. So we are expecting that maybe next one or two years, depending upon the profitability, this will be utilized. Till that time, the tax expenditure you will see, the tax rate in the range of is 33% to 35%, and thereafter, it will significantly reduce to 25%.

Manish Saxena — Pinebridge Investments — Analyst

Okay. But right now, it is — INR75 crores is the unutilized amount?

Anil Sharma — Chief Financial Officer

As on 31st December 2020.

Manish Saxena — Pinebridge Investments — Analyst

Okay. Thank you very much. Thanks a lot.

Operator

Thank you. The next question is from the line of Simran Bhatia from SMC Global Securities. Please go ahead.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Yeah. Thank you for giving me the opportunity. See, I have a couple of questions. First of all, I want to ask that, you’ve just stated — I mean, you just stated that your EBITDA margin will be — bounce back to 23%. Can you status — means how much time it will be bounced back, whether it’s in the short-term or in the long-term, means in the next one-year? And — yes?

Jamshed Naval Cooper — Managing Director

[Speech Overlap] So, Simran, the thing is what I was telling you that even today, if I was to take off these one-off expenses and add up to this, then also I’m at 23% only today.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Okay. Okay.

Jamshed Naval Cooper — Managing Director

So it is not that I am going to bounce back. I’m already there, had these one-off expenses not coming.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Great. Sir, second question is, you know, for the first nine months, your interest cost has bring down to INR41 crores from INR57 crore, which is almost a decline of 28% in the first nine months when we are comparing with the YoY. I just want to ask that — I mean, in the upcoming years, can we see this run rate, means your interest cost is going to come down very, very sharply going forward?

Jamshed Naval Cooper — Managing Director

Yes, it should because as I said, now only interest-bearing loan because of the non-convertible NC is only INR1,200 million, so that is the only one on which it will be interested. The rest is all — there is no interest-bearing any amount with us.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Okay, great, sir. And sir, my last question is, what is the percentage from your euro — premium segment contribution in the revenues? Because last time, you have stated that you were targeting for 25% in the premium segment, so are you [Indecipherable] means the in tact target you are going to have, I mean, if you can?

Jamshed Naval Cooper — Managing Director

So Simran, you know, you have seen in our Slide 7, we are close to 22% of our trade volume.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Okay. Okay, that’s great.

Jamshed Naval Cooper — Managing Director

So we are — where our trajectory is okay, I would say.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Great, sir. And sir, any expansion plan further, means in the new geographies or means existing will go on?

Jamshed Naval Cooper — Managing Director

As I said in the beginning that we are looking at our — now Gujarat project. Going forward, we will look at possibility of — if there is some limestone additional available in a year or so after the — this whole prospecting of this place takes place and if we can acquire that mine, then we will put up something here only, and either try to improve these kilns or something like that and try to add about 1 million ton more around this place. And if it is to be going, then it will go in a multiple of 3 million only.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Okay. Thank you, sir. Thank you for you answering the questions and your — all the best, to you.

Jamshed Naval Cooper — Managing Director

Thank you, Simran.

Anil Sharma — Chief Financial Officer

Thank you.

SimranJeet Singh Bhatia — SMC Global Securities — Analyst

Yeah.

Operator

Thank you. The next question is from the line of Raghav Maheshwari from Asian Market. Please go ahead.

Raghav Maheshwari — Asian Markets — Analyst

Hello? Good afternoon, sir. Sir, my question is our number for the nine-month EBITDA per ton and the EBITDA in millions, absolute number is very much lower as compared to our peers, even compared to nine months on FY ’20 basis. What is the reason behind that? This is any geographical barrier to us or otherwise, the realization is our peer — our [Indecipherable] shifted the volume into the non-trade?

Jamshed Naval Cooper — Managing Director

No, no. This is — you have to — we are predominantly a central India player, so if you are comparing our EBITDA with all India players, then it is not a fair comparison.

