Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
India Cements Ltd (NSE: INDIACEM) Q4 2026 Earnings Call dated Apr. 27, 2026
Corporate Participants:
Atul Daga — Business Head and Chief Financial Officer
K. C. Jhanwar — Managing Director
Analysts:
Rahul Gupta — Analyst
Pulkit Patni — Analyst
Prateek Kumar — Analyst
Amit Kumar Murarka — Analyst
Indrajit Agarwal — Analyst
Raashi Chopra — Analyst
Satyadeep Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the UltraTech Cement Limited Q4FY26 earnings conference call. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr.
Atul Daga, Chief Financial Officer for opening remarks. Thank you. And over to you, sir.
Atul Daga — Business Head and Chief Financial Officer
Thank you. Good evening to everybody. I want to begin not with numbers, but with where we stand as a company. Because fiscal 26 in my view, is a year that will be looked back on as a genuinely significant in ultratech story. And fiscal 27 started with an achievement of major milestones. UltraTech cost 200 million tons of cement production capacity in India, a first for any company in a single country outside of China. Let me put this in context. We reached 100 million tons in 2019, added another 50 million tonnes in five years by 2024, and we completed the journey from 150 to 200 million tons in less than two years.
This is a feat even more remarkable since we are a full year ahead of our targets as what we had set for ourselves. Let’s be clear on what the number means. It’s not simply a headline, it’s an expression of a strategy to build scale that compounds in cost efficiency, in market reach, in raw material security and in sustainability. Every ton of capacity we add reinforces every ton that came before it. Let’s look at our position globally outside of China. Ultratech is today the largest cement company in the world by sales volume and we are the only cement company anywhere in the world to have over 100 million ton of production capacity Within a single country, we are 200 million tonnes.
These are not rankings we have stumbled into. These are the results of a very deliberate strategy. Disciplined organic growth, timely acquisitions at the right price and a relentless focus on execution. From somewhere 65 million tonnes in 2016 to 200 million tonnes today. We have more than trebled our capacity in a decade. Our next horizon is already set. We have committed to add a further 37 million tons which will take us over 242.5 million tonnes in a phased manner by fiscal 28th. Now I want to speak to something that is very much on everybody’s mind.
The conflict in West Asia and what it means for us. Whilst I have given an indicative chart in our presentation on where the impact of these rising prices could be, let’s be straightforward. It’s a real headwind on fuel cost, packing bags and freight, on certain import dependent supply chain, on near term sentiment in some demand segments and the way all oil prices are, we could see an increase in domestic prices of petrol and diesel. The government’s monthly economic review for March 26 also acknowledged that the outlook has become slightly uncertain and yet India’s structural growth story is entirely intact.
Government CAPEX is flowing, Infrastructure liquidation continues. Housing demand is robust. IMF has also raised the growth forecast for the country. Just to rattle some numbers out for you, India did approximately 10,660 km of highways in fiscal 25 and has maintained the pace in 26. The Pima housing program is driving cement consumption at scale. That tells us something important about the underlying demand base on the construction cost environment. Cement prices have been largely stable in the last financial year with movement of maybe 0 to 5%.
Steel prices have seen volatility. West Asia situation is near term cost moderator, not a structural demand reversal and we believe Ultratech with our domestic strength, our 1.8 gigawatt green energy platform, our scale driven cost efficiency is better positioned, much better positioned to manage through this environment as well. Fiscal 26 was a year of extraordinary execution. We crossed 200 million tons, we completed brand migration for both India Cement and Ksoram ahead of schedule. We continued building our green energy capacity and we delivered volume growth and improved profitability.
We said we would do things. These things, we have done them and we enter fiscal 27 in a stronger strategic position than at any point in our history. Let me look at the Q4 performance and the full year performance and we’ll also share some insights on the integration stories and our cost efficiency program. Consolidated sales volumes as you have already seen has crossed a rocking 44 million tonnes this quarter. Most important aspect about it to note is that Ultratech as a brand year on year has grown 19%.
Nobody can take away that thunder from us. Realizations improved during the quarter. Gray cement pricing sent in about 2.5% in most geographies supported by an improving trade mix and premiumization. A blended cement share premium portfolio contribution both moved higher which is a conscious and a deliberate strategy going forward. EBITDA per ton excluding acquired assets is at 12.96 per ton for the quarter. For the context this metric was 1225 in Q4 25. The trajectory has continued on an aggregate basis we have reported 1253 rupees per ton in Q4.
26 this if I were to split between India and overseas. Thanks to our UAE operation doing very well, they have contributed substantially but India has been no less. Remember, the India capacity is almost 196 million tons. During this year, if I were to remove the aberrations of West Asia crisis, we have achieved EBITDA per ton of very close to 1240 rupees per ton. What am I knocking out from here? The last month increase in cost of bags and impact of exchange loss, the highly volatile and the frantic devaluation of rupee that happened in the last month.
So I believe we have done very well on EBITDA per ton as well. Our renewable energy platform has been growing from strength to strength. Today we are almost at 43% of our power needs being met from green sources. We have committed to reach about 85% of our power requirements from green energy by the end of fiscal 2030 and we are very confident of reaching that position. On the fuel side, we are actively managing our mix, optimizing between Petco coal, alternative fuels and increasing the share of domestic coal wherever possible.
