Nuvoco Vistas Corporation Ltd (NSE: NUVOCO) Q2 2025 Earnings Call dated Oct. 24, 2024
Corporate Participants:
Madhumita Basu — Chief, Investor Relations
Jayakumar Krishnaswamy — Managing Director
Maneesh Agrawal — Chief Financial Officer
Analysts:
Satyadeep Jain — Analyst
Kunal Shah — Analyst
Shravan Shah — Analyst
Aditya Desada — Analyst
Rajesh Ravi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Q2 and H1 FY ’25 Earnings Conference Call of Nuvoco Vistas Corporation Limited. We must remind you that the discussion on today’s call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. The company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent development, information or events or otherwise. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Madhumita Basu, Chief, Investor Relations. Thank you, and over to you.
Madhumita Basu — Chief, Investor Relations
Thank you, Yashasvi. Good afternoon, everyone, and thank you for joining our second quarter of fiscal 2025 earnings conference call. Let me start by briefly discussing the broader macroeconomic landscape linked to cement demand, followed by a review of our performance for the quarter. The macroeconomic environment remained challenging with key indicators signaling a slowdown in capital expenditure. YTD August, Union Government capex dropped 19% Y-o-Y. Central public sector enterprises and other agencies capital expenditure fell 11% Y-o-Y in H1 FY ’25 led by slower pace of investments by railways and the NATI [Phonetic].
State government capex declined by 6% Y-o-Y in the first five months of FY ’25 following a 40% surge in the previous year. States such as Bihar, Gujarat, Haryana, West Bengal and Chhattisgarh witnessed 6% to up to 37% drop in state capex. Housing sales across top 30 Tier 2 cities fell by 13% in Q2 FY ’25, while new launches declined by 34%. The industrial landscape is also under pressure with India’s manufacturing PMI dropping to an eight month low in September and core sector output contracting by 1.8% in August, the first decline in 42 months. As you are aware, the Union Budget for FY ’25 was presented only in July following the general election with Presidential essence received in August. This delay has led to a slower rollout of capital expenditures, particularly for government funded infrastructure projects including PMAY and the Purvodaya schemes.
Furthermore, the prolonged and intense monsoon this year while the good for agriculture has hampered construction activity delaying projects and dampening demand for materials such as cement. Thus, the combination of delayed public spending and weather disruptions has created a tough environment during the current fiscal.
Now let’s turn our attention to our performance for the quarter where we will explore our progress and outlook going forward. In Q2 FY ’25, the company recorded revenue and EBITDA of INR2,269 crores and INR229 crores, respectively. Let me take a moment to break down some of the key elements behind these headline figures. Firstly, let me touch upon the volume, which declined by 5% Y-o-Y in Q2 FY ’25 attributable to the subdued macro environment outlined earlier. East and North regions faced a challenging landscape marked by demand for traction. The subdued demand has not only affected sales volumes across the industry, but has also posed significant pressure on prices.
All India cement prices experienced a dip of 4% quarter-on-quarter. Notably, the North region saw a decrease of 3%, while the East region faced a more pronounced drop of 5%. In this scenario, Nuvoco has been working on a balancing act between volume and managing prices resulting in a blended realization per ton drop of 2.7% quarter-on-quarter, which is lower than the industry average. We managed revenue per ton better than industry, primarily driven by our continuous focus on premiumization and geo optimization. Premiumization remains a key focus area for the company with premium product share in the trade segment reaching a record high of 43% in Q2 FY ’25.
Amongst the offerings, Concreto UNO, a premium cement variant, is catering to the growing demand for high-quality construction materials in the East and is gaining traction. Secondly, given significant headwinds of weak demand and pricing pressure, the company remains focused on operational excellence.
At this point, I’d like to provide an overview of the quarter’s performance with respect to key cement cost elements. Power and fuel cost per ton reduced by 3% quarter-on-quarter. The company has reached the lowest blended fuel cost in the last 12 quarters at INR1.54 per Mcal. I would like to reiterate that Nuvoco’s power and fuel cost continues to be amongst the lowest in the industry. On the raw material side, Nuvoco continues to be better placed due to its long-term slag supply agreement. Distribution cost per ton also declined by 1% quarter-on-quarter due to efficiency in operations.
