Sagar Cements Limited (NSE: SAGCEM) Q1 2026 Earnings Call dated Jul. 22, 2025
Corporate Participants:
Unidentified Speaker
S. Sreekanth Reddy — Joint Managing Director – Promoter Group
Analysts:
Unidentified Participant
Gavin Desa — Analyst
Presentation:
Gavin Desa — Analyst
Should I start?
operator
Yeah, I’m starting. Good morning ladies and gentlemen. Welcome you all to the 1QFY26 results. Conference call of Sagar Cements Limited. We have with us today Mr. Srikanth Reddy, Joint Managing Director, Mr. K. Prasad, Chief Financial Officer Mr. Rajesh Singh, Chief Marketing Officer and Mr. Raja Reddy, the company.
I would like to hand over the call to Gavin Lisa for his opening comments and then over to manage. Over to you Kevin.
Gavin Desa — Analyst
Thank you Manish. Welcome everybody to this call. We will begin this call with opening remarks from the management following which we will have an interactive Q and A session. Before we begin I would like to point out that some statements made in today’s discussions may be forward looking in nature. And a note to that effect was stated in the Concol invite sent to you earlier. We trust you have had a Charles to go through the result communications and documents.
I would now like to hand over to Mr. Srikanth Reddy for his opening remarks. Over to you Srikanth.
S. Sreekanth Reddy — Joint Managing Director – Promoter Group
Thank you Gavin. Good morning everyone and welcome to Saga Cement’s earnings call for the quarter ended June 30th, 2025. Yeah. Let me begin the discussions with a brief overview of the market in terms of the demand and pricing post which I will move on to Sagar Specific developments. Overall, the industry witnessed healthy volume growth supported by a pickup in infrastructure activities driven by the government spending and improving demand from the individual house builders. Additionally, the low base in the corresponding quarter last year due to the Lok Sabha elections and some of the state elections also contributed to year on year volume uptick.
On the cost front, key input prices, particularly power and fuel remained largely stable. Given the robust volume growth, steady pricing environment and benign input costs the industry experienced an improvement in profitability and margins during the quarter. Let me now move on to our quarterly performance. As indicated in our previous call, Q1 registered a good volume growth of around 11% over the previous year. As demand momentum remained firm during the quarter for FY26 we expect our overall volumes to be in the range of around 6 million tons. Moving to the headline numbers, our revenue for the quarter stood at rupees 671 crores as against rupees 561 crores during Q1FY25 higher by almost 20%.
EBITDA for the quarter stood at rupees 121 crore as against rupees 47 crore generated during Q1FY25. Margins for the quarter stood at around 18% as against 8% in the corresponding quarter last year. Ebitda per tons today at Rupees 851 during the quarter. Going forward, as the capacity utilization improves across our units, the business is expected to benefit from operating leverage. We remain optimistic that our ongoing initiatives such as optimizing the freight to reduced lead distances, lowering the clinker factor, upgrading Andhra plant and increasing the share of renewable energy in our power mix will further enhance our cost efficiencies and support our overall profitability.
Profit after tax for the quarter stood at Rupees seven crore. In terms of the key operational activities, modernization at Andhra Cements Dutch Pilli unit is progressing as per schedule. Power and fuel cost stood at rupees 1450 per ton as against rupees 14. 70 per ton reported during Q1FY25. Freight cost for the quarters today at rupees 860 per ton as against rupees 844 per ton during Q1FY25. From an operational point of view, Matampelli plant operated at 54% utilization while Gudupadu Bhaiavaram, Jirabad, Jajpur and Dajpalli plants operated at 77, 66, 94, 48 and 32% respectively during the quarter.
As far as the key balance sheet items are concerned, the gross debt as on 30th June 2025 stood at rupees 1556 crores out of which rupees 1179 crores as a long term debt and the remaining constitutes the working capital. The net worth of the company on a consolidated basis as on 30th June 2025 stood at rupees 1802 crores. Debt Equity Ratio stands at 0.651. Cash and Bank Balances were at rupees 182 crores as on 30th June 2025. The Board of one of the subsidiaries Sagar Cements M Private Limited has given approval to take up the expansion of the cement grinding capacity from 1.
1 million to 1.5 million and as part of green energy initiatives to establish a 6 megawatt solar power plant involving a CAPEX of around 140 crores. To summarize, our expanded capacities strategically position us to capitalize on the anticipated growth in infrastructure and real estate development in the years ahead. Moreover, our ongoing initiatives to broaden revenue streams and strengthen our regional presence are expected to enhance companies overall profitability. That concludes my opening remarks.
You would now be glad to take any questions that you may have. Thank you.
Questions and Answers:
operator
Thank you Sir. So we will now begin the question and answer session. Anybody who has a question may indicate by raise of hands. We will take the first question from Mr. Shravan Shah. Shravan, please go ahead with the question.
Unidentified Participant
Hi sir, can you hear me?
S. Sreekanth Reddy
Yeah. Good morning Mr. Shaban. Yes sir.
Unidentified Participant
Hi sir. First of all congratulations on decent setup numbers supported by the pricing. So first just on. On the clarifying on the volume front. Uh. So on the presentation we are maintain kind of a 6 million ton for this year. So does this also. Does this also. Hello sir.
S. Sreekanth Reddy
Yeah Mr. Shan. Go ahead sir please.
Unidentified Participant
Yeah. So does this also. Does this also include the clinker cell that we are looking at? And also trying to understand how much more clinker that we are looking at. And once this Dutch plant starts how. How do we. Are we still going to sell. Keep on selling the clinker?
S. Sreekanth Reddy
Yep. Mr. Shivan, I. I think we. We do not sell clinker in any of the south units. The only location where we sell clinker is at indoor for the external. Andhra’s sale of clinker is primarily to bioavaram. It’s primarily to do the stock management because Matampelli plant line two was under maintenance. So during this time there was some amount of clinker flow that has happened from Andhra to Biovaram now going to the Jirabad units. Clinker sale as you know that we are. We are able to produce more clinker and the peak grinding capacity we have reached.
