J.K.CEMENT LTD (NSE: JKCEMENT) Q3 2025 Earnings Call dated Jan. 27, 2025
Corporate Participants:
Ajay Saraogi — Deputy MD
Prashant Seth — President of Business Information & Investor Relations
Analysts:
Vaibhav Agarwal — Analyst
Jyoti Gupta — Analyst
Amit Murarka — Analyst
Unidentified Participant
Pathanjali Srinivasan — Analyst
Sumangal Nevatia — Analyst
Prateek Kumar — Analyst
Navin Sahadeo — Analyst
Ritesh Shah — Analyst
Shravan Shah — Analyst
Presentation:
Operator
Thank you Ladies and gentlemen, good day and welcome to the Q3 and Nine-Month FY ’25 Earnings Conference Call for JK Cement 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] I now hand the conference over to Mr Agarwal from PhillipCapital. Thank you, and over to you, sir.
Vaibhav Agarwal — Analyst
Thank you, Reyo. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q3 and Nine-Month FY ’25 call of JP Cement Limited. On the call, we have with us Mr Ajay Kumar Sarawi, Deputy Managing Director and CFO; and Mr Prashant, Business — Head of Busines Information and Investor Relations. I would like to mention on behalf of JK Cement Limited and its management that certain statements that may be made or discussed on this — today’s conference call may be forward-looking statements related to future developments and statements — statements 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 statements 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 Mr Management of JK for their opening remarks. We should be by with Q&A. Thank you and over to you, sir out, sir. Thank you.
Ajay Saraogi — Deputy MD
Thank you,. Good evening, and welcome to Q3 call. The Board of Directors met on 25th of January to review the working for the quarter ended 31st December 2024 and nine-month period April to December ’24. The major highlights are that in this quarter, our net sales was INR2,606 crores as against INR2,322 crores of previous quarter by an increase of 12% though year-on-year, it was lower by 3% and the revenue from operations was higher by 14% at INR2,716 crores as against INR2,392 crores or and INR2,784 crores last year, which was at as compared to year-on-year, it was lower by 2% and previous quarter it was higher by 14%. The profit — the EBITDA during the quarter was INR489 crores as against INR273 crores, an increase of 79% vis-a-vis previous quarter, though it was lower by 20% as compared to year-on-year position.
The EBITDA margins during this quarter was 18.7% as compared to 11.7% in the previous quarter and 22.6% previous year. The profit before-tax for the quarter was INR295 crores as against INR65 crores in the previous quarter and INR415 in the previous year. The profit-after-tax was INR205 crores as against INR45 crores and INR289 in the previous year. The EBITDA per ton for the quarter was INR1,040 as against INR649 per ton in the previous quarter and 1,335 in the previous year. If we see the position for the nine-month period for the standalone, the net sales was INR7,493 crores for the nine-month period as compared to INR7,707 crores in the previous year.
The EBITDA was INR1,241 crores as against INR1,458 crores, a drop of 15%. The EBITDA margin for the nine-month period was 16.5% as compared to 18.7% in previous year, a drop of 13%. The profit before-tax was INR650 crores as against INR850 crores previous year. The EBITDA per ton was 910 rupees for the Nine-Month period as against 1,091 these are the major highlights. The balance sheet position, the gross debt as on 31st December was INR4,863 crores as against INR4,593 crores as of March. The cash position was INR1,755 crores as against 2011 of last year. The net-debt was INR3,108 crores as against INR2,582 crores. The net-debt to EBITDA was 1.74 as against 1.29. These are the major highlights.
Besides the Board also reviewed an opportunity in the region of J&K and decided to invest in Siemens which has a capacity of 0.42 lakh tons, 0.42 million tonnes and it is proposed to acquire 60% of the equity of the company. And the company proposes to enter into the shareholders agreement and the share subscription agreement and the deal would be — this would however, be subject to the completion of the due-diligence process and some of the conditions precedent which are likely to get completed within next three to six months time. So this has been the major position for this quarter. I’ll be pleased to address your queries. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from Joti Gupta from Nirmal Bang. Please go-ahead.
Jyoti Gupta
Good evening, sir. Thank you so much for the opportunity. Good set of numbers. Two questions, sir. One is, I understand that North has been extremely doing very well and 4th-quarter also seems to be — it seems to remain robust. Two things, one, just that since the volume growth has been there, yet the raw-material cost come down on a Y-o-Y basis has grown — increased on a Y-o-Y basis while PAR go declined substantially by 19%. Could you please explain why we’re not commensurating with the raw-material cost increase? The second thing is, has the plant that we acquired in Orissa stabilized completely and has it become breakeven now? So which means any losses from the north — the East plant in Orissa is not — has no implications on the overall EBITDA? And plus what is the implication apart from the market-share for SASCO, what other — how do you — do you intend to increase the capacity and what in what phases would you actually increase the capacity for SASCO? Thank you.