On cost efficiency, we are happy to report that Project Bridge 2.0 is on track and has yielded a reduction of INR50 per ton in operating costs in Q2 FY ’25. We successfully commissioned new clinker wagon loading system at Sonadih, which enables enhancement of clinker dispatch via rail and is expected to aid in cost savings. Odisha railway siding project is expected to be commissioned by Q4 FY ’25. During this quarter, we also completed grid integration project across integrated units in Chhattisgarh enabling savings in power cost.
Our net debt as of September 30, 2024 stands at INR4,501 crores, which is a reduction of INR233 crores on a year-on-year basis. Historically, we have maintained a declining trend in net debt as debt reduction remains a top priority for us. It is important to note that net debt at the end of September is higher compared to the March period due to cyclical impact of working capital requirements. Regards to cement demand, as I mentioned earlier in my comments on the macroeconomic situation, the industry has encountered significant challenges due to slowdown in the overall capex environment, which has impacted the infrastructure sector as a whole.
Additionally, this situation was exasperated with flow down and intense monsoon. Going forward, the execution of projects announced under the Union Budget will be a key monitorable for any demand revival. Notably in the Union Budget 2024, ’25, the government has outlined several programs for the infrastructure development, including development in Eastern regions. For example, INR26,000 crores have been allocated for various infrastructure developments in Bihar. The Purvodaya scheme also focuses on the overall development of East region. This is promising for Nuvoco given our substantial presence in the East. However, the timing and pace of demand recovery will depend on the all ground execution of infrastructure and housing projects.
Additionally, sustainability of price improvement is contingent upon sustained demand growth. Meanwhile, Nuvoco is navigating these volatilities with resilience by prioritizing on premiumization, key optimization, brand strength building and operational excellence. We are confident that with our main focus remaining on operational cost efficiency, we will also see the benefit when demand and pricing cycles turn. With respect to ready-mix and MBM business, focus on innovation continues. In ready-mix business, Ecodure Thermal Insulated Concrete which helps reduce indoor temperature and Concreto UNO Concrete, India’s first hydrophobic concrete designed to protect against water damage was launched in Q1 FY ’25 and has seen good momentum in Q2 FY ’25.
The MBM business introduced Zero M Roof Shield, a single component waterproofing coating that reduces surface temperatures by up to 10 degree celsius ensuring cooler living spaces. Our commitment to sustainability is a vital aspect of our operations as evidenced by our position as one of the industry leaders in low-carbon emissions. Our positive figure for FY ’24 shows an impressive emission rate of 457 kg CO2 per ton of cementitious materials. We believe that our sustainable practice will continue to add value to various stakeholders, including the communities we serve.
With this, I conclude my opening remarks. I am joined here by Mr. Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas; and Mr. Maneesh Agrawal, our Chief Financial Officer. We are here together to answer your questions. Thank you.
Questions and Answers:
Operator
[Operator Instructions] we’ll take our first question from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi, thank you. Just first question, I wanted to check on the entire debt situation. So maybe can you help us understand what is the debt repayment schedule and are there any particular restricted covenants that can — just on the leverage wanted to get some idea.
Jayakumar Krishnaswamy
Yeah, Satyadeep, good afternoon. Thank you for your question. So first of all, in terms of our debt repayment schedule, I guess, everything is on course. This is the first quarter after many quarters where I guess the overall industry has not performed well and then consequently all the players have had a little bit of a downside. But suffice to say that in terms of our payment schedule, in terms of our covenants, I think everywhere we are on course. And as informed to investors in the past calls, we are well on the way to kind of pairing the debt to just about less than 4,000 — between INR3,500 crores to INR4,000 crores in the next two quarters.
Satyadeep Jain
Okay. But is there any main major bullet payment or something coming due in the next maybe 12 months or so?
Jayakumar Krishnaswamy
I think that’s there. I think we have to — we have a payment coming in the next — every year, I think we’ve got payments and next 10 months also we’ve got payments coming. Certainly, I think we are well on our way to kind of make sure payments will happen when it happens. And even if the continued downward — not downward, somewhat muted demand is there, I think all this has a leverage of refinancing it and should not be a problem at all.
Satyadeep Jain
Okay. Secondly…
Jayakumar Krishnaswamy
And in terms of covenants, I guess, all the — I think all of us know these covenants which are net debt to EBITDA, net debt to equity, security coverage, debt servicing, all of them were in the published results. We have to define our quarterly results to the Board as well as the shareholders and to the other sanatory bodies the team was then we are comfortable meeting all the requirements.