Raghav Maheshwari — Asian Markets — Analyst

But sir, companies like Prism and Vikas, [Phonetic] they’re operating in that area, their per ton is better from us, so that’s why.

Jamshed Naval Cooper — Managing Director

So you take the last five years’ average and then you compare it and then you see, then you tell me that if we are lower than it. My total EBITDA earnings during the last five years — my revenue compared to any other company in this region, you will find the difference straight away.

Raghav Maheshwari — Asian Markets — Analyst

And sir, my question — but my question is because the Central and Eastern UP is basically the market where your Company is generating good realization as compared to other like North India. Sir, this is my — so that’s why my question, why our realization year-on-year basis drop because of the volume or something which we are shifted to non-trade much from trade?

Jamshed Naval Cooper — Managing Director

No, no. We have not shifted at all from trade to non-trade. It is just only this one. Otherwise, we have been — if you look at my gross realization, it has grown by 2.5% over previous — on a nine months’ basis.

Anil Sharma — Chief Financial Officer

Raghav, you will appreciate that there is an increase in the realization during the quarter by 5%. And even if you compare the full nine months, then also, you’ll see the increase in the realization by 2.5%.

Raghav Maheshwari — Asian Markets — Analyst

Yes, sir. That’s definitely increased in the realization. But for EBITDA is like not increased year-on-year and quarter-on-quarter, both basis.

Jamshed Naval Cooper — Managing Director

So — exactly. When we are operating at a very high level, we have been at INR1,100 for the last so many quarters, okay, whereas our peers were operating at somewhere around INR800, so that is also to be seen.

Raghav Maheshwari — Asian Markets — Analyst

Yes.

Anil Sharma — Chief Financial Officer

Raghav, in your — our presentation, in Slide number 6, we have shown this waterfall. And this waterfall, you will see that there is two areas where the negative variance is there. One is the power and fuel and another is the others. And what Mr. Cooper also explained in the — his opening remarks that there is one-off item, which happens only eight to 10 years in the life of the Company, where we replace this overland belt conveyor. It is — the overland belt conveyor is the longest one, 21-kilometer, and both the sites put together, total size of the belt is 42. Out of 42, we have replaced 20 kilometers this year — in this quarter, and the remaining 22-kilometer will be replaced in the second or third quarter of the calendar year 2021.

And during this eight to 10 years’ time when the replacement happens, we have to take the longer shutdown for the — our largest kiln, which is from the fuel and the power point is the efficient kiln. And that impact put together of the power and fuel and the request maintenance is coming 80 basis points to 100 basis points, basically on the INR80 to INR100 per ton on the total operation of the Company this quarter.

If I eliminate this one-off item, then our EBITDA per ton, which is at this moment in the waterfall shows around INR950, that will be INR1,050. Then it’s very comparable from the — after eliminating the one-off item. And that, we actually try to explain this, this is the things which happened this quarter and after 10 years, and again, it will come. And the remaining part of the belt when we replace, that time also a little bit adjust will come with respect to EBITDA pattern. Overall, if you see volume growth is there, price growth is there, and we try to optimize the cost wherever possible.

Raghav Maheshwari — Asian Markets — Analyst

Okay. Thank you. Understood, sir. Thank you. Thank you so much. All the best.

Jamshed Naval Cooper — Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Sumedha Srinivasan from ICICI Prudential AMC. Please go ahead.

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Hi, sir, thanks for taking my question. Sir, my question was, right now, I understand that the debt is roughly around INR3,550 million as of December end. Can you help us with what the similar number was as of September end?

Jamshed Naval Cooper — Managing Director

September end? September was at the [Speech Overlap]

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Just to see the quarterly number.

Jamshed Naval Cooper — Managing Director

For this, you had INR1.25 million.

Anil Sharma — Chief Financial Officer

INR1.25 million.

