Shree Cement Limited (NSE: SHREECEM) Q2 2025 Earnings Call dated Nov. 11, 2024
Corporate Participants:
Vaibhav Agarwal — Moderator
Neeraj Akhoury — Managing Director
Subhash Jajoo — Chief Finance Officer
Ashok Bhandari — Senior Advisor
Analysts:
Jyoti Gupta — Analyst
Amit Murarka — Analyst
Keshav Lahoti — Analyst
Ritesh Shah — Analyst
Rahul Gupta — Analyst
Satyadeep Jain — Analyst
Raashi Chopra — Analyst
Prateek Kumar — Analyst
Shravan Shah — Analyst
Lakshminarayanan K G — Analyst
Prateek Maheshwari — Analyst
Uttam Kumar Srimal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Earnings Conference Call for the Quarter and Half Year Ended 30th September 2024 of Sri Cement Limited, hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital India Private Limited. Thank you, and over to you.
Vaibhav Agarwal — Moderator
Yeah, thank you Yashasri, good evening everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q2 and H1 FY ’25 call of Shree Cement Limited. On the call we have with us Mr. Neeraj Akhoury, Managing Director; Mr. Ashok Bhandari, Senior Advisor and Mr. Subhash Jajoo, Chief Financial Officer at Shree Cement.
I would like to mention on behalf of Shree Cement Limited and its management that certain statements that may be made or discussed on this conference call may be forward-looking statements related to future developments, and these statements are based on current management 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. Shree Cement Limited and the management of the company assumes no obligation to publicly alter or update these forward-looking statements, whether as a result of new information or future events or otherwise. I will now hand over the floor to the management of Shree Cement for their opening remarks, which will be followed by interactive Q&A. Thank you, and over you Neeraj sir.
Neeraj Akhoury — Managing Director
Thank you. Thank you, Vaibhav, and good afternoon, ladies and gentlemen, and thank you for joining Shree Cement’s earning call for quarter two of FY ’25. While we are one of the lead companies announcing results, let me summarize our view in terms of both our view on the economic performance for the cement industry but also covering up the company performance as well.
So, in terms of the overall country economic outlook, as you all know, the Union Budget for FY ’25 was passed sometimes in August ’24 post the Lok Sabha elections. This led to a bit of a slower rollout of the government expenditure on capital infrastructure projects. Also, the country witnessed for this year a very prolonged and intense monsoon. While this augured quite well for the agricultural sector, I’m sure it had a calming impact on the cement industry. Consequently, there was some softening in the manufacturing momentum as well. Reports suggest that the manufacturing PMI hit an eight-month low in September, and the core sector output shrank by almost above 1.8% in August.
These conditions created a weaker demand scenario across sectors, including in building materials and cement. Housing sales and new launches fell during Q2. Overall urban demand moderated due to the softening of the consumer sentiments. However, the good news is that the RBI survey indicates improved business expectations for the upcoming quarter, rural demand is improving as reflected in increasing FMCG volume sales, and a rise in the three-wheeler and tractor sales. This has been supported by above normal monsoon, boosting rabi sowing, and an increase in minimum support prices as well, and the government initiatives like increased allocation to MNREGA scheme.
Overall, the outlook for the Indian economy continues to be positive, if not good, underpinned by a stable external sector, positive agricultural outlook, expected improvements in demand, supported by the festive season and the likelihood of an increase of government spending.
For us at Shree, it was a very challenging demand environment. We adopted very deliberately a strategy of value over volume with higher focus on the high EBITDA, high value products. While all industry level cement prices declined on sequential basis, we were able to keep it — contain it with our disciplined pricing and focus on premium product strategy. Our revenue per turn dropped to just about 0.4% outperforming the industry average. Premium products were central to our strategy, and with the share in the trade segment reaching last quarter to about 15%.
In line with the industry-wide phenomenon, our volumes declined by 7% year-on-year in the last quarter. We however kept sharp focus on efficiency in our operations which helped us achieve about 8% reduction in the total cost, excluding depreciation and interest from INR4,503 per tonne to INR,122 per tonne on a year-on-year basis.
Supported by favorable international fuel prices, our average CV fuel cost reduced from INR2.05 to INR1.71 on a year-to-year basis. This operational focus positions us well to capture future demand and the price recovery. Going forward, we are very confident that government led infrastructure projects will continue to play a key role in demand growth. With monsoon — good monsoon, higher demand is expected on the back of good kharif crop and improved farm prices. However, sustained price improvement depends on also on the steady demand recovery across segments. We believe that despite the current pressure, we are navigating these conditions by sending our brand focusing on key optimization and continuing operational excellence.