Satyadeep Jain
Okay. Thank you, Jay, on that. Secondly, I think last quarter you mentioned that certain particular micro markets, I’m not sure if I missed it in the prepaid market, certain micro markets like West Bengal, Bihar, Chhattisgarh particularly margins were low and the company decided to walk away from certain low-profit micro markets. Is that something that continued in this quarter? And you’re still seeing that maybe in third quarter so far these certain micro markets where you are deciding not to maybe be aggressive in this?
Jayakumar Krishnaswamy
In general, as Madhumita mentioned in her speech, one of the key strategies for the company which I mentioned in the previous calls as well as certainly one of the priorities is to ensure value over volume. That’s something which we have been doing. You’d asked this question two quarters ago also and we had a conversation discussion on the objective of company prioritizing value over volumes. As of now, we are still continuing. As regards the market scenario, I guess, this is a little bit of a — monsoon months or weak demand months for the industry. But this year specifically, the monsoon quarter has been little bit worse than the previous monsoon quarters, at least in the last six, seven years I have seen the industry. But certainly as regards to our strategy of walking away from any market, so let me just clarify to you.
Certainly, I think we will never walk away from a market, but not kind of participate aggressively in the market to ensure that we push volumes in this key market where the pricing is pretty low. But then if you really look at the market of Bihar, historical high Concreto sales has happened in H1 of this period. We are continuously increasing our premium product share in East and as well as in North. Our Concreto, regular Concreto, Concreto UNO, Duraguard Microfiber, these numbers are all kind of trending at historical high levels in terms of percentage. This quarter, we had 43% premium product sale for the company, which is the highest, at least in the last six, seven years I have seen the business. So prioritizing value over volume is important. But in certain markets where the pricing is really bad, maybe certain West Bengal, one, two, three, there are certain markets where the freight cost is high, reach is expensive and markets are inherently not that great, certainly, we will not push volumes for the sake of pushing volumes.
Satyadeep Jain
Yeah. Thank you so much and wish you all the best.
Operator
[Operator Instructions] Next question is from the line of Kunal Shah from DAM Capital. Please go ahead.
Kunal Shah
Yeah. Hi, team. So just one question on this value over volume strategy. Now one thing that I’m not able to understand is given the dealer incentives are inherently volume driven in this business. So for implementation of this strategy and pushing the premium products, we’d be paying more commission to the dealers to offset for the volume loss, right, I mean.
Jayakumar Krishnaswamy
Yeah. I guess, I will not go into all the nitty gritties of the discount schemes for the company because I think that’s something which we own it very closely, how do we run schemes and plan schemes. But if you really look at the various schemes in the market, we’ve got monthly target, quarterly target, annual targets. So the targets are all kind of based on overall volume link. But within the overall volume link scheme, we also have sub-schemes based on [Indecipherable], sub-scheme based on level of premiums sold. So those things are all added benefits to the dealers. So I guess, when we incentivize dealers to kind of on these lines, there is normally a tendency for the dealers to sell some of these more given the fact that market itself is a little bit tepid. So there’s a little bit of an added incentive for dealers to push premium or direct sale or dispatches, which is kind of helping them. So that’s how we kind of structure the scheme.
Kunal Shah
Understood. But just one or maybe just putting it the other way, so let’s say selling these premium products, incurring more expenses on the costing, packaging, advertisement, dealer discounts and taking some bit of hit on your potential operating leverage. What you’re trying to say is we’d still be making more absolute EBITDA versus a volume led strategy.
Jayakumar Krishnaswamy
We have to look at it in two parts. One is when you push absolute volumes more, then I guess the overall absolute EBITDA which the company will make will be dependent on the total amount of volumes which we sell. But the fact that the market is little bit tepid, one of the things for us is instead of participating in those markets where the contribution margin or the overall EBITDA is low, we prioritize pushing more premium in the more attractive markets. And certainly, when we sell a Concreto or a Duraguard Microfiber, Concreto UNO, the contribution margin for these products vis-a-vis a normal product in the market is much, much more and hence, the realization and hence the EBITDA levels for the company is better.
