J.K.CEMENT LTD (NSE: JKCEMENT) Q2 2025 Earnings Call dated Oct. 29, 2024
Corporate Participants:
Ajay Kumar Saraogi — Deputy Managing Director and Chief Financial Officer
Prashant Seth — Vice President, Business Information and Investor Relations.
Analysts:
Vaibhav Agarwal — Analyst
Shravan Shah — Analyst
Amit Murarka — Analyst
Pathanjali Srinivasan — Analyst
Ritesh Shah — Analyst
Navin Sahadeo — Analyst
Abhishek Poddar — Analyst
Raghav Malik — Analyst
Prateek Kumar — Analyst
Rajesh Ravi — Analyst
Presentation:
Operator
Ladies and Gentlemen, good day, and welcome to JK Cement Limited’s Earnings Conference Call for Quarter and Half Year Ended 30th September 2024, hosted by PhillipCapital (India) Private Limited.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.
Vaibhav Agarwal — Analyst
Yeah. Thank you, Michelle. Good evening, everyone. On behalf of PhillipCapital (India) Private Limited, we welcome you to the Q2 and H1 FY ’25 call of JK Cement Limited. On the call, we have with us Mr. Ajay Kumar Saraogi, Deputy Managing Director and CFO; and Mr. Prashant Seth, President, Business Information and Investor Relations.
I would like to mention on behalf of JK Cement and its management that certain statements that may be made or discussed on today’s conference call may be forward-looking statements related to the future developments and which are based on current expectations. These statements are subject to a number of risks, uncertainties and other important factors, which may cause actual developments and results to differ materially from the statement made.
JK Cement Limited and the management of the company assumes no obligation to publicly alter or update these forward-looking statements, whether as a result of new information or future events or otherwise.
I will now hand over the floor to the management of JK Cement for their opening remarks, which will be followed by interactive Q&A. Thank you, and over to you, Saraogi, sir.
Ajay Kumar Saraogi — Deputy Managing Director and Chief Financial Officer
Thank you, Vaibhav. Good evening and welcome to this Q2 call. The Board of Directors met on 26th of October to review the working for the quarter ended September ’24 as well as half year ending September ’24. The major highlights of the working: the net sale for the quarter was INR2,322 crores as against INR2,555 crores in the previous quarter, a dip of about 9% and INR2,476 crores year-on-year, a dip of about 6%.
The operating expenses were lower by 2% at INR2,119 crores as against INR2,164 crores previous quarter and year-on-year flattest INR2,124 crores. The EBITDA for the quarter was INR273 crores as against INR479 crores in the previous quarter, a dip of 43% and INR447 crores in the previous year, dip of 39%. EBITDA margins was 11.7% for the quarter as against 18.7% in the previous quarter and 18% in the previous year.
If you look at profit before tax, it was INR64 crores as against INR292 crores and INR246 crores. And profit after tax was INR45 crores as against INR203 crores and INR179 crores. EPS for the quarter was INR5.80 as against INR26.2 and INR23.1.
For the half year April-September, the net sales were down by 3% at INR4,877 crores as against INR5,117 crores. The operating expenses was lower by 1% at INR4,283 crores as against INR4,345 crores. The EBITDA was down by 11% at INR752 crores as against INR849 crores. Margins was 15.4% as against 16.9%. Profit before tax was INR355 crores as against INR454 crores, a dip of 22%, and profit after tax was INR247 crores as against INR305 crores, a dip of 19%. The EPS was INR32.10 as against INR39.50.
As you would have seen, the working for the quarter was not on the expected lines. That was mainly on account of both external and internal factors. External factors were the demand because of the monsoons and the expected demand was not there and there was pressure on pricing continued, and for internal there was additional shutdown because of monsoons and that which resulted in incremental expenses affecting the bottom line.
As regards the project, the 6 million tons expansion work is at a good speed and we are confident that we would be able to commission as per the expected lines either by end of third quarter or beginning of fourth quarter FY ’26.