So the residual quantity of clinker is what we sell. And we believe that by end of this financial year. So end of Q1 of coming year. Yeah we. We. We should. We should not have any clinker even at Jabad because everything we would be converting into cement. Mr. Stan. Yeah. Outlook for the current year. So we. We are taking two views. So one for a better price regime. We. We are very clear that we would want to regulate our volumes just in case. If the market prices tend to be lower then probably there could be higher volume.
But given the price position our view is that the demand. The. Given the demand and the new supply that is likely into the market our volume outlook remains close to 6 crores. But we would. 6 million. So we would. We would like to revise it not before middle of Q3. Mr. Shan. So till such time we. We believe that 6 million is doable and that’s what we would like to stick to. Mr.
Unidentified Participant
And for FY27 is it fair once will be starting by this. This September or December 7 million ton is is fair to assume that we can do in FY27.
S. Sreekanth Reddy
I think for the coming year we we believe that this is only start of a good so next year we expect demand to be much better than what it has been what is anticipated for the current year. So given that scenario I think 7 million is definitely a doable number for the coming year. Mr. Shah
Unidentified Participant
okay. And now sir on the pricing front so just to if you can state wise if you can help us in terms of what was the price increase which has happened in Q1 and currently are the prices same or still till now have you seen maybe a five order rupees further hike or a decline and do we believe that this this pricing to to kind of sustain or given the kind of a supply will be coming in the third and the fourth quarter do we see that these prices may may may whatever the discipline the industry has shown maybe some some correction is is is can can happen.
S. Sreekanth Reddy
Yeah. Mr. I think as as you are aware sir from March exit to June end we we did get around 50 to 55 rupees increase per bag. Tamil Nadu is around 35 to 40. Maharashtra is around 20. Odisha we we received though there was slightly higher number but from an exit perspective we are close to around 10 to 15 rupees. Madhya Pradesh Market more or less remained flat for us. So so now from from June exit to July of course we are only 20 days into the current peak season more or less it is flat to slightly negative bias but that drop is expected because of the seasonal correction.
Fortunately it is not very significant. What I would like to put seven. Now the next part of your question is are these prices sustainable? Yeah we wish they are but our internal view is that we have taken an overall kind of a price to be flat to slightly negative by 5 rupees from its peak in June and we wish we are wrong but but given the demand in some pockets of the markets that we service especially Napi and fortunately even Telangana government have have been engaging with most of the industry players. So given that scenario we believe that we could be better off in terms of the prices but it’s too soon.
I think I would I would like to take this call probably middle of Q3. Till such time even with this kind of a price regime we should not complain because as you know monsoon is being is very very active. Mr. Shah, but our internal penciling in is that we we did take a 5 rupee drop on an overall kind of from the current scenario just to factor in kind of market Fluctuations that are likely to happen.
Unidentified Participant
Got it. And lastly sir, on the profitability. So obviously this quarter was much better. So now how how do are we we seeing given the as you are saying if even if let’s assume the prices remains flat where it is. How do we see in terms of profitability? Uh. Is it fair to say uh. 350, 400 crore kind of a bit up or this year is this possible or maybe beta per turn going forward in Q2 onwards more than 600 rupees is possible because this time
S. Sreekanth Reddy
what we. Have penciled in is around 600 rupees per ton as a minimum. Mr. Shaban. If the prices remain where they are and obviously there is some amount of operating leverage that is likely to kick in. So we believe around 600 rupees is a possibility. Mr. Shah.
Unidentified Participant
So that will be from Q2 onwards can be maintained. 600 plus.
S. Sreekanth Reddy
I, I, I, I, I think so. But year end average also we believe the minimum of 600 rupees that includes you know some amount of small dip during the Q2 and probably a catch up will happen somewhere around middle of Q3 to a very good Q4 is what we are expecting. Mr. Shaman. This is an average price is what we are talking.
Unidentified Participant
And now no more incentive till the end of this year whatever we were supposed to receive.
S. Sreekanth Reddy
Yeah. There is an additional 12 crore that is likely to happen. That that is the only pending incentive available for the current year.
Unidentified Participant
So this will be in Q2 or Q3 that likely to come?
S. Sreekanth Reddy
No, we wish it is as soon it is possible anytime sir.
Unidentified Participant
Okay. But going forward next year onwards 23 odd crore that’s the number that one can look at.
S. Sreekanth Reddy
Yeah, that remains. And of course the capex that is happening incremental capex that is happening at Jirabad also is likely post commissioning. That thing also would be eligible for additionally.
Unidentified Participant
Okay, okay. Okay. I have more questions will come in queue. Thank you.
S. Sreekanth Reddy
Thank you.
operator
Thank you. We will take the next question from Mr. Nitin sir, please go ahead.
Unidentified Participant
Thank you for the opportunity. Am I audible?
operator
So you are audible.
S. Sreekanth Reddy
Yeah.
Unidentified Participant
Okay. Yeah. So my, my question is last time when we you know had a call we mentioned that about Isaac Land deal we can expect in Q1 results. So what is the status right now.
S. Sreekanth Reddy
At this point of time? The likely date which are Liza and team has indicated is around October sir. In fact the critical process has already been kicked in. So government again is seeking some internal clarity whether it entails cabinet approval or not. So that probably is going to add up. Few, few Months. So our team did indicate that by October. Yeah we. We should get clearance for. For the sale of land in Vizaks.
Unidentified Participant
So by end of this quarter or early next quarter
S. Sreekanth Reddy
I think somewhere around. October is what they have indicated. Mr. Ninthin.