That’s one of the broad themes which we are working at this point of time. But in any case, our brands are so strong. In a place like Bihar, we are selling more Concretos than ever before. In Rajasthan and Chhattisgarh, we are selling more Duraguard Microfiber than ever before actually. Duraguard Microfiber and all are trending at close to about 17%, 18% numbers and Concreto is much higher. In fact, in Bihar, our Concreto volumes are close to 75%, 80%. That’s the kind of volumes we are able to push. Hence, net-net, in states where we have a strong position on premium category, we end up getting more realization and better EBITDA margins.
Kunal Shah
Understood. And one last bit here. You like mentioned twice on this market being tepid and that gives some bit of cushioning. But in your experience, does the — I don’t know how to put it, but does the market share loss sort of aggravate during inflationary times your cement pricing?
Jayakumar Krishnaswamy
I’m not going to quantify what’s the kind of share loss which is happening.
Kunal Shah
No, not from a quantification. From a spend perspective is something that I wanted to.
Jayakumar Krishnaswamy
Yeah. I would certainly admit that in these times, there is a option available for us to kind of go, hammer in terms and pushing volumes in market, but thereby not give up our space in the shell. But given the fact that overall market growth itself is negative to neutral at this point of time and pricing power for the industry is almost the lowest in the last five years in this quarter, we thought it’s sensible to kind of play the premium game rather than to push volumes.
Kunal Shah
Understood. And just one last bit. In terms of this October pricing because we are getting some sense that prices have actually declined in October in your Eastern micro market. So could you just help us with how the trend is in October versus the September exit?
Jayakumar Krishnaswamy
Little bit of a next quarter, so for me to kind of tell anything about this quarter is not appropriate in this call, but suffice to say there has been an upward movement as well as a downward movement. So it’s kind of [Indecipherable]. Literally there is no trend which is there, which is kind of giving any great confidence to the industry that it will go one way up.
Kunal Shah
Understood. This is extremely helpful, sir. Thanks a lot for detailed answers.
Madhumita Basu
Thank you, Kunal.
Operator
[Operator Instructions] We’ll take our next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Yeah. Thank you. A couple of questions, ma’am. First, a couple of data points. Lead distance for this quarter, trade share and road rail mix this quarter.
Jayakumar Krishnaswamy
Okay. Road rail mix for quarter two is 60% road share and 40% rail share. Second decibel some changes, but [Indecipherable]. Lead distance we are at 330 kilometers. We used to be 332 in Q1, 2 kilometers reduction in overall lead distance. In terms of trade mix, somewhat lower in Q2 and compared to Q1, we are at 71% trade mix as against 73% in Q1.
Shravan Shah
That’s something you have from the business. Okay. And is it fair to say, let’s say, when we say that our prices have declined just 2.7%. So the non-trade prices would have declined much higher in Q2 versus the trade prices?
Jayakumar Krishnaswamy
2.7% is the blend of trade and non-trade. And if you see my trade share is 71%, non-trade share is 29%. So you’ve got to find a way to mathematic algorithm to get obviously 70% of trade and 29% non-trade. Obviously, non-rate is a little bit more than trade, but then overall compensated 2.7%.
Shravan Shah
Okay. Okay. And then given that the — for 1H, we have seen a 4.8% kind of a volume decline. So just wanted to understand a sense for second half. Is it possible that we can still see the full year will be a negative on the volume front?
Jayakumar Krishnaswamy
Tough to say, but last year H2 was not very great for the industry as such actually. To that extent, I think the base number for at least Q3 and January and February was not that great for the industry last year. So I’m really looking at a 4% volume growth for the full year.
Maneesh Agrawal
So we would get growth from now on post Puja, post Chhath Puja and Dashhera. So come November — till November 15 till March, I guess there should be a home stretch for the industry and certainly for us as well.
Shravan Shah
Okay. So that means more than a kind of a 10% growth that we are looking at in the second half.
Jayakumar Krishnaswamy
Certainly, I’m targeting high single-digit growth only the coming October end and till 15 November, we’ll get a good sense of whether there’s a little bit of a shift in momentum in overall offtake. As Mita mentioned in her speech, post the budget, lot of schemes were announced by the government, but they have not kicked off on the ground as of now, but I’m optimistic that once the Puja is done and then money has to flow into the market and construction will pick up and then overall cement demand will also go up, plus the monsoon this year was little bit severe. So that’s something which has kind of adversely impacted. Some broad macro stuff, we look at the states of Bengal, Bihar, Chhattisgarh, overall capital spend is not gathered momentum, change of government has happened, but from now on things should improve. So overall demand uptake is — will also improve maybe down by 15 governments.