Ajay Saraogi
So I’ll answer them in the power and fuel expenses, if you see, they have increased during the quarter as compared to previous quarter. Though the volumes overall, if we see they have been more or less flat and the clinker production was lower because in — because in the previous quarter also and in this quarter, there has been some shutdown in the previous quarter, so the power fuel consumption was lower and in this quarter we also see a lower fuel pricing as compared to previous quarter.
Jyoti Gupta
Okay. And the plant in the nor in the East or is it the one we actually acquired.
Ajay Saraogi
So the one we acquired, we have done some modification in the plant and that has now been completed, it’s at completion stage. And I think from the — from next fiscal onwards, we proposed that whatever we will be operating the plant at full capacity and would be generating profits. Though in this year, up till now, there has been some losses at that and plant and in the Nine-Month period, there has been a cumulate cumulative loss of about INR9 crores.
Jyoti Gupta
So we see it profitable despite buying clinker from the open-market or have we acquired some reserves over there and we’d be able to.
Ajay Saraogi
We are not buying clinker from the open-market. We are getting the limestone. We don’t have a long-term limestone arrangement for a higher capacity. Whatever the existing capacity, we are getting the limestone, that agreement is already there. So the clinker is already operating there. So there are certain production inefficiencies and some modernization had to be done. This work is at advanced-stage and it’s about at the completion stage and will be operative within this quarter, the plant would be normalized and we are going to launch our brand also in this quarter. So with that from next year, I mean from post for FY ’25, ’26, we see an EBITDA — positive EBITDA from the plant.
Jyoti Gupta
So I — correct me if I’m wrong, we are not really present in the East market. So there’ll be some selling and running expenses which should build-up in the 4th-quarter and the subsequent 1/4.
Ajay Saraogi
Sorry, we are not — we don’t have any big plans because it is a very small region and we have a small quantity also. So there is no big spent which is of significant nature, which needs to be specified and told that we don’t have any such plans.
Jyoti Gupta
And sir, what about Safko? I would like to understand.
Prashant Seth
So apart from sorry so Safko, this is a plant in in the Srinagar and this is a capacity of 0.42 million tonnes. And presently the clinker capacity is about 0.26 million tonnes and the plant is operating at a lower efficiency, though when it will not be on the numbers, we can say it is 40%, but in the region, in the valley, we operate the plant only for practically for about nine months only. So one, it is already a profitable company. We — there is a EBITDA margins of about INR1,500 a tonne. But with — we see that there are immediate opportunities in improving the performance of the plant and to get an increased profitability by another INR400 a ton.
Besides, we can — we have a plan, but we have studied the plant. There is an opportunity to increase the clinker capacity to about 1,000 tonnes per day with a capital outlay of about INR50 crores to INR60 crores. With that, you know we would be able to increase the present — the present profitability in that plant is around INR24 crores, which is inclusive of the SGST benefit, which is we will get benefit both on central and state. So it’s a full exemption. So that — including that and which is available up to 2031. So we — we are hopeful to, one, increase the profitability, take it up to INR2,000 a ton and at the same time, increase the production capacity from present levels to more than 100% over a period of one, one and a half years.
Immediately after taking over within six months, we’ll be able to step-up to about additional 60% 70% and then another 60%, 50% after we do the capex. The — this plant also has a mining reserve spread over 144 hectares and reserves of about INR123 million, which gives an opportunity for further expansion, which a view would be taken not immediately. Once this is a new region, we evaluate the region, we will see how the things are, you know, politically and otherwise, this is a new — it’s a new region for us. We need to understand the things and maybe after three to five years, a call may be taken depending upon the situation to further expand there or not.
Jyoti Gupta
The other thing is, sir, INR174 crore is 60%. So anytime once it this?
Ajay Saraogi
Pardon?
Jyoti Gupta
I said 60% at INR174, so your plans to acquire the full stake of by 200%.
Ajay Saraogi
So the value is INR290 crores and 60% is INR174 crores.
Jyoti Gupta
So and the refurbishment cost apart from that, does it include.
Ajay Saraogi
Hello?
Jyoti Gupta
Hello, sir, refurbishment cost? Sorry. Am I breaking.