Unidentified Participant
Okay. My next question is about what is our focus margin or volume for financial year 26?
S. Sreekanth Reddy
Sir, I think our focus has always been margin sir. Our operating rates are always fluctuating to match up with the margin. We definitely don’t chase the market shares. We have been very very focused on the margin and last few years when the pricing was very very difficult as you would have seen we did not chase the volume. We tried to conserve the money by not losing out the money because some of the places had extremely difficult pricing where we were losing money for every sale. So that that remains focused for us forever and that is the case even for this year and years to come.
Unidentified Participant
Perfect. And my next question is about the capex that we are you doing. So what is the incremental capex we’ll have? We indicated around 120. 130 crores for Clinker capacity. So
S. Sreekanth Reddy
for as for the current year. Mr. Nin it is 360crores sir. Out of that 2.260crores is for Andra around 80crores is for Jirabar and around 20crores is the maintenance capex across all the other units. So that’s our current year’s capex out of this. Yeah. What we have already incurred is around close to around 80 odd crores during current quarter. The rest is spread over next three quarters. As you are aware the Andra’s new Prehita project most likely we should. We should commission before Dashra as we speak we are running ahead of time but but for the range we are very confident that by end of September to middle of October we should have commissioned the new creator.
Of course the grinding capacity at Andhra which is again ongoing project which is likely to take end of the current financial year to Q1 of next year. But. But the whole idea here is to more upgrade. So given that our priority has always been to reduce the cost so that more or less is happening at slightly ahead of time. Mr. Nitin, we did place order for the grinding mill so we. We are just awaiting for the. We did get the easy clearance for the Jirabad unit for upgrading the plant from million to million and half.
We are expecting what we call as the city consent to establish that is likely to happen in a month’s time and immediately after the monsoon. We Would start the civil works and start the work on that side so even that, that, that the expansion. Yeah we should complete either end of Q4 to middle of Q1 is what is our estimation?
Unidentified Participant
I got it. And will this you know capex be through internal accruals or will be going for additional.
S. Sreekanth Reddy
It’s. It’s a mix and match of internal accruals plus some equity and also the debt as indicated earlier sir, whatever is the principal principal that we have been paying out. Yeah that would be. That would be again borrowed back but the gross debt, the net debt position may not be significantly different how it has been for the last year.
Unidentified Participant
I understand. So equity or dilution will also happen. That is what you are oh S.
S. Sreekanth Reddy
Equity because of the rights issue at Andra Cements.
Unidentified Participant
Got it? Yeah, got it. Okay, thank you so much and wishing you best sir.
S. Sreekanth Reddy
Thank you sir.
operator
Thank you. We will take the next question from Mr. Vishal Udwala. Vishal, you can go ahead okay.
Unidentified Participant
Good morning sir. Am I audible to you?
S. Sreekanth Reddy
Yes sir, you are very much audible sir.
Unidentified Participant
So I have couple of questions first on a macro level so with the rollout of new rail corridor under PM Gati Shakti and coal India shifting dispatch mix how are you hedging against both rising rate tariff and input supply volatility? Are you in talk for dedicated racks or surf line to lock lower logistic cost versus peers.
S. Sreekanth Reddy
Yeah Mr. Vishal I think you should be aware that we have the one of the lowest logistic cost in the sector secondly, we do not have any coal linkage with coal India sir the only linkage that we have is with Singer any and that definitely comes by rake even now and we also get lot of imported coal yeah it is. It is with both by rail and as well as by road we believe we are reasonably optimized on our Inward Freight Logistics Mr. Vishal so Gati Shakti so far from a relevance perspective to us is very very limited so we are very much dependent on the current options that we have.
Unidentified Participant
Okay, got your point and second one was like your gross debt rose 9% yoy and planned principal remnant of around 200 crore by quarter one FY27 so how are you gonna fund your upcoming capex and ramp up in your sadhguru and judge poor plants Will it be via internal accrual or something other sources?
S. Sreekanth Reddy
I think As I mentioned Mr. Vishal it is with the most of the tenures are fairly long term for the debt so it’s a mix of both debt equity that is because of the rights Issue as well as internal. Mr. Vishal.
Unidentified Participant
Okay. Any guidance for the right issue which you have spoken about.
S. Sreekanth Reddy
So we. We. We do have clearance from Sebi and the approval is all the way up to December. So we the team is working towards somewhere around Dashra time for us to hit the rights this thing. But these are all subject to market conditions. Mr. Vishal.
Unidentified Participant
Okay. Got your one last question. Like your Sadhguru and Judgepur grinding units use the latest vertical roller mill.
S. Sreekanth Reddy
Right.
Unidentified Participant
What per turn energy and maintenance saving you have actually achieved versus your legacy.
S. Sreekanth Reddy
Mr. Vishal, I would. I would encourage you to look at our integrated report. I think it’s very exhaustive. So. So it’s self explanatory. Present each unit each product. It’s product wise, very very different. Sir, I would definitely encourage you to look at our latest integrated report which gives all the details or you could. You could reach out to any of our team for any specific queries you might have.
Unidentified Participant
Okay. Okay. Got about. Thank you.
S. Sreekanth Reddy
Thank you.
operator
Thank you. We will take the next question from Mr. Badri Vishal Bajaj. So you can go ahead with your question.
Unidentified Participant
Morning. Giving opportunity. Sir, I have got your future projections in detail with annual report. Also my earlier shareholders our analysts have asked you have given in detail my. A simple question is F Q4FY25. Q4FY25. We made a loss of almost 73 crores. And suddenly this quarter U1FY26 we made a profit of 7.5 crore. Now the question is your revenue generation for Both the quarter Q4FY25 and Q1FY26 remains almost same marginal difference. But what made the the company to give the fantastic margins though I see in the Last year loss of 73 crores there is. There was about 27 crores on the power front which was earlier to be debited. So please throw some light on this.