Jamshed Naval Cooper — Managing Director

We had this INR1.25 million on 16 December 2020, that amount we have paid. So our debt — gross debt reduced by INR1.25 million as on 31st December. So INR4.8 billion.

Anil Sharma — Chief Financial Officer

INR4.8 billion, correct.

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Okay. Okay. And my second question, so I think in the media release, in the results, it’s mentioned around INR5,700 million of cash as of December end. As of September end, it was around — it was a little higher, is it? Because I think the media release mentions cash balance increased to INR5,700 million, so I just wanted to check what are the cash balance in the previous quarter to see the number.

Anil Sharma — Chief Financial Officer

You want to know as on 30th of September, what was our cash balance?

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Yeah. If I’m not wrong, I think, it was around INR5,720 million.

Jamshed Naval Cooper — Managing Director

INR5,720 million.

Anil Sharma — Chief Financial Officer

So it was around the similar lines of the 30th September. And during the quarter, whatever we have optimized on account of profitability, that amount has been used for the repayment of the loan.

Jamshed Naval Cooper — Managing Director

[Speech Overlap]

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Right. Okay. So just one last question from my end. The AFR as well as solar projects that are coming up, what is the capital outlay plan for these two?

Jamshed Naval Cooper — Managing Director

See, that this is one — this is on — purchase power is on capex. There is no capex on this one, but there is a capex of about something like INR20 crores on our AFR. On the solar power, it is on a BOT basis.

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

On a growth capital kind of basis, right?

Jamshed Naval Cooper — Managing Director

No capex.

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Okay. And this INR20 crores in AFR has some already been spent in this year? Or will most of it come up only in FY ’22?

Jamshed Naval Cooper — Managing Director

Most of it is — you know, this is gradually underspending and somewhat will be spent over a period of another coming six months. So about INR7 crores, INR8 crores [Speech Overlap] already INR7 crores, INR8 crores has been done and about another 13 — INR12 crores, INR13 crores will go out in the coming seven, eight months.

Sumedha Srinivasan — ICICI Prudential AMC — Analyst

Okay. Okay, got it. Thank you, sir. Thanks.

Operator

Thank you. Next question is from the line of Amit Srivastava from B&K Securities. Please go ahead.

Amit Srivastava — B&K Securities — Analyst

Yeah. Thank you for the opportunity. Sir, just want to understand about the Line 1, which you’ve discussed. So what is the capacity of that Line 1? Second thing is that how inefficient versus Line 3 in terms cost difference if you can give us idea on a per ton basis?

Jamshed Naval Cooper — Managing Director

Okay. Line 1 is just only 1,600 to 1,700 TPD. It’s a very old plant. It is the first line of the Company, so it is there. Inefficiency wise, if you look at in terms of heat consumption, it will absorb about 3.4 gigajoule, whereas this will be 3.1 gigajoule on a Line 1 — Line 3 basis. So this is the inefficiency on the thermal power plant — thermal also.

Anil Sharma — Chief Financial Officer

And power-wise also.

Jamshed Naval Cooper — Managing Director

And power-wise also, it will consume far more energy than Line 3. So if Line 3, if I can may incur at something like around 65 units, this will take to around something like 80 units.

Amit Srivastava — B&K Securities — Analyst

Okay. So whenever we’ll run at the peak level like on a peak quarter, then we’ll have to operate the third line also — this Line 1?

Jamshed Naval Cooper — Managing Director

Sometimes we have to operate it because if you keep it lying also, sometimes you have to use it because otherwise, it will get rusted.

Amit Srivastava — B&K Securities — Analyst

Okay.

Jamshed Naval Cooper — Managing Director

So it will be a major write-off then. So we have to keep it in good position also to keep it oiled and working at any point of time. But it is a really big savior for the Company. Whenever it is required or something, Line 3 goes down or something major maintenance comes up, Line 1 is the supportive line.