If you look at the balance sheet, the gross debt as on 30th September was INR4,664 crores as against INR4,592 crores as on March. The cash balance as on 30th September was INR1,620 crores as against INR2,011 crores. Net debt was INR2,582 crores as against INR3,044 crores. The net debt to EBITDA was 1.6 times as against 1.29 times, and the net debt to equity was 0.56 times as against 0.48 times. So, these are the major highlights.
I’ll be happy to answer your questions. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi. Thank you, sir. Sir, first on the other expenses for this quarter was how much one-time which we will not be seeing from third quarter onwards because that has impacted profitability a lot?
Ajay Kumar Saraogi
So, there are two things which are there affecting, which may be classified as one time. So there would be an incremental one-time expenditure of about INR30 crores, which is there — which should not be there in the subsequent quarters. Also, in the raw materials, because of the shutdown, we had purchased certain clinker, and that clinker quantity should not be there. There could be some marginal clinker which we are — we have procured for central India in the month of October.
Otherwise, there would be no requirement of any purchase clinker going forward. So these two could be the one-time expenditure, which, if we look at in terms of the value, could be anything around INR45 crores to INR50 crores, could be a one-time impact which is there in this quarter.
Shravan Shah
Got it. Now, sir, if I look at from the gray cement perspective, so 1H, we have done close to 2.1% volume growth and we were looking at 10% for this year. So, now, how we look at for full year, how much we are looking at?
Ajay Kumar Saraogi
So, yes, we were looking at 10% overall and even now — in H1, the growth is only nominal. Even though we are expecting a good demand, we would see that we should be closing anything around with the growth of about 6% to 7%.
Shravan Shah
Got it. And in terms of the realization for gray cement was actually Q-o-Q, if I am just looking at the numbers, it is 0.8% up, whereas for white it was 3% down. So, for both the things, just wanted to understand, because for other companies we have seen 2% plus kind of a Q-o-Q decline in realization. So, is there anything — even if you can specify the incentive that how much we have booked in this quarter, so that will help? And also how the prices are there in the October month now?
Ajay Kumar Saraogi
No. So, as far as realization is concerned, one, since we had lower volumes, we cut down sales in certain not-so remunerative areas which normally we could have done. So, one, that was — some volumes were cut in the low retention areas, in some non-trade segments because we did not have sufficient volume available, especially in the south also. And there has been a marginal increase in the premium product sale also.
So all these factors have resulted that though the prices were under pressure, but on an average with a mix, we are not seeing any fall in the realization per ton.
Shravan Shah
And now how we look at the prices in the October month versus our 2Q average?
Ajay Kumar Saraogi
So, Q2 average marginally up. But we have to really see this is — I mean, whatever some prices had increased, but not across, but in the north and all, so marginally up as compared to average of Q2. But we have to see how we are able to increase upon some more pricing in coming days, post Diwali maybe.
Shravan Shah
Okay. And in terms of the…
Operator
Mr. Shah, I’m sorry to interrupt you, sir. I would request to you…
Shravan Shah
No issues. No issues.
Operator
Thank you so much, sir. Thank you. [Operator Instructions] We’ll take the next question from the line of Amit Murarka from Axis Bank. Please go ahead.
Amit Murarka
Hi. Good evening. Thanks for the opportunity. So, while the one-off expenses are one well explained, in the quarter, like some other opening revenue was also there, I believe, which was on the higher side. Also, generally, could you talk about like in south you had an extended maintenance shut down. So how has it improved your cost efficiency or what was that extended shutdown taken for?
Ajay Kumar Saraogi
So, in case of the other operating expenses, we had got one-time subsidy which had come from central India. So that subsidy is included in the one time expense, so that — it was realized and got in this quarter, so that is reflected.
Amit Murarka
Okay. And also, the south extended shutdown, like could you just maybe talk a bit more about it as to what was it for and how that improved your efficiency or any cost metric?
Ajay Kumar Saraogi
See what has happened in the south, we had planned a shutdown of about 45 days, which also included some modification to be carried on. So that we are able to — we were saying that with the usage of AFR, the kiln output was becoming — had lowered. So we wanted to do certain modifications in the cyclone so that we are able to, A, maintain a high usage of AFR and have, in fact, improve — get more clinker and maybe some additional clinker.