Ajay Saraogi
Refurbishment cost is about INR60 crores in all, which will be met which from the operations of SAFCO itself.
Jyoti Gupta
Okay. And the 60% will — will become 100 by when or is it going to be 60% for the next two, three years?
Ajay Saraogi
No, there is — we do not know about that because there has been — there were no — there is no such immediate agreement. We will see going-forward if it is possible or not. But as of now, when it is a joint-venture, which is going to continue at 60-40.
Jyoti Gupta
Okay. And the profit-sharing will also be at 60-40.
Ajay Saraogi
So yeah, of course, that’s the equity, so it would naturally be that.
Jyoti Gupta
Thank you so much, sir thank you.
Operator
[Operator Instructions] The next question is from Amit Murararka from Axis Capital. Please go-ahead.
Amit Murarka
Yeah, hi, thanks for the opportunity. So great numbers. Congrats on that. But last quarter, you had a lot of one-off costs. Just wanted to confirm that this quarter, was there any one-off in the result or it’s just absolutely normal quarter now?
Ajay Saraogi
Yeah, this has been a more or less normal quarter.
Amit Murarka
Sure. And on the capex front, like what is the number that you’re looking at now for ’25 and number for ’26 as well.
Ajay Saraogi
So CapEx like we have planned around INR1,900 crores of capex in this year and next year capex would be in the range of INR13 sorry, I didn’t get the next year number. Said earlier, we remain as it is, except whether you can take it as a part of capex or thing, this INR175 crores on this SAFCO acquisition would be additional.
Amit Murarka
Yeah, so 1900 plus this FCO number.
Ajay Saraogi
So FFO number will come actually in the next fiscal year. This was not going to come. The payout will be sometime next fiscal only, beginning next fiscal. Okay, and what is the number for next year we mentioned? Next year INR1,700 crore-plus the SAFCO acquisition, like INR174 crores. Sure. So even if you see now the INR1,700 crores will include major is for the line two, which is about INR1,400 crores and INR300 crores is the normal capex, broadly the broad numbers if you look at. So that would be the numbers 14 plus INR3 plus FO. These are the numbers.
Amit Murarka
Understood. Understood. And also in terms of the future expansion potential that JSL made and and others, like is there any progress either in terms of approvals or anything that you see?
Ajay Saraogi
So we are just working on all the approvals for and we are — we would have a clear picture sometime by June this year.
Amit Murarka
Okay, okay. And any like can we think of when can this tentatively start in terms of capex? I mean, can it — can the capex start in ’26 itself, FY ’26 itself.
Ajay Saraogi
Amit see much would also depend on the scenario. So once you know we are — yes, as far as this calendar year is concerned, we would first concentrate on completing line two, which — which is present on-track and the expansion work is on-track and we are well set to commission the whole thing within this — within FY ’26. So there is no — so we are confident on that. That there has been some delay in the approvals for the grinding unit, where also you know we have done the Bumi and now we expect that to be, you know within 11 to 12 months. So by December this year or January next year, the grinding at Bihar would also be operative. So yes, by that time, once we have all the approvals, then we will take a stock of the market situation and then take a call on the various opportunities which we have and plan accordingly?
Amit Murarka
Understood. Understood. And lastly, like what is the expectation on the KKR fuel cost now.
Unidentified Participant
See, fuel cost is already down and there is no — it is down.
Ajay Saraogi
It has come down. It was I think some of the in this quarter. Again, there has been some — as we speak, there has been some hardening of the — I mean, some prices increases there. We have to wait-and-watch. But you know, the quarter December was quite good in terms of when we placed orders for pet coke at a very good rates ranging from between $95 to $105. So that has been the — but we do not know going-forward what will be the situation as we already seeing some hardening of the pricing?
Amit Murarka
And what was the number this quarter?
Ajay Saraogi
INR150 sir. Okay. Okay, sure. That’s all from my end. Thank you.
Operator
Thank you. [Operator Instructions] Next question is from Patanjali Srinawasan from Mutual Fund. Please go-ahead.
Pathanjali Srinivasan
Hi, sir. Am I audible?
Ajay Saraogi
Yeah.
Pathanjali Srinivasan
Thanks. Good quarter.
Ajay Saraogi
Yeah, sorry, you have to be a bit louder. Come closer to the mic please.
Pathanjali Srinivasan
Yeah, is it better now?
Ajay Saraogi
Yeah, yeah, it’s much better now.
Pathanjali Srinivasan
Yeah. So congrats on good set of numbers, sir. Couple of questions. One is what would be the incentive that would be included in our other operating incomes in this quarter?