S. Sreekanth Reddy
And Shaji, I think. I think it’s all to do with the relation. Yeah. I think it’s a very straight equation that when the relation moves up profitability moves upside. So there is. It’s no rocket Science. From Q4 to now for 50% of our market per bag price moved up by almost close to 45 to 50 rupees. A bag visage.
Unidentified Participant
Yeah. No, no, no. So the. The revenue should go up. No sir.
S. Sreekanth Reddy
Sir, the volumes did not go up. Sir, volumes actually dropped by 15%. Mr. Vishal.
Unidentified Participant
Yeah. Correct. Correct. Yeah. Thank you. Thank you sir. Srikant Sir. Good luck sir.
S. Sreekanth Reddy
Thank you sir.
operator
Thank you. Thank you. We Will take the next question from Mr. Sanjay Nandi. Sanjay, you can unmute your line and go ahead with the question.
Unidentified Participant
Yeah. Good morning, sir. Thank you for the opportunity. Hello.
S. Sreekanth Reddy
Yeah, good morning, Mr. Sanjay. Yeah, please.
Unidentified Participant
Yeah. Yes. Yeah. So we have seen that certain spike has happened in the power and fuel cost in the current quarter compared to the exit of last quarter like March 24th. So what has been the reason for that? Sir,
S. Sreekanth Reddy
I think it is more to do with the production itself. Sir, I think there is lot more clinker that was produced during the the current quarter compared to the previous one. Because we are stocking up for a potential shutdown of Andhra which we are in shutdown.
So we produce more clinker. So obviously it gets factored in. In that particular thing. Or else the movement in terms of the specific cost has not been significant. I would put it, Mr. Sanjay. It’s more to do with the inventory management. So we ended up producing more clinker because usually the. For the monsoon time we. We. We do the maintenance. During that time the clinker gets shed. So for that there is a huge kind of clinker built up that has happened. If you. If. If you look at this slide what we have presented on 8 of our investor presentation. Sir, more or less, it remains very flat.
Unidentified Participant
Got it. And sir, what has been our procurement price of Petco like in this quarter?
S. Sreekanth Reddy
Yeah, we. We. We are almost close to UN. Excuse me, sir, around $110 is an average procurement cost of us. But this includes the blended. Sir, one is the imported as well as the local
Unidentified Participant
domestic.
S. Sreekanth Reddy
Yes, sir.
Unidentified Participant
Got it. Got it. Got it. So that’s some of my slides, sir. Thank you so much. Wish you all the very best.
S. Sreekanth Reddy
Thank you, sir. Yeah.
operator
Thank you. We will take the next question from Mr. Rajesh Ravi. As if you can go ahead with the question.
Unidentified Participant
I said good afternoon. Good morning. Am I audible?
S. Sreekanth Reddy
Yeah. Good morning, Mr. Rajesh. Yes, definitely you are on.
Unidentified Participant
Yeah. Sir, I have a few questions. First on the minority interest for this quarter there is a significant rise around 6.3 crore. You know, out of 7.6 crore. What explains this large minority interest?
S. Sreekanth Reddy
Yeah, I think it is more. Yeah. It’s Sagar. The Jabad plant operations. Mr. Rajesh, so as you are aware Sagar only owns 65% of that company. So 35% held by the local partners. So. So that’s the entry.
Unidentified Participant
No. Why? I’m saying because if I look at SAG this Jirabad profit which is reported is 26 cr. Okay. Which is a profit of 26 crores. Even if I take 35% out of that it should be much lower. And Andhra cements is obviously 95% own. And there also it was a loss. Yeah, yeah. No but that’s a loss only so you know the minority should be rather be lower over there. So out of this 26 crore how come.
S. Sreekanth Reddy
I think. I think. I think specific calculation should be shared Mr. Rajesh. It is
Unidentified Participant
okay. Okay. This is one and second is about this lead distance. Sorry. This freight cost sequentially going up. What is the view?
S. Sreekanth Reddy
Sir, it’s all to do with the volume movement from. From Andhra. There has been a slightly higher volume movement so that did contributes to certain extent higher freight on a relative scale sir.
Unidentified Participant
So what should be the normalized freight cost One should factor in.
S. Sreekanth Reddy
We are there sir. I think the current quarter numbers should be there. The. The only thing that we have to be mindful is the fuel cost that is likely either up or down should get adjusted automatically or as we are there at the optimal kind of a freight cost.
Unidentified Participant
Because of last year you were incurring close to 800 rupees. Now this is close to 870 rupees.
S. Sreekanth Reddy
We are talking of an increased volume.
Unidentified Participant
Okay.
S. Sreekanth Reddy
Yeah
Unidentified Participant
understood. And capex for this year you mentioned is around 360 cr total right?
S. Sreekanth Reddy
Yes sir.
Unidentified Participant
And for next year what is the number one should work with total console basis?
S. Sreekanth Reddy
The the overall number for the next year is close to around 150 crores. Mr. Rajesh. So the residual portion of Andra again the residual portion of Zirabad then the maintenance capex that kicks in. So our indication is around 60 to 65 crores would be left for the coming year. For Andhra around another 60.65crores would be left at Jirabad. And the rest is the maintenance capex of around 20 to 30 crores across all the other units.
Unidentified Participant
Okay. Okay. And in terms of the land monetization what should one factor in in terms of you know what are the potential monetization which can happen this year and next year?
S. Sreekanth Reddy
Yeah we. We did indicate around 350 crores as the net receipts. Yeah we. We expect around 100 to 150 crores for the current financial year that is subject to be getting the approval by October and the rest to rest to happen over significant portion in the next year. And a small portion probably should overlap into a year later. We are only trying to be cautious on that count. Yeah we are yet to engage with the careers and at the same time we believe that’s a large land parcel for a place like Vizag. So we are not expecting a wholesale kind of a sale to happen on the land.