On the logistics front, our lead distance has reduced to 367km. Our ever expanding bulk terminal network including the new DuckNow facility and other facilities are helping us reach the customer faster, thus helping us reduce our lead distance and our overall costs. Let me spend a few minutes on the two acquired businesses but the progress is I believe fantastic. Brand Migration 100% brand migration has been completed. At the end of March 26 in second quarter fiscal 26 we were at 31% of ICL volumes and 55% of Ksoram volumes were carrying Ultratech brand.
December 25 they had moved to 58 and 59%. We have completed at the exit of March 26 100% brand conversion. The EBITDA trajectory. India cements EBITDA of 457 rupees per tonne in Q4 26 up from 333 rupees in Q2 and 305 in Q3. Sequential improvement every quarter since acquisition. This quarter the company declared a pact of 6,60 crores for the quarter which has been after a very long time. And this Dh497 EBITDA pattern. Please understand how we read it. We as you know, under the related party transactions we had put in place a tolling arrangement.
ICL or India Cement manufactures and sells the Ultratech brand but does not carry any direct marketing and distribution costs. Those sit with us at the consolidated level. At Ultratech we charge a markup per bag on ICL volumes which offset that element on a net basis. So India Cement’s underlying operational progress towards ultratech system is much higher than 497 per tonne and the price improvements, selling price improvements that happen in the southern markets will give it a further boost. The investment phase is now underway.
We had committed 1592 crores for India cements for efficiency improvement plus another 400 crores for capex on capacity expansion. This definitely is going to take us over thousand rupees per ton as committed by the end of fiscal 28. We are spending 400 to 500 crores for Ksoraam cement assets. They are already operating at 1000 rupees EBITDA per ton more or less in line with the other cement operations in South. These two assets today represent about 13% of our consolidated capacity. They are moving from integration drag to earnings contributor.
As their cost improvement CAPEX matures they will be a meaningful and growing source of group level EBITDA accretion. Let me now look at how we see fiscal 27 and beyond. We expect a sustainable volume growth of 7 to 8% per annum. The structural drivers are firmly in place. India’s urbanization story, the government’s infrastructure commitment. You would have read about Mumbai city itself spending about $60 billion in improvement of infrastructure. The PMA housing targets, rising rural demand. None of these have been diluted by the West Asia crisis.
These are very strong structural forces and Ultratech is better positioned than anybody else to capture that demand in the long term. The near term environment has its complexities. Nobody knows what will happen tomorrow. What will be the new comment that gets made which could move the markets. We will wait and watch. On the integration side we are through the hard work. Both India Cement and Kiyosoram are fully migrated to the ultratech brand. Cost improvements are Underway and fiscal 27P&L will start reflecting the benefits of this investment.
I should definitely mention about the dividend the Board has discussed, debated and proposed. Our balance sheet remains robust with a net debt EBITDA of 0.94x at a consolidated level and 0.92x at UltraTech India level. This gives us financial flexibility to continue investing in growth without compromising on returns to shareholders. We have already started charting out our growth story beyond 240 million tonnes and will come back to you next year. The Board has recommended a dividend of 240 rupees a share for fiscal 26.
This dividend has been stress tested against retained earnings remaining adequate for all planned Investments and commitments, credit metrics and debt covenants are unaffected by the proposed distribution. We’ll maintain our leverage below 1x year after year after meeting our growth capex. And our growth capex requirement is not shrinking. We see a plan of investing around 8 to 10,000 crores every year for the foreseeable future. Capex pipeline remains fully funded and the growth story is intact.
It’s a cumulative outcome of disciplined capital allocation, operational excellence and consistent strategic execution over many years. We know it, you know it, our operating cash flows are growing and our board has already taken a stance of improving the returns to shareholders. You would have seen our Dividends grow from 10% of profits in 2020 to 37% of profits last year. And today we are where we are. Dividend is not simply a financial transaction. It is a communication of our confidence and commitment to our shareholders and investors.
It says we are confident in our earnings quality, in our forward outlook and in our ability to generate and sustain value. We are not keeping cash on balance sheet out of uncertainty. We are sharing it because we can and because we have planned carefully enough to do so without any constraint. I want to close with something very simple. Ultratech has made commitments to investors on capacity, on integration, on brand transition, on cost efficiency, on sustainability and on returns to shareholders.
Year after year. We have delivered on these commitments. FY26 being the top notch performer. We said we would reach 200 million tonnes ahead of schedule. We did. We said we would complete brand transition for ICL and Kesaram. We did. And a quarter early. That consistency of delivery, ladies and gentlemen, is what defines Alzhatec and it is what will continue to define us in the decade ahead. Thank you. And we are now ready for your questions.
Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Questions and Answers:
Rahul Gupta
Hi. Thank you for taking my questions. First of all, Congratulations on hitting 200 million ton capacity, domestic capacity and a very good set of numbers. So I have three questions. First, just continuing on the capital allocation point that you made, Atul sir, thanks for the clarity on that. Just to be clear on this, is it fair to say that given balance sheet strength and you Funding your capex through internal accruals we may see payout ratios staying higher for foreseeable future.
Atul Daga
I think so, but it will depend on the board and company’s performance if we perform, you know if the cement markets do well, I think it should be possible.
Rahul Gupta
Got it. That’s very helpful.