Amit Srivastava — B&K Securities — Analyst

Okay. Second sir — thing, sir, on a premium cement, which we are now keep on increasing on our overall content. Sir, just wanted to understand versus our product was already premium, so this premium product is how much difference we are realizing in terms of the net?

Jamshed Naval Cooper — Managing Director

So in terms of net, you get at about something like INR15 a bag more. [Speech Overlap]

Amit Srivastava — B&K Securities — Analyst

INR10, INR15? [Phonetic] Sorry, sir. Hello?

Jamshed Naval Cooper — Managing Director

Yeah?

Amit Srivastava — B&K Securities — Analyst

No, I just missed it. How much you said, sir?

Jamshed Naval Cooper — Managing Director

About INR10 to INR15 — INR15 on power and about INR10 on the other belt.

Amit Srivastava — B&K Securities — Analyst

Okay, fine. Okay. Thank you, sir. That’s it from my side.

Operator

Thank you. Next question is from the line of Manoj Shah from Laxco Investments. Please go ahead.

Manoj Shah — Laxco Investment — Analyst

Yeah. Thank you for [Technical Issues] the energy mix, s you said that the target would be to use the pet coke and the coal in the ratio of 50% to 52%. Any other alternative fuel are you looking at so that you have a dependency on this price fluctuation is minimized kind of it, maybe like the municipal waste or RDF and so on kind of thing?

Jamshed Naval Cooper — Managing Director

So Manoj, on this AFR, as I said, that we are going to look at right now, in the initial stages, we are looking at biomasses. We are talking to the municipal corporations around us. So there is one case where they have said that they can provide us municipal waste, and we are looking at it. And the thermal substitution which will happen is beginning with about 3% and it will go to about 8% to 9%, or 7% to 8% it will go to on the thermal substitution part. This is phase one.

Once we are clear that so much of extra amount of AFR is available, that will consume about — close about 44,000 to 45,000 tons of alternate fuels in this material. And once we are clear that we are able to get these type of fuels available as AFR, then we will put up the second line, which will take us to add up to another 4% to 5% another TSR substitution can happen about 5%. So we are targeting about 12% to 13% of AFR in the medium term.

Manoj Shah — Laxco Investment — Analyst

Okay. Because sir — because the price — pet coke prices keep on fluctuating and this will cause your stable source of unusable [Technical Issues] with not much of a price variation, as well as premium margin is similar kind of it. [Phonetic] And I have seen that some of the cement companies like I visited one company in Egypt, they were using this RDF and these things previous, [Phonetic] so they were having a plant of around 5 million tons. So it has been a companu were already using it across the globe.

Jamshed Naval Cooper — Managing Director

Yeah. So, Manoj, this AFR is not — sometimes, it becomes a costly affair also. But the advantage only of this is that on the sustainability side, it gives you a better footprint.

Manoj Shah — Laxco Investment — Analyst

Yeah. You can change the mix depending on which one is cheaper kind of it and probably you can switch between the two because that’s how [Speech Overlap]

Jamshed Naval Cooper — Managing Director

It’s not easy — the AFR business is not easy. It comes with a lot of pain. There is a lot of handling required. It is a very smelly waste, so you have to maintain a lot of hygiene factors while using AFRs. So it looks like it is very easy to say that you put in AFR, but then AFR has to be having a certain calorific value also. You just cannot put up into the kiln — into a preheater area, into calciner something, which you will diffuse the fire. It has to add up to the fire.

Manoj Shah — Laxco Investment — Analyst

Okay. Thank you.

Operator

Thank you. [Operator Instructions] Thank you. The next question is from the line of Amit Murarka from Motilal Oswal. Please go ahead.

Amit Murarka — Motilal Oswal — Analyst

Yeah. Hi. Thanks for the opportunity. Good afternoon. Sir, I just had two questions from a competitive landscape point of view, one near-term and one longer-term. So near-term, like what we have been hearing is that because of the many rate scheme, some volumes are coming in from South and longer distances. So I just want to understand what kind of the impact is it having on the regional demand, supply and pricing dynamics?