So which probably needs to be made into a small fractions. Not like a development fraction but something which is handleable. So given that scenario we did spread out the sale plan into close to two and a half years.
Unidentified Participant
Understood? Understood. And most of the the critical approval which you are awaiting. Why when do you expect that should come through?
S. Sreekanth Reddy
Yes sir, I. We. We did cross major kind of approvals since. Since there are some regulatory changes that have happened since the land has been given which is close to 50 years now. So given that scenario even government is contemplating on how. How to what are all the applicable kind of things we need to take into consideration. So the general debate is do we need the cabinet approval or not? Is what I primarily they are trying to debate. And this is that we. We expect the approval process to come over but critical aspects are all covered.
Unidentified Participant
Understood. That’s all from my answer. I’ll come back in queue. Thank you.
S. Sreekanth Reddy
Thank you. Thank you.
operator
Thank you. We will take the follow up question from Mr. Shravan Shah. You can go ahead with the question.
Unidentified Participant
Hi sir. Just to sir, get a clarity. You said that Jirabad will. Will start in the 4Q FY26 to a mid of 1QFY27.
S. Sreekanth Reddy
Yes sir, you are right.
Unidentified Participant
And 0.25 million ton will start by.
S. Sreekanth Reddy
No. We are yet to take a call on that. Sir. At this point of time given given the cash flow issues that’s one area which we, we. We are yet to take a call and we would be happy to come back to you as and when the decision is made.
Unidentified Participant
Okay. But. But this Dutch. We will be starting by this
S. Sreekanth Reddy
Q4. We should complete the end of Q4 to middle of Q1. We should have completed the grinding plant even at Andra station.
Unidentified Participant
Okay. Okay. It will be in the Q4 or 1Q. It will start the grinding. So. But the clinker will start by September, October.
S. Sreekanth Reddy
Yes sir. Yes sir.
Unidentified Participant
Okay. So then we can see a clinker cell there also for maybe one or two.
S. Sreekanth Reddy
We don’t sell clinker in south region at all sir. I don’t think there is a big market. I, I just want to clarify. I, I don’t think we will be selling anything outside the group requirement. I, I We don’t see a big opportunity even in that space in this region. Mr. Chair. It should be very opportunistic. Yeah, but we have not penciled any clicker sale At Andra, the primary reason is more mostly to do with the cost management. Mr. Sh.
Unidentified Participant
Okay, okay. Okay. So even if the. The clinker expansion will be there maybe
S. Sreekanth Reddy
get close to. Close to 25 to 30% at clinker level even now. Mr. Shan. So we can produce more clinker at Andhra. But. But the market doesn’t give you that opportunity at this point of time. And we don’t pursue selling tinker in this region unless it is really opportunistic. And really a good price is offered. Unless good price is offered, I don’t think we are pursuing that option.
Unidentified Participant
Okay. And regarding.
operator
Sorry to interrupt yourself sir. Can you please rejoin the queue so that we can have.
Unidentified Participant
Yeah.
operator
From all the participants. Thank you. So we have next question from Mr. Hiten Bodicha. Please can you unmute your line and go ahead with the question?
Unidentified Participant
Hello. Am I audible?
S. Sreekanth Reddy
Yes sir. Good morning.
Unidentified Participant
Yeah, good morning sir. So my question is on the EBITDA per turn. I think you gave a conservative guidance of 600 rupees per ton, right?
S. Sreekanth Reddy
For the full year. Yes sir.
Unidentified Participant
Yeah. So my question is on that we did around 850 rupees per turn in Q1 which is like one of the weakest quarter in the cement industry. And considering the prices are also going to sustain in the second half. So why so conservative?
S. Sreekanth Reddy
Yeah, Q1 is one of the good quarters, sir. Q1 and Q4 typically contribute 60% of the margins. And the top line, bottom line. Q1 obviously also was like, you know, the best of the pricing only started midway through April. Okay. And secondly there is an incentive receipt of almost close to 34.34crores that we have received during Q1. Okay. But what we are, we wish that the price remains the way it is and the demand also goes much higher. We. We have. We have penciled in what we believe is likely to happen. We wish it is much more.
Yeah. Some people may call it very conservative. Yeah. We. We are trying to be far more realistic in our estimation numbers. Mr. Ethan, I would. I would like to leave the thought that thought with you. Beyond that I cannot comment much on whether that number is optimistic or pessimistic state.
Unidentified Participant
Understood. Understood. Sir. My question is on the incentives. We. You mentioned 24 crore in Q1. So what is the total incentives we are expecting this year?
S. Sreekanth Reddy
I think 46 crores. Out of 46 crores we. We did receive 34 sir. Under 12 crores is new which we are expecting in. In current or maybe by middle of next quarter.
Unidentified Participant
So more 12 crores. In remaining 3 quarters. Right.
S. Sreekanth Reddy
12 crores, sir. Another 12 crores is likely to hit in the other 3 quarters.
Unidentified Participant
Understood. Understood. Yeah. That’s all. Thank you.
S. Sreekanth Reddy
Thank you.
operator
Thank you. We will take the next question from Mr. Bhavin. Can please unmute your line and go ahead with your question?
Unidentified Participant
Yeah. Hi Srikanth. Congrats on overall good set of numbers. A couple of questions. One is what was your state wise mix of the volumes during the quarter you used to give that early? I think I don’t see this, this in the press release.
S. Sreekanth Reddy
Usually we disclose it at an annual basis, Mr. Bhavin but, but the nix has not been significantly different from what you would see in our integrated report. Yeah, we, we do disclose statewise numbers on an annualized basis because from a quarter to quarter perspective. Yeah it, it varies purely because the seasonalities are not same. If you look at Tamil Nadu monsoon is slightly different from some of the southern states and Orissa also some amount of shift. But from a percentage perspective for the current quarter, sir, it’s not very, it’s. It’s not very, very different. It’s very, very similar, sir.