Atul Daga
Most important point Rahul I would want to make is and I think already said it but I want to repeat next few years we are in 26 till 2030, 31 I will see 8,10,000 crores of capex happening from our balance sheet every year. And as the operating cash flows grow because of our existing size, existing capacities delivering more and more, the operating, the size of operating cash flows keeps increasing making it very easy for the company to reward its shareholders.
Rahul Gupta
That’s exactly the point. Yeah, very, very helpful. My second question is on realization you to some extent have clarified how realizations have been better this quarter. Your share of trade has improved, direct sales have improved and brand transition of acquired assets also ramped up fully during the quarter. So am I missing something over here or is it the brand transition completion has helped in giving you the edge in terms of realization during the quarter?
Atul Daga
Significantly because if I were to look at let’s say India cements volumes for the quarter of 3.12 million tons non ultratech volume was 0.39 million tons only so we have had the. And everybody knows that you know ultratech enjoys a premium positioning with brand transition that has definitely helped. Jama, you want to add. Yeah
K. C. Jhanwar
Very good afternoon and I would add further what Atul said actually the fundamentally I think it is working on all engines actually there are number of moving parts in the cement actually so one, yes of course the brand transition to less clarified which is rightly so but there are so many other at least 4, 5, 6 critical moving parts actually which also helps to improve the efficiency and at the end of the day resultant into the improved cost structure or the higher probability.
Rahul Gupta
Got it. And my final question is first of all thank you so much for sharing Data on slide 6. Now my question is that in one of the slides you have mentioned that other OPECs got some impact of the West Asia crisis. Can you help us quantify what that would be and how should we see June quarter assuming this current situation continues.
Atul Daga
So firstly on slide 6 I’ve just given an indication which what could be a potential impact and this cannot be annualized for the quarter so please don’t panic too much. And yes in the last quarter the immediate impact was because you know Everybody has inventories of fuel so nobody would have really felt the heat of rising prices of fuel. But bag became a crisis in the last month of in the month of March and everybody got impacted. The cost went through the roof and our incremental cost on bags was approximately 90 crores which is reflected in other costs for the quarter on account of bags cost going up.
Hello.
Rahul Gupta
Thank you. And any color. How should we look at power and fuel cost for the June quarter?
Atul Daga
I don’t think there will be too much of an issue in the June quarter. And I will urge you Rahul to fly down to the White House and do something about it. I don’t think so. It will be too much of a pain. Prices are going up because of reality. Selling prices have also been increased to take the to cushion the impact of rising input costs. Another important one off which we are not even talking about. But the fact is the way rupee devaluated. I have $950 million of foreign currency borrowings. $950 million of foreign currency borrowings.
Food fully hedged. But when you have to do a mark to market you have to take the impact of that currency into accounts. It hits your EBITDA 94.85 was the dollar rupee rupee to dollar 31st March it corrected. It strengthened by almost 1.8 sort of. It corrected on 2nd April 1.8. But we have to account for the dollar borrowings at 94.85 so no still it’s a debit to the non cash debit to the PNL but so be it.
Rahul Gupta
Got it. Well understood. Thank you so much and wish you all the best sir.
Atul Daga
Thanks Raul.
Operator
Thank you. Ladies and gentlemen, in the interest of time and fairness to others we request you to restrict to two questions per participant and rejoin the question que we take the next question from the line of Pulkit Patni from Goldman Sachs. Please go ahead
Pulkit Patni
Sir. Thank you for taking my questions and commendable results. Very good quarter. So my first question is you spoke about brand conversion having completed it in March. Could you highlight between March end and now how much has been the impact of this on India Cements and Kisora?
Atul Daga
So Kesaram, if I look at January March quarter it was already operating at 1,000 plus EBITDA per ton and everything else remaining the same. India cements will improve further because again I called out out of 3.12 million tonnes only 0.39 million tonnes was non UltraTech brand 2.73 million tonnes already rebranded. So Everything else remaining the same. The impact will be felt on this, you know, less than half a million tons of volume in Q4. Having said that, price improvements and the real efficiency and integration benefits will start flowing.
Now to, you know, better explain Phuket now it’ll be one product which is leaving from all the 9, 11 factories of 9 factories of India Cement. As compared to earlier days there were multiple brands going on, not just two, but there were more than two brands going out. So the real efficiency which will be visible in logistics now, seamless operation will be visible now my performance will go up further in terms of earnings potential from India.
Pulkit Patni
This is very clear. So secondly, I’m just following up from the question from the previous Participant on the slide 6 where you speak about the impact of West Asia conflict and while clearly, you know, longer term you’ve been able to manage costs really well, etc. I’m just wanting to understand these costs are quite meaningful because you mentioned in one of your remarks saying that you know, these are manageable. I just want to understand like based on just rough math, this looks to be fairly high in terms of its impact.
So any mitigating measures that you can highlight which gives you confidence that you’ll be able to manage through this?
Atul Daga
Yeah, there are several measures and for the sake of confidentiality I might not be able to reveal trade secrets but you know, diversifying my sources of procurement, identifying newer opportunities to deal with the situation, doing long term contracts for fuel which are going to be beneficial to us. Now last two years our long term contracts were going against our, you know, against our decisions were unfavorable. These will become favorable for us and nobody has them. So ultratech will be one step ahead again bags May.