So, while doing so, I mean, there was a continuous rain which disrupted the working and the overall shutdown was for about 70 days. So, because of that extended shutdown of about 25 days, we were forced to even to be in the market and not lose the trade market, we had to even purchase a lot of clinker to feed in the market.
So extended shutdown has not been — I mean on the cost front, it has not something substantially high. But that has resulted in some additional — for the period, the clinker which we had to buy from the market. So, that resulted in loss of contribution which is reflected, which could be a one time. The incremental cost was not that high. That was only about INR10 crores to INR12 crores in this south plant.
Amit Murarka
Sure. And also, lastly, the kcal cost has gone up on a Q-o-Q basis. Why would that be?
Ajay Kumar Saraogi
The kilocalorie cost has gone up during this quarter because, one, the AFR cost has increased. So we are seeing that there is a fall in the fuel pricing, marginal fall. But the usage of AFR, the AFR suppliers, the AFR cost has increased whatever contracted quantities which we had.
Now we have again renegotiating. Actually, AFR pricing is also linked to the fuel pricing. So, what they do, they always link it to the fuel pricing. Now with the softening of fuel prices, we need to — we are renegotiating the gap to be maintained between the price of AFR versus fuel. Otherwise, it would not be economical to use the AFR, make all the effort of using the AFR.
Amit Murarka
Okay. Okay. So, it’s mainly because of AFR cost going up, right? Because pet coke cost has gone down in the quarter.
Ajay Kumar Saraogi
Yes, yes, the pet coke prices.
Amit Murarka
Okay. That’s all from my side. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from Pathanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.
Pathanjali Srinivasan
Thank you for the opportunity, sir. I wanted to understand how much our unit cost of production can go down by in the next couple of quarters because I think from last quarter’s base to this quarter, the number has gone up like quite a bit. So I think it’s up almost INR450 per ton.
Ajay Kumar Saraogi
No, see this quarter is exceptional because of low volume, and so the cost has gone up. When you use your inventory, the inventory cost is much higher because it contains an element of fixed cost. So as per the account, so, all that affects the overall cost of the goods. But if you compare with the normal as we said, if you look at Q1 cost, so sequentially the cost should be reducing with — I think with the fuel prices softening and all, we should see an impact of about INR50 coming up in each of the remaining two quarters.
Pathanjali Srinivasan
Okay. And then, so, Q1 FY ’25 it was INR4,800. So, you are saying Q3, Q4 it can drop by INR50…
Ajay Kumar Saraogi
By about INR100 a ton.
Pathanjali Srinivasan
Yeah. So it can get to around INR4,700, is that correct?
Ajay Kumar Saraogi
Yeah, yeah.
Pathanjali Srinivasan
Okay, sir. Sir, and any region-wise could you give us some color on what demand was? Any region where demand was not as good as we expected or it was better than what we’d expected during the quarter?
Ajay Kumar Saraogi
So demand — see, the demand slip was not so much felt in the central India.
Pathanjali Srinivasan
Okay.
Ajay Kumar Saraogi
There was a dip in demand definitely in the north and the southern part.
Pathanjali Srinivasan
Okay. Okay. Sure, sure. Thank you so much.
Operator
Thank you. [Operator Instructions] The next question is from Ritesh Shah from Investec Capital. Please go ahead.
Ritesh Shah
Yeah. Hi, sir. Thanks for the opportunity. A couple of questions. Sir, first is any update on Toshali, specifically I’m looking at the limestone long-term supply agreement that we were looking with the government? That’s a first question. So, second question is on the paints business.
Ajay Kumar Saraogi
Yeah. So in paint business, what would you like to know?
Ritesh Shah
Yeah. Sir, where are we on the paints business right now, the revenue number and the EBITDA number for the quarter and how are we looking at the ramp up of the paints business?