Ajay Saraogi
Yeah. So incentive going-forward and even now, if you could say broadly around INR20 — I mean it would be INR25 crores a month, INR75 crores per quarter. Okay. Crores here and there depending upon the volume and other things, some incentives that — so that would be the whole thing. It’s around INR75 per quarter.
Pathanjali Srinivasan
Okay. Okay. So the additional difference here like in the current quarter, the number is some INR110 crores. So what would this be? What would the differential be? Like what would the nature of that?
Ajay Saraogi
INR110 crores include the other operating incomes also. It is not totally the incentive. Yeah, yeah. I’m just trying to understand what the different. There was some additional incentive on account of the start of the incentive for the plant and but now also we have got the additional mean approval for the capex. So there is some incentive of INR10 crores to INR15 crores relating to the previous period which is accounted for in this quarter.
Pathanjali Srinivasan
Got it, sir. And just one more question. The white cement realization in the overseas has gone up quite meaningfully. If you would tell me like what was the reason for this?
Ajay Saraogi
Pardon I didn’t follow the white cement realization in the overseas business has gone up pretty meaningfully. So could you tell me like what is the background for this? No, it is actually the — because it is regarding the Fujara plant. So Dubai economy is picking-up, there is good real-estate growth. And that is why I mean we are the — we are able to get good results in the UAE operations.
Pathanjali Srinivasan
Okay. Okay, sir. Yeah. Thank you.
Operator
Thank you. [Operator Instructions] Next question is from Sumangal from Kotak. Please go-ahead.
Sumangal Nevatia
Hi, thank you sir, for the opportunity. Sir, just want some more color on the white cement and putty market. If you could just share how are the margins and the overall demand-supply situation in the domestic market? Is it deteriorating further? Is it stable? Are there any green shoots visible.
Ajay Saraogi
So the putti market continues to be very, very competitive so both Asian paint and Birlab they are very, very aggressive. So as a result, you know I mean put the prices are under pressure and Asian paints with what have already reenter. I don’t have any management the largest market share of — but so though the demand is in, there has been a growth in about 8%, 9% overall — more than us, we have grown by about 4% and Asian paint has grown in double digits. So this platform still remains very competent. There is an absolute growth in 1 of the white business. But otherwise, it is very competitive, it is having an impact on the margins. till we are able to operate that and get EBITDA margins ranging between 15% to 20% in the white business.
Sumangal Nevatia
Understood. Understood. That’s helpful. Sir, from your commentary on the cost side as far as variable-cost is concerned, is it fair to — I mean kind of infer that we’ve kind of — all the cost-savings largely because of the commodity price deflation is behind us and from here on, it will basically depend on how coal prices trend.
Ajay Saraogi
So yeah, but there are certain some more opportunities there in terms of we are increasing the share of our green power and we are — we continue to work on increasing the AFR share. And besides that, you know, we are working on the logistic costs. So these are the areas where still we have got certain benefits of — which have accrued, but there are — we see some more, as we said on a journey of about INR150 to INR200 a ton. We may be closing the year-by INR40, INR50 utilization of that, but some other about INR75 rupees a ton you know we will get over a period of time.
Sumangal Nevatia
Understood. And sir, is it possible to share how is the prices now say in January versus the average of 3Q in our key markets, North and central.
Ajay Saraogi
So except I think marginally higher in the month of January on the average of Q3, but this is just a beginning. We have to see how it goes. And though we are hopeful, yes, it could be better than Q3.
Sumangal Nevatia
And it’s similar both in North and central, the trend?
Ajay Saraogi
Yeah, both, but it will depend, see, because when the year-end comes and there is a pressure on volumes by everyone, does it have any impact on the pricing.
Sumangal Nevatia
And sir, if I may just squeeze in one last question, overall in a growth of — I mean mid-single digit, and how has been the market growth in both central and north in the 3rd-quarter?
Ajay Saraogi
So see, our growth in — naturally most of our growth is coming from the central markets because our expansion is in the central market. Our growth in the North is — we may be marginally at par or maybe marginally lower than the overall because we did when we had some maintenances, so at that point of time, we did cut-down some of the non-trade volumes, but we have been able to maintain our trade share across, but the major growth factors is in the Central India where the major investment is being done. There definitely we are growing much more than the markets.
Sumangal Nevatia
Got it. Understood. Thank you, sir for all the answers, all the best.
Operator
Thank you. [Operator Instructions] Next question is from Pratik Kumar from Jefferies. Please go-ahead.