Around 50 odd percentage for AP. Telangana, Karnataka is close to around 7. Tamil Nadu is also close to 7%. Madhya Pradesh is. Maharashtra is close to 7%. Orissa is close to 15%. Madhya Pradesh is close to 10. Gujarat is close to around 3 and a half percent and the others is around 2 and a half percent. Mr. Bin which is very similar to how we would have done it on an annualized kind of a thing which we did like how we did last year.
Unidentified Participant
Second question Shikhat. More on the industry perspective and basically the wave of consolidation which we have seen and more towards south India. What has happened? The Birlas acquiring India Cement and Keshava and Ambuja acquiring Penna and Orient. So what according to you or in last three to six months what marketing strategy have you seen a change in terms of state wise volumes getting impacted from this new acquisition targets because they have been ramped up and how, how do you see it forward? Because clearly it looks like pricing has become. It looks from this quarter result that there has been a good, good pricing. So I think the competitive intensity has gone down it looks like. So what are your views on that?
S. Sreekanth Reddy
No, Mr. Bhavin, I think from a consolidation side sir, I think we for south it’s still more an acquisition story rather than a conservation story. So far the, the market share shift is not as significant as most of the people believe or think because south is still Very, very fragmented. So most of the acquisitions that happen if you have to look notably between Adanis and Altatex, some of the states that get influenced are limited to an extent that it is to Karnataka, Maharashtra and Telangana. The bulk of the Andhra market there has not been any shift sir, because Orient is primarily a very large player in Telangana and more so in Hyderabad and some northern parts of Telangana.
Same is the case with Keso Ramsar India Cements obviously has lot of assets in AP and Telangana, but primarily they are a big player in Tamil nad. So given that scenario, the overall market shift in terms of shares and all, what is to be expected out of so far the acquisitions that have happened is not very, very influential or significant. The ramp up obviously is primarily on account of some of the assets that these people have acquired were underused. So they got to what we believe a normalized kind of a scenario that obviously would not put too much of volume pressure onto the significant portion of the markets that we service.
Mr. Bhavin and primarily into south also. So the general tendency is that once the ramp up has to happen, price should suffer. But that’s not the case in this part of the world. I think most part of last 18 months to two years. Somehow the existing players to the new players panicked at the market and tried to focus mostly on the market share. Historically market shares never helped any of the people leave it on the margins. I think even the current perceived good pricing, this is relative term because our operating margins are still in the range of around 15 to 20%.
I think these are the normal EBITDA margins. But but with with acquisitions happening at a price, again it’s a relative term whether it happened at a good price or a bad price. But these prices don’t justify even the current prices. So given that scenario are again it’s our belief is that people would not be in a hurry to ramp up. People would be lot more cautious to put whatever is the volume that is coming up. And it’s also true that some of the players are new, especially on the brand side. So it makes sense for them not to be in a hurry to take at a lower price.
Because if you position your product at a lower price, it would take a lot of effort and energies to take it to a level which is viable margins. So all these things have happened over last three months. Going forward we believe for most of the time I think similar situation should should prevail is what we think. Mr. Bharan,
Unidentified Participant
in the last question, what is your south demand outlook for remaining nine months of this fiscal will it grow between 9 to 11% the way.
S. Sreekanth Reddy
The you will be very surprised, Mr. Bhavin. In spite of early monsoon the entire south grew close to around 8 to 9% in the Q Q1. Obviously this growth is purely because last year was very very bad because last year the market more or less was flat across south. But if you see the net again we we are actually close to 5% above 24 number sir. So we believe that this year we would definitely cross FY24 number and we would in terms of percentage. And in FY23 the overall south market grew healthily at 20% so we expect next year to be even more healthier than the current year. So the average outlook for the current year demand is to grow close to around 9% to 8 to 9%. Mr. Bhar,
Unidentified Participant
thank you. Thank you.
operator
Thank you. We will request all participants to limit the questions to two purpose per person so that management can address the question from all participants we have next question from Mr. You can unmute your line and go ahead with the question.
Unidentified Participant
My question is already answered. Thanks.
operator
Okay. Thank you. So we have next question from Mr. Girija Ray. You can unmute your line and go ahead.
Unidentified Participant
Hi thanks for taking my question. So just wanted to check previous participate what the questions he was asking. Sir, do you see any kind of price discipline after this larger players are coming into the southern regions. And second question that you have mentioned we are not changing to the volume so so I’m having big concern so the moment all the larger players comes into ramping up their capacity. So this is again going to you know disturb somehow the southern market and we are expecting 8 to 9% of growth in southern market. So just help me out understanding about the price discipline and the the larger players how they are going to act for next one year.
S. Sreekanth Reddy
Yeah. Mr. I think you will appreciate from last year 5.4 odd million. We are talking of wrapping up to 6 million. So whatever is the market growth we have penciled exactly the same number for our own growth. From pricing discipline perspective. I I cannot comment for the entire industry nor for other players. Internally we always believe that there is no point in chasing volumes where there are no margins because most part of last two years I would predict the the the price is terrible. It was not contributing. So obviously there is no point in going and chasing the something which is not going to remain permanently with you and losing whatever little money that we were making was not a wise thing.
So that’s what we have done. We’ve Always been very similar, Mr. Giraraj, for our last one and a half to two decades that you, if you follow us, I think similarly is the trend. Yeah. Our operating rates are in proportion to the market. The south, as you know, the supply is almost 2x of demand. So given that scenario, you cannot expect any higher demand. Yeah. There are some times when there are players who are new to the market. There are some players who for some strange reason all of a sudden would want higher volumes to put in the market.