And the third is we have indicated a number of INR150 to INR200 per ton of cost savings over ’25-’26. Where are we on that journey? These are the three broader questions, sir. Thank you.
Ajay Kumar Saraogi
Okay. So, on the Toshali, we are — actually we recently had a meeting with the CM also, our MD and we had because of the change of guard. So whatever had been discussed earlier, I mean, we had to really in a way start afresh. So we had a meeting and we had discussed with him and for a long-term arrangement with — and we had a meeting with the Chief Secretary also.
And I think we should get some — their proposal whatever we have submitted, their response sometime in the month of December or so. So we are hopeful. So, let’s see, once we get that, we will be able to take a call going forward. So, once a long-term agreement — see, one is they have given an indication cost, it the whole thing — the finalization of this would definitely take some time.
But at least it will help us in formulating our strategy for entering into the east and at what time, what is the timeframe, because as such, we are also — I mean, the only thing is that we want to have a — we want to firm up the arrangement of limestone so that the opportunity for entry into east is there. But immediately we are not going to start that we are clear till we will take a final call where to go for the next investment once we are about to complete the 6 million ton expansion.
So, at this stage, the only thing is to conclude the tie up for the limestone, which give me door for entry in the east, right? As far as paint is concerned, yes, we are — we have done in the — Prashant?
Prashant Seth
Yeah. Our turnover in this quarter was INR53 crores and six months is INR117 crores. And the EBITDA loss for the six months is INR25 crores.
Ajay Kumar Saraogi
Yeah. And so…
Ritesh Shah
Have you scaled up paints business?
Ajay Kumar Saraogi
Yeah. So, this is — now as we see, October is a main season month. So as we have done a record sale in this month and as we had a guideline that we should be closing the year somewhere between INR250 crores to INR300 crores as a top line, so we are confident that we would be in that region on the top line.
Our expected loss for the whole year was around INR40 crores, so we should be within that range only. And next year, we have a plan as a ramp up — next year, we have a plan of about INR400 crores top line, INR400 crores to INR450 crores, and INR600 crores by FY ’27 where we should be having a breakeven.
Prashant Seth
Hello?
Ritesh Shah
This is useful, sir. And on the cost side — yes, sir. And on the cost side?
Ajay Kumar Saraogi
So, on the cost side, we had three, four levers and the — one was on the logistic. So, we are working towards that and I think we have already been able to factor in about INR22 of logistic savings. And we expect that by March, our exit should be around INR45 to INR50 in case of logistic. We are already in advanced stage for certain more agreements for green power.
And with the other lever, one was on increase in the AFR. So, we are working towards that. We are — with the south, we would be able to further increase our AFR consumption. With the stabilization now of Panna, we should be able to start AFR consumption at Panna also. So these were the major three areas where we expected the cost savings. So I think that will gradually come up and should be visible.
So I think if we look at an exit by FY ’25, we should definitely have an exit of between INR60 to INR75. So INR60, which is a saving, which would have accrued, we should be seeing that saving in FY ’26. And other savings will come in FY ’26, which will pile up to about INR150 to INR200.
Ritesh Shah
Sir, very useful. Thank you so much, and all the very best.
Operator
Thank you. [Operator Instructions] The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead.
Navin Sahadeo
Yeah. Good evening, sir. Am I audible?
Ajay Kumar Saraogi
Yeah, yeah.
Operator
Yes, sir.
Navin Sahadeo
Right. Thank you for the opportunity. Sir, before I ask a question, just a clarification on the previous question. EBITDA loss you said for the first half was INR25 crores, so how much would that be in Q2?
Ajay Kumar Saraogi
No, no. Pardon?
Navin Sahadeo
You said EBITDA loss…
Ajay Kumar Saraogi
I said the EBITDA loss…
Navin Sahadeo
For the paint business.
Prashant Seth
In Q2, it is INR15 crores.
Navin Sahadeo
In Q2, it is INR15 crores. And first half…
Ajay Kumar Saraogi
H1, it is INR25 crores.
Prashant Seth
Yeah.