Prateek Kumar
Good evening, sir. My first question is on incentives. You said INR75 crores per quarter. So this run-rate based on future expansions and ongoing future expansion ongoing run-rate, this number is could stay stable for like maybe a number of years, like three to five years or like how is the incentive going to pan-out?
Ajay Saraogi
No, it should remain stable because what would happen now like for North going-forward, the North incentive at which we are getting for at-will get tapered off. But however, you know the central incentives would increase. So we see in terms of the value, it may remain same, but it could have a lower impact if larger volume numbers, say, North is also excluded, South gets excluded. So that may have some mix variance. Otherwise, we see that about INR75 crores, you know each quarter we should get as an incentive.
Prateek Kumar
And is there any difference in timing of various state governments for whatever reason of — and in those states fiscal year and same.
Ajay Saraogi
So timing difference, it takes about a year or so in realization. So what we see meant vis-a-vis, whatever did get accrued in this year, the actual realization is more or less of the amount which accrued last year. So it’s a one-year gap. So whatever amount gets accrued this year we should get the payment in the subsequent year.
Prateek Kumar
Sure. Thanks. And one more question on your profitability, we have recorded like industry-leading EBITDA per ton this quarter. And as you said there is no specific one-off either in — I mean, there is like small one-off in incentives due to, but still like INR1,000 is the unit EBITDA for this quarter. There is some price increase in Q4 and operating leverage like both of this will lead to like probably growth to like INR1,100 or so like in next quarter, how do you see profitability in Q4?
Ajay Saraogi
So Q4, it all depend upon what is the price increase over Q4 or Q3. So whatever is the price increase over Q3, I think that much we could — we are confident of getting that incremental EBITDA. Sure, sir. This is my question. Thank you.
Operator
Thank you. [Operator Instructions] Next question is from Naveen from ICICI Securities. Please go-ahead.
Navin Sahadeo
Yeah, thank you for the opportunity, sir. Thank you. Am I audible?
Ajay Saraogi
Hello. Yeah, yes, please. Navin, please go-ahead.
Navin Sahadeo
Yeah. Thank you. Sir, a couple of questions. So first of all, paints, if you can just throw some light, how was the performance in this quarter in terms of revenue and EBITDA, I think in past quarters there have been some losses in the paint business. So does that continue if you can give some information there, please?
Ajay Saraogi
So if we talk about the revenues for the paint, in this quarter, we did about INR83 crores as the net revenue vis-a-vis, which was INR53 crores in the previous quarter. And year-on-year it was INR47 crores. And in the nine-month period, we have done INR200 crores as against INR101 crores in the previous year. So you know, we have been able to, I mean pep up this business quite well. Yet as I mean even on — yes, on the profit, it is nothing surprising, but this was there that we were — to establish the brand and there is — I mean the fixed costs are also will be on the higher side. In this quarter, there is a loss of INR17 crores, which is more than what it was in Q2 of INR11 crores. And in the nine-month period, we have had a loss of INR38 crores and we should be ending the year with a loss of approximately INR50 crores plus marginally over INR50 crores. This is how we see and that is as per the plan and we expect the top-line to be around INR275 crores plus. This was an indication what we had given INR275 crores to INR300 crores despite the fact that this year there has been a big destruction by launch of Bilda Opus.
Navin Sahadeo
And just to understand this better, this loss of INR17 crores is bulk of it in the stand-alone entity or it could be in the consol entity?
Ajay Saraogi
It could be in the consol entity.
Prashant Seth
No, it’s in the consol.
Navin Sahadeo
Okay. So the entire loss is in the consol entity.
Prashant Seth
Yeah, yeah, because spent loss not in the standalone entity.
Navin Sahadeo
And despite that — I’m saying despite that, the difference between consol and standalone remains positive at about INR2.5 crore EBITDA.
Prashant Seth
Yeah, this is because of you know good profits from the Fujara plant, so Fujara is really doing good then, right? Oh, yeah. Jara, we had about INR24 crores as an EBITDA during this quarter. This was same as previous quarter and in the Nine-Month period, we have got about INR68 crores as EBITDA as compared to INR55 crores in the previous year.
Navin Sahadeo
Wonderful. Wonderful. This is good. Great to know that. So from a volume perspective, sorry, I’ve not done the math, but what is the utilization at UAE now and what is the scope there? Because if the profitability is good, can we expect further improvement or recovery there?
Ajay Saraogi
No, see again UAE though I mean it is — but it’s always — it’s a very typical market, you know, with now I mean going — I mean as we foresee going-forward next year would become a bit challenging because Asian you know, is planning to set-up a white cement plant in the UA, which should come sometime middle of this year. So not a big capacity but definitely that is going to have some disruption.