We have nearly 150 odd suppliers across the country and when there is a volume advantage for a supplier, obviously their inclination to service a high volume customer is much higher. Higher legal impact. Nobody knows. You know we are waiting. It might surface its head its horns next month. We’ll have to wait and watch.
Pulkit Patni
Fair point sir, fair point. Maybe can I slip in one more question if you allow. Yeah,
Atul Daga
Yeah, go ahead, go ahead.
Pulkit Patni
Okay. Sir, this is. You’ve mentioned the capex you’ve incurred on your cable and wire business. And I know the numbers are small but just to get an understanding, 800 crore out of 1800 crore has been spent. Does it mean we are on track for a for end of the year launch?
Atul Daga
Yes. And since you cover this sector in so much detail, you know what the implication is? I don’t have to spend so much money.
Pulkit Patni
Yes, sure.
Atul Daga
Yeah. It speaks for itself. And we. My guess is we should be on track on time. We had committed Q3. We might be in the first month of Q3. We might launch instead of waiting for December.
Pulkit Patni
Superb. Thank you and great results as always. Thank you.
Atul Daga
Thank you.
Operator
Thank you. We take the next question from the line of Pratik Kumar from Jeffries. Please go ahead.
Prateek Kumar
Yeah, good evening, sir. And congrats for. Great. My first question is, can you discuss sequential improvement in the performance shipping out international operations which was also done well in the quarter.
Atul Daga
Sequential as in quarter to quarter? What do you mean?
Prateek Kumar
Yeah, quarter to quarter. Like how much is the. I mean, it seems like international operations have also contributed to sequential improvement of overall.
Atul Daga
Yeah. So you know, you know what? But they are only 5 million tons of capacity. One thing is that before the war broke out, they were operating at 100% capacity utilization. There was a drop in capacity utilization which went down to about 80%. Now with peace, Permanent peace program being there, capacity utilizations have started going up. Prices have started going up. So they are doing well for themselves. But the bigger thing, Pratik, is that is only 5 million tonnes. I have had 1250 rupee of EBITDA per ton in India on a much higher volume.
Of course. I am knocking off the impact of exchange rate and cost of bags which we had to face. UAE operations are all bulk volume, so there’s no bag cost over there without. Okay, accounting for all the expenses in India, we are still at 1200 rupees per tonne out of the 1253 average per ton. UAE I believe they are doing well now. Volumes are picking up, prices have not fallen. And knowing the UAE economy, I think they will be the first one to turn the leaf, come up with some new programs for reviving the economy.
So
Prateek Kumar
The UAE operations benefit from the construction demand wherever
Atul Daga
Sequentially. UAE had EBITDA of 267 crores in Q3 and 278 crores in Q4. It’s a stable journey.
Prateek Kumar
Oh, so it’s stable Q1Q EBITDA of UAE operations.
Atul Daga
Yeah. Okay.
Prateek Kumar
The question is on. I mean, can you split your pending efficiency improvement program which you’ve given 185 rupees.
Atul Daga
I forgot to talk about it. I should have thumped my hand on the table and told you. I promised and we have delivered. So we are at almost 185 rupees per ton on nominal basis. We have completed and all these programs which are there, which will take us beyond 300 whilst we had committed 300 because I’m keeping, let’s say an emergency emergency or a buffer in my pocket. But I think we will Deliver higher than 300 bucks what you’re looking at. So yeah, we are looking at a number higher than 300 bucks.
But fiscal 27 also we should cross significantly higher without giving a number upfront. I have a paper in front of me. But yes, we will deliver higher than 300 bucks by fiscal 28. I’ve highlighted all the parameters and how they are getting quantified and measured. I don’t know what else to add further.
Prateek Kumar
Sure, thank you. These are my questions.
Atul Daga
All right, thanks, Sadiq.
Operator
Thank you. We take the next question from the line of Amit Kumar Moraka from Access Capital. Please go ahead.
Amit Kumar Murarka
Yeah, hi, thanks for the opportunity and congratulations on a great result. Just on the couple of data points, we just wanted to understand better. So in the presentation you’ve mentioned that your other brand sales volume was 7 point, I think 4 odd million tons in FY26. So is it fair to assume this number will be close to zero in 20 years given that full transition has happened?
Atul Daga
No, 7.34 in 26 and 0.52 in Q4. Okay. 0.52 may say 0.39 was India Cement and balance was Kesoram old brand. So this is all gone now. Next quarter you won’t see it. Yes,
K. C. Jhanwar
Almost zero.
Amit Kumar Murarka
Great, great. And also on the trade, non trade makes like seems to be now 65, 35 I think a bit higher than 70, 30 earlier. So. So again, like on this mix particularly, would it be because. Because in the presentation I’ll see that the industrial infrastructure was a bit muted in the quarter, but still this number is a bit elevated. So I wanted to understand like is this, is this going to be now a sustainable mix or would you like to kind of take it?
Atul Daga
I have seen it fluctuating between 65, 67, 68. Yeah, this has been the narrative or this has been the broad mix. And what you saw in Infra, two red marks that we have given is again a temporary last quarter because things got over in one, let’s say Gujarat, when the high speed rail project has passed through it, the work is coming to an end. That’s why you saw a red mark there. But otherwise I’m sure the government, the way everybody knows that infra is the foundation for growth, it will keep on happening west.