Navin Sahadeo
Understood. And full year, it will be around INR40 crores?
Ajay Kumar Saraogi
About INR40 crores.
Navin Sahadeo
Sir, my question — first question was with respect to the TSR rate. So I think previous quarter, and as per your presentation I’m seeing that there was a decent jump towards end of’24 and further it increased in Q1. But in Q2, this has dropped sharply to 13%. So…
Ajay Kumar Saraogi
Yeah. So, see, you would see that Q2 being a maintenance period for all the kilns, so that has resulted in a sharp decline.
Prashant Seth
And secondly, Navin, there is one more factor. Actually, earlier, we were covering only nine plants out of the 13. Now, we have got the SBTi approval for covering all the 13 plants. So, this data is actually revised for the 13 plants now. That is also a reason for the reduction. So, all the new plants are added now in this.
Ajay Kumar Saraogi
So, Panna was actually not included. And if you look at the AFR usage in Panna, being Indian coal user, that is the plant which uses the least volume of AFR. So, thermal substitution is the minimum and it has actually — the journey has started now after — so first — the first thing at Panna was to ensure the full stabilization of the plant.
And this quarter, the Panna kiln — because see, nowadays, yes, monsoon is there, but the monsoon the type — the typical type is that you have very excessive rain for a few number of days. That actually — that is something which really disturbs the entire thing. So, as we say, one-time loss, even in Panna though our brick lining was due in the month of October, I mean, from end September, which is now there.
But this excessive rain has — when the kiln was closer to the shutdown, it did have an effect on the kiln and we had to run the kiln at a very low output for almost a month and also in between, we had to close the kiln for two days, one day and that. So, during the quarter, the availability of the kiln was also less. The kiln ran at normal output only for one-third of the month and at reduced output for the balance period.
So, all that has also resulted, affected the cost factor, the other things, and all thermal substitution and everything got disrupted because of the erratic working during the quarter.
Navin Sahadeo
Fair point. Understood. Thank you. My second question was on the new announcement on two coal block auctions which you have won. So, if you could give more details as to when are these mines you are expecting it to like come into production, what benefits that one can expect from this or is this more like securing…
Ajay Kumar Saraogi
No, no, it is a long-term benefit. It is going to give us substantial benefits going forward. So we have won two coal blocks, one at Shahdol and one at Mahan, both in Madhya Pradesh. So, Shahdol, I mean, the first block is a smaller block, which is not — that block we have to work from the beginning.
We have already done the — vesting agreement has been done and now we have the full team on board for the block and we have initiated a plan to start work at that — to do the mining lease — I mean, the mining evaluation and everything, procurement of land so that we are able to — I mean though the timeframe given by the government for commissioning the block is by FY ’29, but we are targeting at least one year or 15 months earlier. So that is the status for the block.
The second block which is already partially developed and which is a bigger block that we are in the process and within the month of November, we shall be having the entire agreement with the government and we already — we have made out an action plan for what to be done. So, immediately after the agreement, the site would be handed over to us and we should be able to start work at the site. And we feel that we are planning that maybe — exact timelines we will know once we go to the site, but we plan maybe in 30 months, we are able to commission this block.
This commissioning of the both the coal blocks is going to, one, secure our fuel especially for the central India, which is dependent on linkage fuel and domestic fuel that is — and the fuel cost would be far, far cheaper. Today, we are getting linkage fuel at about INR1.50 to INR1.60 per 100 GCV — NCV. This would come at a much lower around INR1 max, outer limit INR1.10.
Navin Sahadeo
Interesting. So, this can — even if not now, at least three years down the line this…
Ajay Kumar Saraogi
Yeah. Yeah. So, many companies, I mean, if you look at in that region, everybody has a coal block. So we are fairly at a disadvantage on that concern. So we will not be at a disadvantage as compared to the competition. And maybe, I mean, if that fuel works out, we are also working out, we can also see whether we can feed some volumes to the northern plants also because it makes a business sense. So we have options. But central plant definitely where we have north Line 2 is coming up, where the major expansion is there. So it will secure fuel over there at a very good price.