Navin Sahadeo
In the UE market you’re saying?
Ajay Saraogi
Not exactly market, but again, they would — this is primarily for self-consumption. They would bring in clinker from there to India and maybe use for their put production. So that’s a plan. We do not know what is there if they have some other plans though — but the capacity is not big. So — but having said so, it will have — since we being a major supplier to Asian paints for their putty, it will have some disruption on, you know, the volume numbers for white cement, both in the UA and India because we will be losing a big customer.
Navin Sahadeo
Is it possible to share how much is the volume quantity?
Ajay Saraogi
Close to combined close to about a lakh tons.
Navin Sahadeo
Okay. A lakh tonne volume 100,000 tonnes is what we sell to Asian paints on annual basis, which can be impacted next year.
Ajay Saraogi
Yeah, which can be. Understood. And lakh tonnes. Under 18 lakh tonnes that is a — but not full-year may not be impacted, but partially, yes.
Navin Sahadeo
No fair point, the market is also growing.
Ajay Saraogi
So that is also so we have been working out on other avenues. As we said, even for Fujara, we have a backup plan. We introduced motors, the — we had Africa as a growth area. So all that working which we had done now means it is giving some positive results. So that so we — Africa is not turning into black and even the motor is giving us profits. So — and we are trying to do a look at other revenues for white cement in the region. Yes, but so when I’m saying further though capacity utilization is — I mean, as for overall capacity utilization, it’s about 85%. But so the plant would definitely be operating around 75% plus including clinker and cement.
Navin Sahadeo
Understood. Understood. And on the gray cement bit, are we likely to face any volume disruptions in the UP region because of the ongoing Kummela and maybe one of our plants right being there. So do we see any logistic issues or some hit on volumes because of this? Just wanted to get that.
Ajay Saraogi
Thanks. Not much when it’s not affecting — not affecting as such. Yeah, is not no significant as such, you know. Understood. That way you know that Delhi will have some elections, some not any major disruption.
Navin Sahadeo
Understood. Understood. That’s helpful. And last question, was there any change in the mix in the quarter sequentially as in trade versus non-trade for the March quarter or it was broadly the same.
Ajay Saraogi
No, it is — trade was 66% in this quarter.
Navin Sahadeo
Last quarter it was 65%.
Ajay Saraogi
Oh, it improved. Okay, okay. That’s all I wanted to. One more thing, we have been able to improve upon our premium products. So this quarter had the highest percentage of premium products.
Navin Sahadeo
Understood. Understood, sir. That’s very helpful. Thank you so much.
Operator
Thank you. [Operator Instructions] Next question is from Ritesh Shah from Investec Capital. Please go-ahead.
Ritesh Shah
Hi, sir. Thanks for the opportunity. Sir, I just wanted some clarity on the JLK venture. Sir, I was just looking at the number of limestone leases in the state. There are several of them, including several in the names of Mr Trambu. I think he is a key owner from where we are looking at the asset — looking to buy the asset from. So the question is what is the sort of competitive intensity you look in the region and how is it that we were able to pick this asset and nobody else in the industry?
Ajay Saraogi
That I will not know-how — see, we have been trying to — we have been looking at J&K for some time, two, three years. So we’ve been seeing what — what sort of opportunity is there. There was sometime you know a divestment of J&K cement also was on the cards. And then we had some friends in the region and so they connected us maybe then we had a dialogue and because nobody is ready to you know, divest when they have been there and all I think cement all the players are there since late ’90s, mid 90s. Everybody came to set-up the plant during that period. And they have a good incentive package and so everybody not — they’re not too when test or anything which needs a diversification. So we had some meetings and we could convince them that it would be a win-win position. But definitely when we started our dialog for 100% acquisition, which was not there acceptable at all. So then we came that it could be a good partnership in the interest of both the parties and this is how we got into this arrangement. And so there are multiple limestone leases across different districts over there. Do you think after your move, the competition in the region will actually increase? I don’t think so. See, again, there are five, six, seven, eight plants over there in the region with supply. I mean the limestone leases you know I mean in our case also the limestone lease earlier the land or the mining lease had to be — a company could not own those mining lease. So they were allotted to in the name of individuals and they used to lease it out to the company and now the government has relaxed that. So as a part in our case, in particular, the mining lease will get transferred in name of the company. So the extension is already there, that’s a process. So it will be extended up to 2046. And at the same time, as a next step, we propose to get the lease transferred in the name of the company.