Jamshed Naval Cooper — Managing Director

So Amit, we are facing consistently the influx of materials coming from neighboring states. Earlier, it used to be about 100,000 tons. Now it has reached to about something like 10 lakh tons of material is coming in from different, different states. But the demand of the state has continuously grown, so to that extent, we have been able to — but the domestic players of this market have been able to balance their portfolio and continue their shares in the market. So it definitely it is pressure there, but we can’t help it. These pressures will continue. We have to continue to stay with our team of dealers, our channel partners and keep our business going on.

Amit Murarka — Motilal Oswal — Analyst

Okay, sure. Understood. Also, like in the medium to longer-term, there seems to be quite a few new clinkers coming up in the region. So ACC, Ametha, and UltraTech is coming up, plus now even JK Cement has announced some more capacity. So like what do you think the competitive landscape will be or will the region be able to absorb all these new capacities in a two, three-year timeframe?

Jamshed Naval Cooper — Managing Director

As I see, this market will continue to grow about, if I’m not mistaken, to be very safe also, it is 7% to 8% — 6% to 7%, 8% it will keep growing. This market should not have a problem for Central India. But most of the capacities, which are coming out in the Eastern part of this region, that flows into Eastern side, okay, that goes to finds its way into Bihar. So you will find that most of these capacities if they come also in the Eastern side, they will flow into Bihar and go towards East, which is a deficit market.

Amit Murarka — Motilal Oswal — Analyst

Okay. Okay, sure. Perfect. And on your Gujarat capacity, like any timeframe which you’re looking at to start work on it?

Jamshed Naval Cooper — Managing Director

Amit, we have started work on it. We are now in the process of filing our TOR, getting our TOR, environmental studies and things like that, that work has commenced.

Operator

Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead.

Ritesh Shah — Investec — Analyst

Yeah. Hi, sir, thanks for the opportunity. sir, just continuing to the prior question on Gujarat. Sir, what are the timelines that we should look at over here? And are there any particular variables which will decide whether we are going ahead with the project or not?

Jamshed Naval Cooper — Managing Director

See, there is no question of we are not — there is no question on that we are not going ahead with the project. We are going ahead with the project. We are in the process of getting our clearances. Environmental clearances take their own time.

Ritesh Shah — Investec — Analyst

Okay. Sir, would it be possible to highlight the scope of the project, probable capital outflow and the capacity over here?

Jamshed Naval Cooper — Managing Director

You can say it will be about a 3 million-ton plant, to begin with.

Ritesh Shah — Investec — Analyst

Okay. Okay, that helps. Sir, my second question is, how different is our distribution channel as compared to the peer set? Is it like it goes to distributors and dealers? The reason I’m asking this is one of our peer companies, they have started to sell material directly from the depots. Is this something which is a common practice? How should one understand this, sir?

Jamshed Naval Cooper — Managing Director

See, there are two things in this. One is directly. There the process follows like this. In cement industry, you have a warehouse, you have a dealer, and you have a retailer, okay. I think Heidelberg was one of the early companies, which has been into going directly to the retail also. So virtually, like Heidelberg — in Heidelberg, where the material is sold, okay, every salesperson knows about it. So we keep a record of each and every outlet. Although we do not enjoy a direct relationship with them but we know where the material is sold, and we have got a relationship at that level.

It goes to the dealer, but most of the orders, I would say, 80% of the orders or rather 90% of the orders are directly supplied to the retailer or to the place of consumption. There is few orders which go through a route that is a truck that where the dealer wants the material, please send the material to my place and I will distribute it in small, small lots. That is the only time the material goes, but if there is a truckload order or at least half a truckload order, it directly goes and lands into the consuming center.

In terms of our — you said that amount of our warehouse movement, we have certain places where we move only by rail. This is the only place where our cement passes through the warehouse. Otherwise, it is directly from the plant directly to the place of use.