Navin Sahadeo
Sir, in your last comment, you said no second line north…
Ajay Kumar Saraogi
No, no. Sorry, I said the second line of Panna. So we are already doing two expansions are there. So, that will have about — that will become at a single location the largest point for us over 20,000 tons of clinker.
Navin Sahadeo
Understood. If I can just slip in the one last question. What is now the game plan for the paints business, JK Maxx, because now we are already seeing advertisement of JK Maxx Paints on pan India news channels as such? So if you could first of all just give us that how many touch points are there, how many dealers we have as of now and what is the game plan so that we can get a broader perspective about the paint business? Does this mean that since the advertisements and these are coming up, there could be a further cost to it in terms of branding and etc.? Thanks.
Ajay Kumar Saraogi
No. So, I will answer the second question first. The branding cost and all, as we said, is part of INR600 crores which we have committed to the paint business. That is even — and we would like when the paint business — and so there is no further commitment beyond INR600 crores. And the total plan from a journey of — to 300 — close to INR300 crores this fiscal and to INR600 crores by FY ’27 is all part of the INR600 crores and by which time the business should become self-sufficient. So, that is a plan.
Navin Sahadeo
Yeah. Yeah. Helpful.
Ajay Kumar Saraogi
For any further clarifications, you let me know.
Navin Sahadeo
That’s helpful. Thank you. Thank you.
Operator
Thank you. [Operator Instructions] We will take the next question from the line of Abhishek Poddar from HDFC Mutual Fund. Please go ahead.
Abhishek Poddar
Hi, sir. Thanks for taking my question. Just one regarding the white cement. We have seen realizations falling in last few quarters. How is the market there? Can you talk about the competitive landscape there, how the margins are doing and where do you see the bottoming out?
Ajay Kumar Saraogi
The paint manufacturers, especially Asian Paints, continue to be very aggressive as far as putty is concerned. And the dip in realizations is only on account of the putty — realizations dip in putty. So we expect though there has been some correction, I think, I mean, we were thinking earlier that in last year March, that it has already bottomed out. But the onslaught by Asian continued.
However, I mean, after recent in July after announcing some increase in the paint pricing, they also increased some pricing. But still some hidden discounts and other things do continue. We feel that this may have bottomed out, but it continues. Putty field continues to be very competitive and Asian Paints with all that they have already taken the first position in the putty field. They have become the largest player of — I mean, though they don’t have any production facilities, but they are still the largest seller of putty with a market share of close to about 30% as against 24% for Birla and 22% for us.
So that is the position for the putty. We are — I mean there is a growth for us year-on-year, but we are not able to match the growth of which is there by Asian Paints. Not even UltraTech or nobody — none of the other putty players are, even some paint manufacturers, though they are growing, but they are not growing at the pace which Asian Paints is growing in terms of putty.
Abhishek Poddar
Understood. This is very helpful. Sir, just one question or more. How do we think volumes here? Like, it is 1.7% last year. Should we think about growth this year? And if you can give some guidance that how the industry is growing in this?
Ajay Kumar Saraogi
So, if you look at the putty should be growing at about 8% to 9% — should grow about at 8% to 9% this year. And we are trying to work — I mean see that we grow at least 5%, though our internal target is definitely much higher. But as of what it looks anything between 5% to 6% should be our growth numbers.
Abhishek Poddar
Understood. And just one last question. On the gray cement side, are you already seeing some green shoots in demand? If you can talk about how the season is, October is and how do you expect post…
Ajay Kumar Saraogi
No, October definitely much better than what the September is. But some of the government spending, that has to really come in full-fledged and I think that should come from November onwards.
Abhishek Poddar
Understood, sir. Thank you, and all the best.
Operator
Thank you. The next question is from Raghav Malik from Jefferies. Please go ahead.
Raghav Malik
Yeah. Hi. Am I audible?
Ajay Kumar Saraogi
Yeah. Yeah.