Ritesh Shah
Sure, sir. And sir, can you detail on the sort of incentives that you are expecting and we have indicated some incremental capex over there. Is it contingent to the state’s industrial policy or the fiscal incentives and what sort of numbers we are looking at over there?
Ajay Saraogi
So they already have this SAFCO has an incentive which is available up till until 2031. So it’s a 100% exemption of SGST and GST so which you know which is around 800 rupees a ton if you convert that into the per tonne analysis. It has an impact of about INR800 to INR900 a ton and this will be continued to — this will — this will continue until 2031 and it has got — there are no other stipulations in the exemption which is available to SAFCO. I’m not aware of any other plant, But for SAPCO, it is there. And this investment, which has been done INR60 crores is only being done with a view to increase inventories because that market is 100% OPC market. The grinding capacity is 0.4, what we lack is clinical. So once — and there is a scope in modifying the production from present about 780 — INR770 crores, INR780 crores per tonne 2,000 tonnes per day. And with more our technical experience and other things, we would be in a position to increase the productivity of the clinker.
Ritesh Shah
Anything on the tax rates?
Ajay Saraogi
A tax-rate, I mean it’s a normal. There’s no special there is no incentive on the tax-rate.
Ritesh Shah
Accumulated losses, anything.
Ajay Saraogi
Yeah, there are some accumulated losses. So that we are evaluating as a part of — I don’t have them because you know that is a part of the process of the whole due-diligence. So I would not be able to not until the whole due religions is done regarding the tax, which is a part of process. We’ll not know what other tax incentives which are when losses are there as per this, what opportunities are there over there? Sure. So this is. That is a work-in progress.
Ritesh Shah
Correct. And sir, my second question was on Toshali. Sir, given we don’t — I’m not sure whether we still have clarity on the limestone over there, if at all, if we get into a MOU, how much is the rupees per ton including royalty that we’ll have to pay to the government. Sir, is there any clarity on that as yet? And if not, then why are we even considering?
Ajay Saraogi
No, no, because again, there is definitely an opportunity available. We are still in dialogue with the government and we — we have not got a regret. They are still considering our proposition. So we are hopeful. Two, even going-forward, we could see in the vicinity and some of the mining may come for auction. So if that comes into place and we take a mine and auction, so that will become again a business case for us.
Ritesh Shah
Right, sir, historically the way in which we have operated, we have been very, very conscious on the opex side. If it is through auction, it will become expensive. I’m not sure if we do MOU, whether it will be below INR300 per ton of limestone. So is it like optimal from a ROCE standpoint or is it more like regional diversification? It’s more of a strategic move that we are looking at?
Ajay Saraogi
See, going-forward, you know auction mines or limestone mines are becoming for renewal. So post 2030, you know, most of the cement which would be produced would be from the mines which have been already reautioned. I mean there is or from auction mines. So going-forward, there would be nothing available. Very, very few mine areas would be available where you have limestone where there is no premium has been paid. We have to see everything in the long-term, medium and long-term, not in the short-term. In any case even if everything goes well with the mining lease and we get the mining lease allotted at Toshali the plant would not come into operation before.
Ritesh Shah
Sir. Sir, if I may squeeze one industry level question, you did indicate that post 2030, most of the leases will be — which will be used will be under auction leases. Sir, possible based on your assessment, if you could highlight which region will see the maximum cost curve or raw-material inflation, is it central, North, South, how should — how are you looking at it, sir?
Ajay Saraogi
The older plants will have more — see the older the plant, their leases will get expired. The newer plants will have some more years to come, say the plants which started all capacity, all the mining leases which were allotted in the 80s will come for renewal.
Ritesh Shah
Right. So sir, from that perspective, sir. From that perspective, we will be very well-placed in Central India, but not so much in Northern India.
Ajay Saraogi
Yeah, yeah, some of our mines are coming for renewal, in 30 32, 35. So that is there. It is — so we have taken some — that is definitely there is — it is there for all old established players.
Operator
Thank you. A final reminder to participants for questions and no further reminders would be announced. The next question is from Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi, sir. Most of question has been answered. Couple of just a clarification on the data points. Sir, first, this clinker line, the second-line and the six MTPA. So you mentioned out of that just a Bihar likely to be either a max to max by January it will start and raised all will start by this December end.
Ajay Saraogi
Yeah. We see the clinkerization and the other to the modification in the existing grinding units at Panda, Amirpur and to get done in this year?
Shravan Shah
Okay, okay. Got it. Second, sir, in terms of the cost-reduction you mentioned, correct me if I’m wrong that in the 4th-quarter you are looking further INR50 kind of a cost-reduction and another INR75 INR75-odd in the next year.