Operator

Thank you. Next question is from the line of Arijit Dutta from Axis Capital. Please go ahead.

Arijit Dutta — Axis Capital — Analyst

Hello, sir, one question. Sorry for my ignorance here. You just mentioned that the conveyor belt of 21 kilometers, is only half of the total 42-kilometers belt, where you are taking a shutdown once in a eight-year kind of thing. But curious to know that why we are taking it in two phases? Because, again, a 20-day shutdown will happen in May, June. Why can’t we do it together because the opportunity cost to higher than the capex cost here?

Jamshed Naval Cooper — Managing Director

It is not — if you see, it is the way of the construct of the belt is such. You cannot do everything in one shot. The shutdown would have been doubled. There is a method of pulling a belt and laying it. So there is a technical issue in this, so we have to do it and the belt is into three stages, okay? So we have two transfer points, okay. So we have to manage this part. It is — if you come to the site, then you will come to know that to put up the belt of that magnitude, the time which we have taken — in fact, when the project started, to put up this same belt has taken almost three months because that was — and we were not experienced, but now with the experience, we have been able to reduce the time span.

Arijit Dutta — Axis Capital — Analyst

Perfect, sir. Got the answer. Thank you, sir.

Jamshed Naval Cooper — Managing Director

Thank you.

Operator

Thank you. Next question is from the line of Amish Kanani from JM Financial. Please go ahead.

Amish Kanani — JM Financial — Analyst

Yeah. Hi, sir. Sir, given our spare capacity and capacity utilization at the current point, is it possible to give us a directional view about the growth next year, maybe not in the quantum terms, but directionally? Will we be — and given our mix of trade and non-trade and the kind of demand that is emerging post-budget, is it possible to give us some sense of directionally whether we grow better than the market or we may not be able to participate at the market rate growth till say [Speech Overlap]

Jamshed Naval Cooper — Managing Director

Definitely. So, Amish, I can only say that we have grown a little better than the market trend, and we will continue to grow that way only. In terms of trade and non-trade bifurcation, it will fluctuate between — we have gone as high as 95% in trade also. And we have gone as low as 75% also. But now we have fixed up a certain that we will try to remain above 80%, we’ll not go below unless the government demand is so good and you start getting orders at a very good price under non-trade, then we can increase our non-trade and improve our capacity utilization. So this will be our way forward. But definitely, the trajectory of positive trajectory will only remain.

Amish Kanani — JM Financial — Analyst

Yeah. Because, sir, last quarter, we got a sense that we want to participate in a profitable trade segment, and hence, we may not want to chase the growth. So are we looking at, say, a volume versus EBITDA per ton kind of a mix? How is the — so you’re saying you will not shy away from taking growth from non-trade, if it is reasonably profitable and [Speech Overlap]

Jamshed Naval Cooper — Managing Director

Reasonably profitable and you know, comes to on our terms. Basically, there are in non-trade, you have to sometimes people give — you have to give also credit of 60-60, 80-80 days, okay. We do not want to put our money into those baskets.

Amish Kanani — JM Financial — Analyst

Okay.

Jamshed Naval Cooper — Managing Director

I am clear about it that the cost of recovery is far more than the cost of sales. The salesmen — person whose each call cost the Company almost INR600 a call, if he is going to sit for half a day in the shop to recover money, when he is going to sell? So this is the biggest problem of the cement industry. So we prefer that the money is with us, if we get a good price, if the money is with us, then we should go for it. Otherwise, we will — in the long run, we will lose whatever we have in trade also.

Amish Kanani — JM Financial — Analyst

Sure. And sir, just as a related question. Is the EBITDA per ton there is say between INR800 and INR1,000 or maybe below INR800 and hence, we don’t want to participate?