Shravan Shah
Got it. And then on the capex front, so in the 1H, we have done INR220 odd crore and we previously said INR300 crore to INR400 odd crore kind of a capex in the FY ’25 and for INR900 crore to INR1,000 crore in FY ’26. So that number holds?
Jayakumar Krishnaswamy
Absolutely holds good. We may even be shy of maybe INR420 odd crores in H2. So there are no new projects which are kicking off. The big projects are basically the geo in Haryana or the railway siding in Sonadih, railway siding in Jaipur and then the [Indecipherable] project that’s far. So all of them are completed or more or less at the end of it. I’m not picking up any new project now since the March and just waiting for this year to tide over so that we start our expansion capex end of this fiscal, early next fiscal.
Shravan Shah
And the net debt, the INR470 odd crore, obviously, it is a seasonality which has increased in the 1H. So by end of this year, do we expect that it will come back to normal kind of a INR4,000 crore odd level?
Jayakumar Krishnaswamy
Yeah. I just want to — it’s part of our presentation. If you see September ’21, we were INR571 crores, September ’22, INR5,283 crores, September ’23, IRN4,734 crores, September ’24, INR4,501 crores. Year-on-year, every quarter, we are better off than the previous — same quarter previous year. So end of March, certainly, we’ll test our this March number. So we should be — we’re on a good position to reduce the debt.
Shravan Shah
So only — then only we will be…
Operator
Request you to join back the queue please as we have other participants waiting.
Shravan Shah
Okay. Thank you.
Operator
Thank you. We’ll take our next question from the line of Aditya Desada [Phonetic] from Motilal Oswal. Please go ahead. MR. Aditya.
Aditya Desada
Hello.
Operator
Yeah, please go ahead with your question.
Aditya Desada
Yeah. Hi. So I just wanted to know what’s the current net debt position? And how much progress has been made towards achieving the targeted net debt reduction?
Jayakumar Krishnaswamy
You have to repeat your question, Aditya.
Operator
MR. Desada, can you use your handset mode, please?
Aditya Desada
Yeah, sure. Hello. Am I audible now?
Operator
Yes, please go ahead. Please repeat your question.
Aditya Desada
Yeah. So as I was mentioning, what is the company’s current net debt position and how much progress has been made towards achieving the targeted debt reduction?
Jayakumar Krishnaswamy
Can you repeat the second part of your question? You said something after the company’s net debt. What was the second part?
Aditya Desada
Like how much progress has been made towards achieving the targeted debt reduction?
Jayakumar Krishnaswamy
How much what? Just repeat one more time little bit slowly. I didn’t pick up the second part of your question, please.
Aditya Desada
Yeah, I’m sorry, I’m telling that — I’m asking how much progress has been made towards achieving the targeted debt reduction.
Jayakumar Krishnaswamy
Okay. Fine. I have tried to make something of your question. If I’m not giving the relevant answer, you can ask me a repeat. Current net debt for the company end of September is INR4,500 crores. And our stated objective is should bear the debt to INR3,500 crores to INR4,000 crores 2 times of our EBITDA numbers. And the view currently I have for our company is by end of this fiscal it should be lower than last year’s INR4,034 crores. So we should be there about there by end of this fiscal. And in the long-term, we are comfortable operating the company at INR3,500 crores to INR4,000 crores, 2 times expect EBITDA is what we were comfortable during the past.
Aditya Desada
Okay. One more thing, how did — how has the realization per ton changed over the last quarter?
Jayakumar Krishnaswamy
Yeah. Realization per ton, just give me a second. Yeah, the realization for the company in Q2 FY is INR5,264 as against a Q1 realization of INR5,120.
Aditya Desada
Understood, sir. Okay. Can you just let me know what…
Jayakumar Krishnaswamy
I made mistake, I looked at the wrong here. Our Q2 realization is INR4,843 as against INR5,026, good INR180 lower than Q1.
Aditya Desada
Okay. So can you let me know what are the factors basically that contributed to these changes.
Jayakumar Krishnaswamy
Price, price, price.