I think I’ll have to create a darker green color for infrastructure going forward because the way Mumbai and I’m quoting the newspapers yesterday or day before, day before or one day earlier when the newspapers give a summary of how Mumbai is shaping up. 2035 will be totally new phase of Mumbai. $60 billion being spent here. So things are happening in the countries.
Amit Kumar Murarka
Understood? Understood. And just one last question if I may. Also on the clinical conversion ratio it’s now 1.48x. How. How much more can it go to? Let’s say in the next one to two years
Atul Daga
We have targeted to reach about 1.54x. That is that roadmap is already there and let’s see what how things shape up beyond that.
Amit Kumar Murarka
Got it. Thanks. That’s all for me and best of luck.
Atul Daga
Thank you.
Operator
Thank you. We take the next question from the line of nzajit Agarwal from CLSA. Please go ahead.
Indrajit Agarwal
Hi Mr. Dagar. Thank you for the opportunity and great set of numbers as always. Two questions. In the last few weeks of March or early weeks of April have you seen any concerns on availability because of the conflict? Be it bags or pet Coke where you have found it difficult to source even at.
Atul Daga
No, no, no, no. No problems
Indrajit Agarwal
Our dispatchers
Atul Daga
Have not suffered at any location in the country. Bag availability has not been a crisis. It has become expensive but it is under crisis.
Indrajit Agarwal
Second barring cement, all other building materials have become lot more expensive. As you mentioned steel. If you look at PVC or other commodities as well is it causing a demand concern for the overall IHP segment?
Atul Daga
Too early to say that. We have taken increases for cement industry has taken price increases for cement in the month of April and by and large we don’t see a slowdown in demand demand. Now everything can be explained. People will have an explanation. Too much of heat because of which there’s a slowdown. But election. Yeah. Bengal and Tamil Nadu elections resulted in a slowdown. Just before the last 15 days you see a slowdown. But generally I think the undercurrent remains strong.
Indrajit Agarwal
And lastly if I may, your best estimate, what would have been the industry growth for March quarter?
Atul Daga
6 to 7% is what my learned team over here tells me.
Indrajit Agarwal
Thank you.
Atul Daga
Thank you.
Operator
Thank you. We take the next question from the line of Jaishanteep Singh Achadda from Nomura. Please go ahead.
Indrajit Agarwal
Hello. Good evening sir and thank you for the opportunity and congratulation on a very good set of numbers. So my first question is regarding India SE. As you have highlighted that 100% band integration is done and. And you know you also highlighted this that only a small portion of volumes were under India cement ban. I just wanted to understand that the delta of incremental EBITDA per turn for reaching 1000 rupees per ton, how much of that will come from the cost efficiency measures that you’re undertaking and you know, realization improvement.
So if you can give a sense of, you know, because I believe most of your investment bodies are already selling under Altertech brand. So how much more potential is there for realization improvement and how much cost efficiency measures will be there? That’s my question.
Atul Daga
Yeah. Judging me by. So first and foremost cost improvement programs. And again I’ll go back to my earlier quarter commentaries. January, March 28, you will see all the efforts on CapEx converting into efficiency improvement. We are still seeing 200 per ton of efficiency improvement which will come into the kitty of India cements. Now it all depends. Second point and I’ll come to your one more aspect that you raised. How do we look at the earnings from the volume of India cements? Mind you, there is 200 rupees of EBITDA per ton on India cements volume which is sitting in Alpha Tech Books.
The 497. 4977 for the quarter. And because of the during the quarter gradually the transition was done. It’s not exactly 200 but about 176. Total is 670. Okay, so we have reached a number of 670 per ton on India cement. Now if price increases along with efficiencies, new capacity, capacity, addition, operating leverage, everything will take us beyond thousand rupees mark.
Indrajit Agarwal
Understood sir, understood. And I’ll ask my second question. It’s a two part question. So first is how you are looking at, you know, rural demand. How that it has been the, you know, March quarter and in April also how you’re looking at rural demand. And second is I know, I understand that Alterec at the scale at which it operates, you know, you will have multiple measures to mitigate this cost increase. But let’s say without those measures, what sort of realization improvement will be required to maintain the margins?
These are my intuitions.
Atul Daga
So you have asked three or four questions and I’ll restrict you to two questions. So the last question I will eliminate because that’s a very difficult question. I’m difficult to. As far as rural demand is concerned, we have operated at 90% capacity utilization across our network. Some, some plants would have operated at 95% and 100% also and averages all across the country, we are operating at more than 80%. If you marry this point to the fact that our trade mix has not we are 66, 67 hovering around those numbers only which means my rural demand has continued to stay steady.
I hope that answers your question. And you know, too early to talk about the important aspect. You know cash flows in rural markets improve with good crops which helps the rural demand. And too early to say now for the quarter how things will pan out in the remaining three months. Remaining two months, we will see. As for your other point you mentioned. It’s a moving target. You know costs, let’s say bags from 9 rupees to 15 rupees back, that’s a 6 rupee delta which has already happened. So that much price increase is required.