Jamshed Naval Cooper — Managing Director

No, no. There is no — there is never an issue of the participation of INR800. When the markets are bad, we even participated at INR800. See, it depends on the overall scenario of your basket. If your basket is loaded more on the INR1,000 side plus or INR1,100 side plus then you don’t mind taking a little bit on the lower side. But if your entire basket is coming to INR700, INR900, then you start pushing yourself on the upper side.

Operator

Thank you. Next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead.

Gaurav Rateria — Morgan Stanley — Analyst

Hi, sir. Thank you for taking — giving me a chance. Two questions. Sir, firstly, just to get a better understanding of the total market size, which we cater to, would be around 45 million, 50 million tons annually, and roughly 25% of that is being catered by influx of material from other states. Is that a correct understanding?

And secondly, you were mentioning last time about expectations of prices moving up post the festive season. Somehow it looks like it has not happened. Any particular view on that? Is the price hike getting delayed despite demand being pretty okay? Thank you.

Jamshed Naval Cooper — Managing Director

So Gaurav, to answer this movement about which is influx of material, which has now become — now we cannot say even influx because these people have become now gradually common players in the market. So it is about 15% to — 15% of the material comes from outside now, which were non-traditional players earlier, about 15% is from their side — 15% yeah. 15 — I would say maximum 20%.

With respect to the other point you mentioned was — what was the other point, Gaurav? Sorry, I missed it.

Gaurav Rateria — Morgan Stanley — Analyst

Sir, I said that you were indicating last time price hikes to happen [Speech Overlap]

Jamshed Naval Cooper — Managing Director

Okay. Price hikes, okay. So the price hike has unfortunately been a little delayed for the simple reason that the winters were severe. There was a little bit of disturbance in the market on cash flow also. There has been a little depression also had come in the month of November, okay. But December again soft, January was a little softer, February is again looking up, okay. So things like this, if we are going through then I’m saying that prices — anyway, for your information, we have already taken a small price increase in a day before, which is gradual and in the next weeks to come also we will start taking some small, small increases depending on it which will not be across the state, it will be on pocket-to-pocket, deciding on the availability of material, how the pull is coming. So if we are — if there is a market, there is a drag, then we will go slow, but if there is a pull in the market, then we will go a little positive.

Gaurav Rateria — Morgan Stanley — Analyst

Thank you, sir.

Operator

Thank you. [Operator Instructions] The next question is from the line of Kamlesh Bagmar from Prabhudas Lilladher.

Kamlesh Bagmar — Prabhudas Lilladher — Analyst

Hi, sir, thanks for the opportunity. Sir, just one question on the part of our limestone reserves, which we have. So as we have now better visibility on the mine side, so current resource can suffice for how long, sir, given the current capacity which we have?

Jamshed Naval Cooper — Managing Director

About 27 to 28 years.

Kamlesh Bagmar — Prabhudas Lilladher — Analyst

Okay. And like say, the grade of reserves which we have, so would we be required to source some sweeteners from the outside? Or it would be entirely met through for the internal mines — mine reserves?

Jamshed Naval Cooper — Managing Director

About 3.5% to 4% of sweeteners we sourced from outside.

Kamlesh Bagmar — Prabhudas Lilladher — Analyst

Okay. And lastly, sir, I know that this question has been repeated many times now. So on the Gujarat side, what can be the timeline from now, like, say, is it three years, four years? How long can we — like, say, what could be the timeline for commissioning of that project?

Jamshed Naval Cooper — Managing Director

See, everything depends upon — there are two things in a project which matter. One is the environmental clearance, okay. That takes the maximum amount of time, okay. Once that is through, then you have to go for land purchase and then you have to start building the plant. So even if you acquire 20% of the land, once you get the MOEF clearance, then you start building up the plant. So yes, it can take about three years. Two years only, I will think — I don’t think within — before two years, we will get even the MOEF clearance.

Operator

Thank you. [Technical Issues] Raginwar from Centrum. Please go ahead.