Ajay Saraogi
No, no, sorry, sorry. As a key, cumulatively, what we have been doing, we would see some savings have already accrued by March. So some savings are there already there. So this could be 40-50 by the close of the quarter, the cumulative savings.
Shravan Shah
Okay. Okay. Okay. And the next year.
Ajay Saraogi
It is not an incremental saving in this quarter.
Shravan Shah
Okay, got it. And for incrementally next year, how one can look at in terms of cost-savings?
Ajay Saraogi
Yeah, maybe over a period of time, we could definitely see another INR50 coming in next year.
Shravan Shah
Okay, got it. Second, sir, just to get a number, for nine months, how much consol capex we have already done?
Ajay Saraogi
Nine months, we have already done capex of above INR800 crores — sorry, above — around INR1,400 crores.
Shravan Shah
Okay, INR1,400 crore. And the incentives, though you have mentioned that this quarter was a INR10 crore INR15 crore extra, so is it fair that for this quarter we have booked around INR85 cro INR90 odd crore incentive? Right, right. Yeah, yeah. Okay, got it. And sir, fuel mix for this quarter, how much pet coke would be? Would be?
Ajay Saraogi
Pet coke is normally by heat around 75%. See pet coke is higher in case of the north and the southern plants while in case of the central plant, it is lower where domestic fuel is a major fuel and pet coke is around 25%, 30%.
Shravan Shah
Okay. Okay. And sir, in the 4th-quarter at Gray Cement, I’m just trying to understand how much growth one can look at for industry where we operate or maybe for us the 9%, 10% kind of a growth one can assume.
Ajay Saraogi
Yeah, see, we are targeting, but I think we are confident that we could get about 7%, 8%.
Shravan Shah
Okay, got it. And for paint, sir, whatever the — for FY ’26 and ’27 revenue of last-time whatever you have spoken, INR400 crore INR450 crores and INR600 crores. So that remains intact?
Ajay Saraogi
Yeah. So we should — yes, I think that INR450 and INR600 crores still remains intact and we are working towards that. And in terms of EBITDA breakeven by FY ’27 only we will be able to FY ’27 should be EBITDA breakeven.
Shravan Shah
Okay, got it. And lastly, sir, road mix for this quarter would be how much same 91%?
Ajay Saraogi
Yeah, road was 91%.
Shravan Shah
Okay. Okay. Got it, sir. Thank you and all the best. All the best.
Operator
Thank you. Next question is from Uttam Kumar Srimal from Axis Securities. Please go-ahead.
Unidentified Participant
Thanks for the opportunity and congratulations on a good set of numbers. Sir, my question pertains to premium cement. You mentioned by about 16%, sir, where do you see premium cement sale moving ahead in next two years?
Ajay Saraogi
So we are working next two years, definitely we should be able to have 20% plus.
Unidentified Participant
Okay. And sir, in this premium cement share is coming more from the Central.
Ajay Saraogi
See, today Maximum, it is in the South plant, but as we are central region is a new market which we are entering as we are expanding the central region, that is why it’s taking some time. So, yes, we would be expanding at — in the northern as well as central regions.
Unidentified Participant
Okay. Okay. And sir, lastly, what would be our volume growth guidance for FY ’26.
Ajay Saraogi
So FY ’26 should be around 10% definitely from exit of FY ’25.
Unidentified Participant
Okay. Okay, sir. That’s all from my side and all the best to you.
Operator
Thank you. We take the last question from Vignesh SVK from Wealth. Please go-ahead.
Unidentified Participant
Hi, sir. Just want to understand how is the market dynamics work-in our region? Any competition from the large players?
Ajay Saraogi
So the competition from the large players remains as it was over the previous quarter. There has been no new large players, anything which is of — which is having any significant impact.
Unidentified Participant
Any pricing impact because of the.
Prashant Seth
I will not say as of now we — anything — and if there is anything, we’ll let you know, but as of now.
Unidentified Participant
Okay, sir. Thank you. That’s it from my side.
Operator
Thank you very much. That was the last question. I would now like to hand the conference back to Mr Agarwal for closing comments.
Vaibhav Agarwal
Yeah. Thank you. On behalf of PhillipCapital India Private Limited, I would like to thank the management for the call and many thanks for participating joining the call. Thank you very much, sir. We now conclude the call. Thank you.
Ajay Saraogi
Thank you. Thank you everyone for joining.
Prashant Seth
Thank you.
Operator
[Operator Closing Remarks]