Similarly, fuel, fuel is a very difficult one. At least this quarter. I don’t expect my fuel cost to go haywire. We were at 1.81 or 1.7,
Indrajit Agarwal
Sorry
Atul Daga
1.77 per kilo calories max. It might go to 1.8. So that’s the only. And I’m just throwing this number off the cuff. I don’t remember exactly where we will land at. The biggest impact which was there in our ebitda profile was exchange$94.85 and today it is 94. It had come to below 93. Also quarter end reporting what it. What is required remains to be seen. So price increases that have already happened, well to my. In my view sustain the profitability.
Indrajit Agarwal
I know you don’t like answering, you know, price hype question so I was trying to hide it. But thank you so much. I’ll join back this year.
Atul Daga
Yeah, I am also slightly smart.
Indrajit Agarwal
Thank you.
Operator
Thank you. Ladies and gentlemen, a reminder. Please restrict to two questions per participant and rejoin the question queue. We take the next question from the line of Ritesh Shah from Investec. Please go ahead.
Indrajit Agarwal
Yeah. Hi sir. Congrats for a good set of numbers. I have four questions if you’re now. Okay, so 2A and 2B one is India Cement. We’re doing the right things. When do we see the day when we actually merge it? I understand there are few legal cases which are there but any timelines over here? Second, not so limited rbc. It’s something which the group has pursued. Any assurance from you that balance sheet won’t be touched or it’s something which is ring fenced? I’ll just wait over here if you allow.
Then I’ll go for the other two. Sir.
Atul Daga
So the second question I think our chairman himself had said Ultratech’s balance sheet is ring fenced. Long ago when aspersions were made about Ultratech supporting idea Voda idea. I think those are the days I’m going back. Not a penny has moved from multi tech balance sheet for any other purposes. So we remain committed. And again as I said, unless you miss the point, I have 10,000 crore of capex happening every year at least for four or five years. Going forward that’s about 50,000 crores of incremental capex.
Okay so my operating cash flows is meant for meeting my CAPEX requirements and for my shareholders.
Indrajit Agarwal
Yes sir. India Cement.
Atul Daga
Yeah. So there are those complicated legal issues which we have inherited. We as I mentioned we don’t want to take any risks with Ultratech, the main company and our main board once we are able to and we are trying our level best to get those cases closed because they are donkeys, years old cases and there’s been no movement, nothing. Once we are convinced that there is no risk to us we could look at the next phase of integration.
Indrajit Agarwal
Sure sir, I’ll just try my luck Sir. Third question, rmc, we have done very well. What’s the endpoint over here? I think the number of plants, revenue growth. Revenue growth is more than volume growth. What is correct that we are doing over here and eventually in plans to monetize this particular business that’s on RMC. Second sir, ESG clinker factor. You indicated our target is 1.54x. I just wanted to get a sense by what year is this and how do you see the industry’s ratio equivalent to 1.54x going forward?
I understand we are OPC heavy and we have historically maintained that whatever we do we will have clinker backing at 70%. Is it something which will change going forward or we continue to be on the same hypothesis
Atul Daga
We will always be fully clinker backed. Second point one point five four is our target to reach by fiscal 28th. I don’t want to comment about the industry but all I can say is ultratech is a far stronger company in all aspects as compared to rest of the industry quarter after quarter and there’s enough, not, I don’t have to say enough data but actual data which is available. If you just sum up the performance of cement industry, rest of industry put together and Ultratech on one side we have delivered growth higher than the industry, EBITDA per ton higher than rest of the industry.
So this doesn’t come by, you know, magic. All the efforts whether it is clinker conversion which means composite cement which gives me more profitability, RMC or all other aspects of our business which we are doing, which Help us to be far ahead. As for rmc, RMC is an integral part of our business. I do see a need or don’t see that thought process as of now to monetize it. Sorry, what a target in terms of number
Indrajit Agarwal
Of plants. Say we are 3% of the volumes. Like is there a target to go to 6% in three or something like that? Not really. Not
K. C. Jhanwar
Really in terms of percentage. But yes, we continue to grow because RMC is the future growth engine. So obviously the more and more urbanization is happening, I think the RMC is going to be.
Atul Daga
I think we are invested for the future Ritesh, to be honest, to meet the requirements. And if you look at our UAE business, it is zero trade sale. It’s all sales to RMC people. So or globally, US market or anywhere else. You see, they are globally. So RMC is an integral part of our offering and of our business model.
Indrajit Agarwal
Sure. I have one more question.
Atul Daga
This is 10A. Okay, next one please.
Indrajit Agarwal
Thank you. Thanks.
Operator
Thank you. We take the next question from the line of Penayakan from hsbc. Please go ahead.
Indrajit Agarwal
Thank you very much sir. So congratulations on a great number. So one question we keep on getting from investors over the last few months is that the other industries, industries like steel and agri and PVC have taken aggressive price hike in the face of cost pressures. But the cement industry has struggled to raise prices in November. The price hikes have been relatively muted even if demand has been strong. What would you attribute cement’s relative underperformance whether versus other building material industries in terms of taking price hikes.
Atul Daga
Fragmentation of the industry is as sweet and small answer Pinakin that I can give you. Yeah, I think that would sum up everything.
Indrajit Agarwal
Just taking that point forward to the second question. Assuming that the Middle east conflict stays where it is, we have pet cogit 160 these oil hundred dollars a barrel for the year. Does this mean that the industry would struggle to pass on fully the cost pressures eventually this year?