For reasons best known to them. They keep trying to test the market. Yeah, that’s when we believe the prices did suffer. Will they behave same, will they not? I cannot comment much on that, sir, but I think given some of the acquisitions that have happened in the market, the recent ones, they happened at a price which we believe cannot be justified unless pricing is healthy. So the current price regime that you are seeing is. Is only contributing to an extent of 15 to 18% EBITDA margin, sir. That still would not help some of the players to justify.
And these people are large players and you know, some of the brand movers and even the existing players, whether they have expanded, not expanded. And most of the, most of us did expand, sir, either organically or inactive. So everybody has certain kind of EBITDA margin requirement to ensure that balance sheet remains healthy. If you have to look at overall kind of a consideration, I think pricing discipline is the. Is the way forward. Yeah. Having said that, there are always few quarters, a few months where, you know, somebody new to the market wants to establish himself.
And sometimes, you know your seasons and sometimes some events would. Would demand under stress. So with all these things in the major loser would be the price. Of course it would be us. But the first things that would follow is the price would collapse. That’s exactly what has happened for last 18 months. And that is not new, sir. It fortunately or unfortunately has been very, very cyclical. So if you trace back every five years or 10 years, you. You reach to the same point in our industry, especially in south. So really that’s what has happened.
If we have to follow the past trend lines, we believe that the cyclist turn and we are up for a good couple more years from here on.
Unidentified Participant
Okay. Okay. Thank you very much, sir. Thank you very much. Thank you.
operator
Thank you. We will take the Next question from Mr. Tom. A cardinal. Tom, you can go ahead with the question.
Unidentified Participant
Yeah. Am I audible?
S. Sreekanth Reddy
Yeah. Good morning, Mr. Tom. Yes, sir.
Unidentified Participant
See, I have one question. I would like to know the power cost per unit with the bifurcation like thermal grid, solar, WHRS.
S. Sreekanth Reddy
Yeah. Mr. Tom, what I would appreciate is if you could reach out to any of our team you would be more than happy to give out. Because there are six units spread over three states or four states. I would put it so at each unit it’s very very different. But we would be more than happy to share those numbers.
Unidentified Participant
Okay, that’s all. Thank you.
S. Sreekanth Reddy
Thank you.
operator
Thank you. We will take the next question from Guru Darshan. Guru. Please go ahead.
S. Sreekanth Reddy
Am I audible? Yeah. Good morning Mr. Guru. Yes sir. You are very much on.
Unidentified Participant
Thank you sir. Congratulations on good set of numbers. Regarding incentive we have received around 34 crores. Is this number included in the EBITDA figure reported?
S. Sreekanth Reddy
I think this definitely includes sir because this is part of the income. So out of 12134 crores has come in form of incentive.
Unidentified Participant
Oh got it. So in terms of pricing we have taken around 5 to 10 rupees of price cut this quarter. Right. Q2 or exit of June.
S. Sreekanth Reddy
I think the price across various markets is very very different. It’s not that we have taken a price cut sir. The price dilution has been in the range of around five rupees is what we have indicated. It’s an average number, sir.
Unidentified Participant
Okay. And the capex we are doing for andra Simmons around 260 to 50 crores. It’s mainly related
S. Sreekanth Reddy
that is for the current year the overall capex for Andhra just for the benefit of most of our friends who have participated here it’s a 470 crore capex spend over three years time. Out of 470 crores last year we did spend 85. For the current year we would be spending around 260 odd crores. So the balance amount would be spent a year later. So this is primarily for upgrading the preheater. Because the pre eater there is more than one and a half decade old. So we are updating this with the primary intent to reduce the cost structure there.
But incidentally we are also getting an incremental kind of a volume. Again we are also optimizing this event will serve wherein From a current 2.25 million grinding capacity we will be reaching to 3 million ton. And Andhra from 1.85 million clinker we will be reaching to 2.0. Around 2.3 million ton clinical capacity.
Unidentified Participant
Okay, so got it. One last question. With respect to rights issue you’re looking to raise around 130,140 crores of. Right.
S. Sreekanth Reddy
We need to. We. Because of the minimum shareholding compliance. Yeah. We need to we need to reduce from current 90 of Saga Cements holding to 75 sir so I I think the price of the market will decide how much we will raise but our idea is to reduce from 19 to 75% holding the Mr.
Unidentified Participant
All right. Thank you so much sir and congratulations.
S. Sreekanth Reddy
Thank you.
operator
Thank you. We will take the next question from Vidisha. Vidhi you can unmute your line and go ahead with your question.
Unidentified Participant
Yeah hi this is Sudeep and many congratulations for a very good set of numbers. Just one on royalty side as as Tamil Nadu had imposed royalty on mining. Are we hearing similar kind of thing or any chat from other are like other south states anything.
S. Sreekanth Reddy
So so far so good for us sir. So far so good
Unidentified Participant
right.
S. Sreekanth Reddy
In the states that we operate nothing has been indicated so far and we wish it remains same so that that’s the comment I can make but I think some of the states which did industries of course are representing from from that perspective we have. We have not heard anything so far even consultations have not started in any of the states that we operate.
Unidentified Participant
That’s good sir that’s thank you so much sir and all the best.
S. Sreekanth Reddy
Thank you.
operator
Thank you. We will take the next question from Lakshmi Narayan. GK Lakshmi you can go ahead with the question.
Unidentified Participant
Hi sir congratulations good set of number Sir I you previously said that like government was engaging with various event players in Andhra. Could you just throw me some light on the infrastructure projects which are going to come which is going to push demand sir
S. Sreekanth Reddy
see I I mentioned it’s in Telangana selection government did indicate that there one of the five guarantees that Congress government when they were elected here is a low cost housing sir so and panchayatra some of the projects and irrigation these are the three departments together invited the industry and they wanted to supply cement so they they were negotiating for the price and at the same time industry again was obviously negotiating for price and the payment terms.