Raghav Malik
Yeah. Hi, sir. Thank you for the opportunity. I just wanted to check on the capex target for the year. Are you still retaining the same target of INR1,800 crores, INR2,000 crores for FY ’25 given that we’ve done INR500-odd crores in the first half?
Prashant Seth
No, no, it is projects are on the stream, and we are maintaining the capex targets.
Raghav Malik
Okay, sir. That’s all from my side. Thank you.
Operator
Thank you. The next question is from Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar
Hello. Yeah. Good evening, sir. My question is on your profitability. So, you said that realizations have benefited from maneuvering of markets during first — this quarter. So, next quarter, it should normalize like versus industry peers, your realization trend versus other peers?
Ajay Kumar Saraogi
Yeah. So, next quarter, it should match with the industry, but suppose industry shows a growth of 3% over the quarter and there is no dip. So, that will not be there. We have to then compare the situation vis-a-vis first quarter and where the industry is standing vis-a-vis first quarter and this quarter in Q3, and we will be at par with that.
Prateek Kumar
Okay. So, we will have a lower realization growth, but will that be offset by better cost performance Q-on-Q?
Ajay Kumar Saraogi
There will be definite cost performance, there will be definitely improvement in volumes. But now with increased volumes, we will be catering to all the segments because on a long term we cannot — on medium or long term, we cannot afford to lose any segment if we have to maintain the volume growth. In Q2, we did not have the volume because of the maintenance.
Prateek Kumar
Right. One of the large peers talked about realization improvement to the tune of INR200 per ton may flowing to EBITDA per ton. So, is that kind of improvement which we should also look at?
Ajay Kumar Saraogi
Look, we will be at par with the industry. One, this realization, it will not be that the top players show that realization and we don’t show it. If the prices improve, we will be at par, we will not behind any producer.
Prateek Kumar
And the last question on October volumes. So, because of festive timing changes, it will still be a decline year-on-year for the volumes for the month?
Ajay Kumar Saraogi
No. Actually, I think we should be showing a growth year-on-year also in October.
Prateek Kumar
Sure. Thank you very much. These were my questions.
Operator
Thank you. [Operator Instructions] The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Rajesh Ravi
Hi, sir. Good evening. First question pertains to your capex. So you already spent INR1,400 crores on consol basis. And you are saying that INR2,000 crores is the annual target for FY ’25. So are we looking at the second half to be so dull on the capex or?
Prashant Seth
No, we have spent INR750 crores till now out of the target of INR1,800 crores, INR1,900 crores.
Ajay Kumar Saraogi
From where did you get INR1,400 crores…
Rajesh Ravi
Sir, from your half yearly balance sheet cash flow statement, consol cash flow it is INR1,400 crores. I was referring to that number.
Ajay Kumar Saraogi
Okay. But I think we can clarify this to you.
Prashant Seth
We will check this cash flow number and report.
Ajay Kumar Saraogi
And we will check up because the number what is included will clarify that because the actual expenditure is around INR750 crores, INR800 crores.
Prashant Seth
INR750 crores.
Ajay Kumar Saraogi
INR750 crores, which is the capex. But any other thing is in the cash flow, it is showing. But — and the all other expenditure is as per the plan because there, nothing new has happened. So, we still continue to — on the — the project is on as per the schedule. So, we continue to spend on the project in the same manner. So, that I don’t think so, and whatever other expenditure which we have done on the normal capex and all, they are as per schedule. There’s nothing…
Rajesh Ravi
Okay. And second on the volume growth, see, first half our gray volume is flattish and white volume we have seen 5% decline. You are maintaining 10% volume growth for the gray business for full year. So are you confident the second half will be able to deliver 20% volume growth in the gray cement business? And similarly for white and putty, I suppose you guided 5% growth against 5% decline. So, second half, a 10% growth, do you see green shoots good enough to support that kind of volume numbers?
Ajay Kumar Saraogi
So, in gray, as I said earlier that our numbers, we should be anything between 6% to 7%. We are talking about anything, be it that the numbers. And in case of white, I mean, there is no negative growth. I mean, the white, if you look at the volume numbers, I mean, it is not — I mean, the total number, it is year-on-year sales is about 3% growth.