Atul Daga
No, we are already passing on the. If every industry is passing on the cost, so are we. March. You know, somebody had asked me why prices are not going up in the month of March. March is never a period to increase prices because it’s a volume period. Price increases always happen and every industry has its own fabric and own pattern of behavior. July, September, monsoons impact cement industry only. So price increases generally are seen in the first quarter of the financial year, not in the last quarter of the financial.
And besides, obviously demand supply is always there. If demand is robust, prices go up and you are there. I am also here. We will talk and we’ll demonstrate. I think Ultratech will be steps ahead in terms of performance.
Indrajit Agarwal
Thank you very much, sir.
Atul Daga
Thanks Panagan.
Operator
Thank you. We take the next question from the line of Rashi from Citigroup. Please go ahead.
Raashi Chopra
Thank you. Just on your point that the fuel cost will go from 1.77 to 1.8 in the quarter. This is due to your long term contracts from right?
Atul Daga
Multiple things. Long term contracts. Inventory sourcing, sourcing, changing the fuel mix multiple things.
Raashi Chopra
How long your contracts and inventory last. As an understand. I understand that should the situation persist wherein Petco prices sustain at like the 160 or 160 plus when do you start feeling the impact?
Atul Daga
July, September would be some ripples that you will see again. Which we will be able to manage better than the industry because of our supply contracts and domestic sources of coal.
Raashi Chopra
So on these ending
Atul Daga
War early. Rashi, why are you wanting it so long?
Raashi Chopra
I’m just trying to gauge that on your supply contracts like how do his work do you have them going on? I mean it’s a continuous rotation and therefore this can persist.
Atul Daga
Yes, it can persist. It will persist.
Raashi Chopra
Okay. And on the packaging side between the fourth quarter to now what is going to be the delta
Atul Daga
Fourth quarter to now Roughly nine rupees a bag. Yeah.
K. C. Jhanwar
Fourth quarter to now there was some increase and there was some decrease also. So I would say it’s. It should remain not nine.
Atul Daga
Sorry, six rupees a bag. Sorry, nine to fifteen. So it’s about six rupees a bag.
Raashi Chopra
Essentially the price hike set up the industry has taken should be in your opinion adequate for you to offset. Yes,
Indrajit Agarwal
Yes, yes.
Raashi Chopra
Okay. And just on the industry demand. You mentioned that the industry Demand likely worth 6 to 7% in this quarter.
Atul Daga
Yeah.
Raashi Chopra
Full year number is again similar.
Atul Daga
6.5 is what my colleagues tell me. For the.
Raashi Chopra
And your volume expect ultratech volume expectations
Atul Daga
For 27. Oh we would target double digit growth.
Raashi Chopra
Got it. Okay. Thank you.
Operator
Thanks. Thank you. We take the next question from the line of Ashish Jain from Macquarie. Please go ahead.
Indrajit Agarwal
Hi sir. Good evening. Sir. My first question is the price hike is sufficient to offset cost in that you are factoring coal cost also or just packing cost given coal you said will not impact in June.
Atul Daga
I am factoring in everything.
Indrajit Agarwal
Okay. Okay. So secondly, you know
Atul Daga
For if you take dollar to 100 rupees that I have not fact I’m not factoring in which is a no at the end of the quarter
Indrajit Agarwal
And diesel as well. Which we will know when we will know.
Atul Daga
Yeah, yeah. That has not been factored in.
Indrajit Agarwal
Yeah. Secondly, earlier on the call, I think you said that there is a mark to market hit on your Forex loan. Can you quantify that and is it above ebitda?
Atul Daga
What do you mean above? Every day it’s part of my cost. Yeah. It’s within ebitda. It’s not an extraordinary item. Not a finance cost. Correct. Yeah.
Indrajit Agarwal
It is a hit to EBITDA.
Atul Daga
Yeah, hit to EBITDA.
Indrajit Agarwal
Can you quantify that?
Atul Daga
About 140,
Indrajit Agarwal
30
Atul Daga
Rupees a ton. Okay.
Indrajit Agarwal
Secondly, you also said that packing cost impact was felt only in March month. And if I heard you write you said it is 90 crore just for the month. Did I hear you right?
Atul Daga
Yes, you did.
Indrajit Agarwal
So shall we assume that that run rate which will continue given there is no relief on packing?
Atul Daga
No, because as Jamalji also mentioned, prices have stabilized. We have built volumes over inventories. And doing alternate sources, mind you, nobody I think would have as many sources like Ultratech does. We have almost 150 suppliers across the country supporting us with bags. We are doing some other things also to ensure we are able to source bags and maintain costs. So 90 crores was a hit which was, you know, the cost of the bag had gone up further also beyond 15 crore rupees. Then it stabilized to 15 or even today would be 13 or 14.
Yeah, it’s marginally reduced. So not 90 crores cannot be analyzed.
Indrajit Agarwal
Okay.
Atul Daga
We have taken care of that with price increases.
Indrajit Agarwal
Right. Just on pricing if you can. Like shall we, you know, shall we think that given the kind of cost inflation and all price hike is here to stay or you are seeing some pushback in terms of the channel or demand impact. Are you seeing that kind of concerns on.
Atul Daga
I believe it’s here to stay. Because you know this is impacting every cement player in the country in every nook and corner,
Indrajit Agarwal
Right. It’s
Atul Daga
Not, not a one off, it’s not one region. Everybody’s getting impacted. So everybody wants to protect their balance sheet and pnl.