Aditya Desada
Okay, it was predominantly…
Jayakumar Krishnaswamy
Price. In terms of cost side, we are equal to or better than many competitors on line by line of the cost side. Our fuel cost currently is trending at INR1,046, which is one of the lowest in the industry. We reduced fuel costs by INR13 from Q1. Our distribution cost came down by close to about 1% over Q1 in terms of other expenditures. Cost of materials consumed, we have come down by 2%. So the cost side are well under control as Mita spoke in — mentioned in her speech. Bridge agenda is certainly benefiting us. So I’m really looking for a price movement in the market in the positive direction, we’ll get the leverage going, going forward.
Aditya Desada
Okay. Going forward…
Operator
Aditya, may I request you to join back the queue, please as we have other participants waiting for their turn.
Aditya Desada
Sure.
Operator
Thank you. We’ll take our next question from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Rajesh Ravi
Hello. Am I audible?
Operator
Yes, can you use your handset mode, please?
Rajesh Ravi
Okay. Is it better now?
Operator
Yes, please go ahead.
Rajesh Ravi
Sir, just wanted to check the small clinker expansion. What is the progress on that?
Jayakumar Krishnaswamy
Yeah. Thanks, Rajesh. We did clicker expansion in two sites. One was in Risda. That’s done and dusted and we have the capability to take the clinker to 11,500 tons and in Nimbol, which is in North, we have taken the clinker expansion to 6,000 CPD. Happy to report that we have already touched 5,700 tons per day throughput. So we’re still under shutdown right now. Once the shutdown is done by I think January, February, Q4 this year, our target is to get to 6,000. Overall clinker capacity for the company would be 28,000 tons clinker in East per day and North 4,000, 9.5 million tons in East and 4 million tons in North.
Rajesh Ravi
I was talking about the slag clinker brownfield expansion, which we were planning to take up by FY ’26.
Jayakumar Krishnaswamy
Oh, okay. Talking about the brownfield expansion, okay. As informed to — in the previous call, we’re looking at an expansion for the company happening end of this fiscal or early part of next fiscal. So the technical work is all happening currently and then sometime end of this year, early next year, we should start our clinker expansion.
Rajesh Ravi
And how much time it may take for commissioning that project when you start?
Jayakumar Krishnaswamy
Rajesh, I’m sorry, I just missed the last sentence please. Can you repeat?
Rajesh Ravi
How much time it may take for commissioning once you start the project?
Jayakumar Krishnaswamy
I’m looking at close to about 18 months for the line to be commissioned.
Rajesh Ravi
Okay. Okay, sir. That’s all from my end. Thank you.
Operator
Thank you. We’ll take a follow-up question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi. Ma’am, you have mentioned that we have seen a INR50 cost reduction through the Project Bridge in 2Q. So this is a Q-o-Q we are talking about and how much more further reduction we are looking at in the second half?
Madhumita Basu
So Shravan, Bridge 2 agenda just to recall the major heads, we were looking at the grid integration project covered in my speech, slag cost reduction, distribution cost reduction. So these projects are well on track against a budget of 50 per ton, which we had shared earlier. H1 we are already trending at 50. We hope to see some upside on this figure. In H2, we should be looking at about 75 per ton given the pace at which these various projects are moving.
Shravan Shah
Okay, got it. And then just to check this Chittor Karda expansion. So previously we have mentioned 2 to 2.5 MTPA clinker. And in terms of the grinding level, broadly it would be a 3.5 million, 4 million ton that one can look at. And broadly in terms of the capex, it would be a INR1,500 crore, INR2,000 crore kind of a capex?
Madhumita Basu
Yes, Shravan. No specific update over what we shared in the last call.
Shravan Shah
Okay. Okay. Got it. Thank you.
Jayakumar Krishnaswamy
Thank you.
Operator
[Operator Instructions] I would now like to hand the conference over to Ms. Madhumita Basu for closing comments. Over to you.
Madhumita Basu
Thank you, Yashasvi. In conclusion, I would like to share we are cautious about the demand outlook and pricing dynamics in the cement industry. While the Union Budget has announced an infrastructure investment of INR11plus lakh crores, actual disbursement of funds and project execution on the ground remains a key monitorable. Despite these challenges, our strategic priorities will continue to focus on premiumization, geo mix optimization, enhancing fuel mix efficiency, strengthening our brands and maintaining focus on cost excellence. Our Investor Relations team will remain available for any further clarification required. I take this opportunity to wish you for a Happy Diwali and a prosperous New Year. Thank you for being with us today.
Operator
[Operator Closing Remarks]