Milind Raginwar — Centrum — Analyst

Thank you, sir, for the opportunity. Just one thing is on the current clinker capacity would be around 3.75 million ton, is that the right understanding, including Ammasandra?

Jamshed Naval Cooper — Managing Director

Plus 3.5 million ton.

Milind Raginwar — Centrum — Analyst

3.5 million ton. At Damoh or it is including Ammasandra?

Jamshed Naval Cooper — Managing Director

Only Damoh.

Milind Raginwar — Centrum — Analyst

Okay. So…

Jamshed Naval Cooper — Managing Director

Only Damoh.

Milind Raginwar — Centrum — Analyst

Okay, sir. So I just wanted to understand, in case of weather — when we were peaking of some buoyancy coming back in demand, we will be free to get clinker purchases in case, we want to get higher cement reproduced, or?

Jamshed Naval Cooper — Managing Director

I’m not pretty sure whether you will get clinker. Clinker is not a tradable commodity these days. People don’t want to sell clinker.

Anil Sharma — Chief Financial Officer

But Milind, you’ll have to say that this 3.5 million ton capacity is sufficient at this moment. And at the same time, last time, we explained that we are working for some debottlenecking on the clinker side, so a small debottlenecking that also will support a little bit only our clinker availability. So we don’t foresee that, okay, for the purpose of 5.75 million ton, our grinding capacity will need to have clinker purchase from the outside.

Milind Raginwar — Centrum — Analyst

Okay. And sir, just — sorry for my ignorance. I wanted to understand is the [Indecipherable] expenses are, how much of that would be there in the other expense? You said that we had only INR3 crore of I think spent for that purpose. Is that what I heard correctly?

Jamshed Naval Cooper — Managing Director

Yes, yes.

Anil Sharma — Chief Financial Officer

Yes, correct.

Milind Raginwar — Centrum — Analyst

So for the other expense increase that we see in the quarter, whether sequentially or on a year-on-year basis, is attributable — attributable to any specific thing, sir, apart from this?

Jamshed Naval Cooper — Managing Director

Other than fuel and other maintenances, which has gone up during that period because when this — when the line was taken for shutdown, we did a lot of maintenances also.

Anil Sharma — Chief Financial Officer

And Milind, this INR10 crores — you are referring to this INR10 crores increase in the other expenditure as compared to corresponding quarter of last year. Is that question?

Milind Raginwar — Centrum — Analyst

No. I am looking at it from an — sir — yeah. Percentage perspective, probably, yes, it’s about this. But then in terms of the volume, we are more or less there on, so just wanted to understand INR3 crore is most of there, so — yes, maybe that’s [Speech Overlap]

Jamshed Naval Cooper — Managing Director

So you’re right that there is the increase of the INR10 crores in other expenditure. But this other expenditure includes all the kind of repairs maintenance, stores consumption, administrative costs as well as the handling cost of the cement and clinker. So volume increased during the quarter of around 4%. So that also we need to factor to write the real increase of the other expenditure. And on top of that, this INR3 crore of the repairs maintenance in addition to that, that also part of this INR10 crore idea. [Phonetic]

Milind Raginwar — Centrum — Analyst

Okay. Okay, all right, sir. Understood. Yeah. Thanks for this.

Operator

Thank you. Ladies and gentlemen, due to time constraints, that would be our last question. I now hand the conference over to Mr. Vaibhav Agarwal for closing comments. Thank you, and over to you, sir.

Vaibhav Agarwal — PhillipCapital (India) Private Limited — Analyst

Yeah. Thank you, Aman. On behalf of PhillipCapital (India) Private Limited, I would like to thank the management of HeidelbergCement India Limited for the call, and many thanks to the participants joining on the call. Thank you very much, sir.

Aman, you may now conclude the call.

Anil Sharma — Chief Financial Officer

Thank you.

Jamshed Naval Cooper — Managing Director

Thank you, everyone.

Operator

[Operator Closing Remarks]