Indrajit Agarwal
My second question just on India Cement, the thousand, even some of the EBIT of India Cement is getting booked in Ultratech standalone. Your thousand rupees per ton guidance include that or that is the what India Cement can eventually report using in spite of the tolling agreement. I
Atul Daga
Am so. I’m sorry I missed your question. What did you say?
Indrajit Agarwal
Some of the EBITDA per ton of India cement is getting booked in Ultratech standalone because of the tolling arrangement. And you know the phase being done by ultra, the thousand rupee guidance which you speak for India Cement, include that one which is getting booked in ultratech or it is pure India cement ebitda per ton which will come purely through cost savings and all.
Atul Daga
Yeah, so all inclusive. So you say 800 in India cement books and 200 of that coming in ultratech books. But again Ashish, don’t get disheartened because when we have committed 300 rupees of cost improvements and already delivered 185
Indrajit Agarwal
As
Atul Daga
Precise and to the second decimal when I. And I’m also saying that we will do more than 300 bucks. So that gives you some indication of. No,
Indrajit Agarwal
No, for sure.
Atul Daga
Yeah,
Indrajit Agarwal
Yeah. So lastly, just you know, on long term, you know, while you, you kind of clarified that 10,000 crores will be the capex for ultra tech, you know, the cash generation will be much higher than that in my assumption at least. So how should we think about.
Atul Daga
You just saw what the board did now and I, I clarify, I think you were not there on the call when I spoke about dividends.
Prateek Kumar
I was
Atul Daga
Very thought through strategy by the board. Enough. We have presented enough, you know, position with the board before they came to the conclusion that yes, it’s now time to reward the shareholders.
Indrajit Agarwal
That’s very helpful. Thank you so much.
Atul Daga
Thank you.
Operator
Thank you. We take the next question from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Thank you. Mr. Dagar, just a follow up question on the dividend. I think to see that special dividend you have a lot of confidence in the cash flow that significantly higher than what the capex you’re looking at. So can we expect this is a special dividend, can we expect like a target on dividend payout or. I missed part of it in the initial just trying to understand or maybe increase the dividend rate. And this is also in the context of sometime back when we saw the wire and cable investment and you mentioned that any other investment in the building material industry for the next five years is not looking at this, seeking a confirmation that you’re looking at 10,000 crore capex and any incremental dividend cash flow.
Atul Daga
10,000, sorry, be finished first. Yeah,
Satyadeep Jain
10,000 crore capex incremental cash flow will go to it as a return of capital to shareholders. Is that understanding correct? And should we not look at higher dividend rate or maybe a target of return of capital as profit?
Atul Daga
I have my capex plan and as I also mentioned during our commentary that we are already Writing our blueprint beyond 240 million tonnes. 240 is already stitched. We have close to plus minus 15,000 crores to be spent. Plus minus, I’m saying not an accurate exact number to be spent. That there will be capex on cement beyond 240 million tons further. And that is what I’m talking about. 10,000 crores of capex which will happen on cement year on year. And yet our OCF will be large enough to reward the shareholders.
Satyadeep Jain
That I understood. But it should be. This was a special dividend. Just trying to understand given this Capex you’re looking at and the ocf, why not consider a higher dividend rate or maybe commit to a return.
Atul Daga
This is as high it can get. So I don’t know what’s your question? So you know I. Okay. Whether next year also it will be the similar dividend. I am not an, not the person to call that out. It depends on the OCF for the year. It depends on the board’s decision once they look at the annual performance. And my guess is the direction is already visible and certainly again I also called out 2020 we were at 10% of profit. In three or four years we jumped to 37% of profit. And it’s a leapfrog jump. Right now it’s 3x naughty as dividend which is, which is fantabulous.
So next year also it could remain the same. It could go up or it could come down. If performance is not good then it could come down. We’ll, we will manage our balance sheet. We will not over leverage the balance sheet.
Satyadeep Jain
Just clarification on that. So wire and cable was an investment. Apart from that, no other adjacencies for next year.
Atul Daga
As of now I don’t have anything.
Satyadeep Jain
Just one last question on the new plant that you’re setting up. The ongoing and the new ones looking at, are you adding any thermal plants because you have ambitious green.
Atul Daga
No, no, no thermal capacity. So we are adding higher level of WHRs, tying up renewable and several locations. Grid is also available now. So we are not adding any thermal capacity.
Satyadeep Jain
Okay, thank you so much.
Atul Daga
Thank you,
Operator
Thank you ladies and gentlemen. We take that as the last question and conclude the question and answer session. I now hand the conference over to Mr. Atul Dagga for his closing comments.
Atul Daga
Thank you so much everybody for joining us and patiently listening to us. For us it has been a very satisfying, rewarding and you know, landmark quarter, landmark year. Generating 3000 crores of PAT for the quarter, 8000 crores plus of overall PAT for the year. Integration done. Volume growth rising and a stable 200 million tons of capacity and a stable and a growing cash profile that we see for our company. And icing on the cake was music to our ears when the board considered this dividend of 240 or 2,400%.
So I think everything has gone very well for us this year and God willing we will continue to deliver stellar performance year after year. Thank you so much.
Operator
Thank you. On behalf of UltraTech Cement Limited. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.