So we we hope to hear from the government soon. There were quite a few meetings that have that are happening and that have happened probably because government usually uses this time because this time government cannot do much work because of the season so before the end of this season they would want to negotiate and commit But I think we will be in a much better situation to know the quantum though government typically when they are trying to negotiate sir they indicate a huge number in reality you know it’s more a part of a negotiation but for us to arrive at what is likely to happen in terms of the demand probably it would take some more time when when you know, the final negotiations would have arrived.
We would be in a much better situation to indicate the numbers understood that they are discussing sir. And this is happening after quite some time. So, so that’s the good news.
Unidentified Participant
Okay, so one more question. Could you just throw a light on the limestone availability and the demand for your products also raw material availability, sir, limestone availability. And
S. Sreekanth Reddy
yeah, I would encourage you to look at our integrated report unit wise. We did disclose the availability of resources. That includes the validity of the limestone mine. If you are looking at the limestone because that’s a significant portion.
Obviously we do source fly ash. We do source some amount of other details. But, but, but we, we, we do have, we, we do have uh, those resources in, in the neighborhood. So we don’t see any problem. But I would also encourage you to look at slide 29 of our investor presentation. So where we did indicate unit wise the, the total reserves that are available at each of the unit wise selection.
Unidentified Participant
Thank you so much sir.
S. Sreekanth Reddy
Thank you so much.
operator
Thank you. Yeah, thank you. We will take the follow up question from Mr. Rajesh. Ravi. Rajesh, you can unmute your hand. Go ahead please.
Unidentified Participant
Yeah. It’s a two question, just one on depreciation. I see across two of your units in Andhra there is a Q and Q fall in depreciation.
S. Sreekanth Reddy
I think those specific data we would be more than happy to share because those are numbers which are driven more from a regulatory perspective. So I would, I would be more than happy to share any of those details unit wise. I think that if that helps, we would be more than happy to share depreciation numbers unit wise. Mr. Rajesh.
Unidentified Participant
So this would be the more recurring numbers which one should look at. Q numbers.
S. Sreekanth Reddy
I think we are very
Unidentified Participant
on the existing capacities
S. Sreekanth Reddy
but, but you should be mindful that we are going for an expansion. Those are. But for that I think the numbers more or less are aligned. So we have not adopted policy. We have not adopted any new policy. It’s more or less very, very similar. So though auditor has changed because from Deloitte we are new to BSR which is KPMG because of the 10 years completion but depreciation method and everything more or less remains same. There is no change in our depreciation method sir. But our team would be more than happy to furnish unit wise depreciation numbers and relevant calculations for
Unidentified Participant
sure. Sure sir. And one last question on the, you know slide 11 where you share the fuel cost trend. There you have shown that the current imported coal and domestic coal prices are Almost higher by 30 peso per kilo versus Q1 Are there both imported and domestic coal.
S. Sreekanth Reddy
That most of the transactions that have happened are on a similar trend. Sir, because in between because of the geopolitical issues there was a surge. But likely that everything is at least slowly coming back to normalcy is at least is the indication. But if you have to look at it we are talking of a quarter when there was a huge fight that was happening in the Middle East. So during that time some of the traders definitely would have put some pressure on the selling prices of the bullet. So we did indicate those mostly on the offers that we have received. Sir, it’s not at what price we bought.
Unidentified Participant
Understood? Understood. Understood sir. Great. That’s all from my end. Thank you.
S. Sreekanth Reddy
Thank you.
operator
Thank you. We will take the last question from Mr. Shravan Shah. Shravan, you can unmute your line and go ahead with.
Unidentified Participant
Hi sir, just to clarify you said that the five rupees prices have corrected from June exit to till now. That’s the what you wanted to say?
S. Sreekanth Reddy
Yes, you heard it correct. In our case it’s not even close to five set. That has been the general industry news so far. In our case the dilution is less than three rupees. But the overall industry from whatever market sources it is very market specific also. Mr. Shah.
Unidentified Participant
Got it. Got it. Second sir, in terms of the green share so which is at 15.45% for 1Q. So by end of this FY26 or for average how one can look at. And for FY27 where one can look at this to going up.
S. Sreekanth Reddy
Sir, I think for the current year we should be very similar. Sir, we Q1 by Q1 we should have implemented a wasted recovery at Gudipado. Because that’s an ongoing project that is happening there. So with that the green share is likely to move quite significantly only during the post this year. Sorry, it will be for the next year. We expect that to move close to around 20 to 23%.
Unidentified Participant
Okay. Okay, got it. And answer in terms of the date level whatever we have mentioned that we are looking at the net date of close to 450. 460 odd corrode 1400 50. 1460 odd for FR 2627
S. Sreekanth Reddy
number is. Close to around 1350. Mr. Shivan, I think that number we should maintain station.
Unidentified Participant
Okay. Okay. And then in terms of. Just to clarify for FY27 you said that 23 crore incentive and plus some for Jirabad once it will start. So what would be the number will it be.
S. Sreekanth Reddy
I would assume it is 23 for FY27 sir. The the other probably should have some time lag. But for sure this 23 course is expect to be expected for FY27.
Unidentified Participant
Okay. Great sir. Thank you. And all the best sir.
S. Sreekanth Reddy
Thank you Mr. Shah.
operator
Thank you. As there are no further questions we will request management to give the closing commentary.
S. Sreekanth Reddy
Yeah. We would like to once again thank. Thank all of you for joining us on the call. I hope you you have got all the answers you are looking for. Please feel free to connect with our team both at Sagar or cdr. Should you need any further information or queries that you have we’ll be more than happy to discuss them with you. Thank you. Have a good day sir. Thank you. Thank you.
operator
Thank you. And yes sir. Thank you. And we will now conclude the call. Thank you everyone. Have a good day.