Rajesh Ravi
For which — okay.
Ajay Kumar Saraogi
See, last year Q2 was…
Prashant Seth
Six months, you can…
Rajesh Ravi
Six months, I am referring to six months numbers.
Prashant Seth
Even six months it is higher. See, we have like combined number of 7,86,000 tons as against 7,61,000 tons six months last year. And cash flow also, I am looking at the consolidated cash outflow and the capex is INR745 crores. Where did you get the number of INR1,400 crores?
Rajesh Ravi
I’ll recheck my number.
Prashant Seth
Yeah. You please check both the numbers, the white business volume, this, everything.
Rajesh Ravi
Okay. Yeah. I think these are all the — if I could just chip in one last question. You mentioned that you are looking at INR50 to INR60 savings through logistics and another similar amount of savings you were looking from the — inching up of green power share, right?
Ajay Kumar Saraogi
Yeah. Yeah. On use of alternate fuel and…
Rajesh Ravi
Alternate fuel and all. So, basically, FY ’25 and ’26, total INR150-odd which you are looking over next two years, ’25-’26. So, it will be equally split between both the years the savings?
Ajay Kumar Saraogi
What I said, we should see an exit of about INR60 in March.
Rajesh Ravi
Okay. On — cumulatively INR60 rupees in this year?
Ajay Kumar Saraogi
Yeah. So, we should see broadly a INR60 exit in sometime March and maybe balance we should see in FY ’26.
Rajesh Ravi
INR90 odd you are looking at for FY ’26.
Ajay Kumar Saraogi
Yeah. Yeah.
Rajesh Ravi
Okay. That’s all from my end. Thank you.
Operator
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi, sir. Sir, just a couple of data points. So, blended mix for this quarter and road-rail mix was how much?
Prashant Seth
The railroad was — it was — rail was only 9%
Shravan Shah
Okay. And blended mix?
Prashant Seth
70%.
Shravan Shah
70%. Okay. And, sir, for this quarter, how much was the incentive that we have booked?
Prashant Seth
It is INR58 crores.
Shravan Shah
INR58 crores. Okay. And for all the 6 million ton expansion, so previously we said that December ’25, next December, we will be starting. So that timeline remains intact or any update there?
Ajay Kumar Saraogi
By December ’25, so first quarter — I mean, the last quarter, end of third quarter, beginning of fourth quarter should be the commissioning.
Shravan Shah
Okay. Got it. And also, is it possible to share the fuel mix for this quarter, how much was the pet coke, imported coal and…
Prashant Seth
By heat, pet coke was around 75% and balance is the alternate fuel and the imported.
Shravan Shah
Okay. Got it. And sir, is it fair to say that this quarter — let’s say at a consol level, if we look at 11.1% kind of EBITDA margin. So, the white cement or let’s say whatever way we can look at, gray margin would be much lower and white is still higher than this blended average?
Ajay Kumar Saraogi
See, you have to arrive at that number yourself. We are not sharing. See…
Shravan Shah
No, directionally just trying to understand because as you mentioned that the putty, significant competition is there. So, just trying to see whether that margin has also come off decently there also.
Ajay Kumar Saraogi
No. What I would say, yes, I mean, the gray business margins would be marginally lower in this quarter as compared to the white.
Shravan Shah
Okay. Got it. Got it. Thank you and all the best, and Happy Diwali, sir.
Ajay Kumar Saraogi
Thank you. Same to you.
Operator
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.
Vaibhav Agarwal
Yeah. Thank you. On behalf of PhillipCapital (India) Private Limited, we thank the participants for joining the call and thank you very much, sir, for giving us the opportunity to host the call. Thank you, Michelle. You may now conclude the call. We wish you all a very Happy Diwali and a very Happy Dhanteras. Thank you.
Ajay Kumar Saraogi
Thank you, everyone, for joining and wish you a Happy Dhanteras and Happy Diwali.
Prashant Seth
Thank you.
Operator
[Operator Closing Remarks]