Very happy to report that on sustainability, we have made strong progress with green power comprising about 54.8% of our total power use, which is the highest in the cement industry. Work on adding 90 megawatts of green power capacity is going on, and we expect to complete the same by March 25th. All our facilities remain zero liquid discharge. We achieved over seven times water positivity last year. With plenty of rains, this year we aim to improve this further. Our commitment to sustainability is reflected in our improved score of 73 on the Dow Jones Sustainability Index which is the highest in the construction material sector in India, and a significant increase from last year’s 62.
Our ongoing expansion projects in Jaitaran, in Kodla, in Baloda Bazar, in Etah are running on track, and we expect all of them to be completed between April, June next year. We remain committed to reaching our goal of over 80 million tonnes capacity by ’28 and are actively identifying growth opportunities to meet the target. Thank you very much to give me a patient hearing. And now we can go to the question and answer as well.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] We’ll take a question from the line of Jyoti Gupta from Nirmal Bang. Please go ahead.
Jyoti Gupta
Good evening, sir. Well, my number is quite satisfied with the results, but I just wanted to know have we lost market share by any chance? Because there’s a stark decline of almost 7% in the east market or anywhere, or has been some change in the strategy in terms of volume change?
Neeraj Akhoury
So, as I said that we were quite aware that in Q2 the demand was very subdued. It’s not negative, and hence we were very clear that we should try to retain and give more importance to price over volumes. And this is why you saw that while we have lost on the volume, but we were able to deliver a better result, a relatively better result in terms of price. I do not have the market share figures, I will not really quote there. I will not go in that direction. But what we are aware that by all the reported figures that even the country demand has been negative in the last quarter.
Jyoti Gupta
Okay, so my next question is how do you perceive the company — second half for your company and what would be your guidance in terms of volume? And is there any increase in prices which you have seen in your key markets, and how do you see that? Do you see substantial improvement in EBITDA? Or are we going to be in the same range in the third and the fourth quarter as well?
Neeraj Akhoury
So, ma’am, as we are speaking now just about Diwali and Chhath festivals are over, from the macro side, we believe there is every reason for demand to be better in the next six months versus the last six months, largely because most of the budgetary allocations will now get converted into purchase orders across states. That is the hope and optimism that with which we are working. So, demand growth should be positive in the next three to — three months and six months. If that were to happen then as you know in cement, our industry demand growth has a close linkage with also the price evolution. If this were to happen then we believe if demand is good then we should see a better pricing environment. How much of that will translate into actual price is a difficult topic. But my sense is that if demand goes up and improves the way it should improve now, then we should be facing a better price environment.
Operator
Thank you. [Operator Instructions] We’ll take the next question from the line of Amit Murarka from Axis Capital. Please go ahead.
Amit Murarka
Yeah, hi, thanks for the opportunity. So, my first question is like what was the cement realization in the quarter?
Subhash Jajoo
Cement realization was INR4,447 per tonne.
Amit Murarka
Right. And so this is better from a Q-o-Q basis because what I have is INR4,469 for — or it was flattish on a Q-o-Q basis. So, INR4,469 was the number in Q1, right?
Subhash Jajoo
Okay, Q1, the figure was INR4,464.
Amit Murarka
So, in that sense, the cement realization actually was flattish for you on a Q-o-Q.
Neeraj Akhoury
What I was saying that our focus has been to maintain the realization knowing fully well that due to demand was subdued, the larger focus was how do you manage your realization?
Amit Murarka
Okay, sure. And also, in terms of the clinker sales, like what would happen, how much was the clinker sales in the second quarter?
Neeraj Akhoury
Clinker sales was also at about 3.1 lakh tonnes. Yeah, this is also low compared to 4.2 in quarter one.
Amit Murarka
Got it. And lastly on the capacity expansion, so what I understood you said that all the units will get commissioned in April to June next year. So, till March then there’s no commissioning that is planned, is it?
Neeraj Akhoury
So, our estimate as we speak in November is that the commissioning should be happening in April to June. Of course, as management we will try if we can prepone few things. But I am reasonably sure that commissioning should happen between April to June next year.
Amit Murarka
And this is both for clinker and cement units, right?
Neeraj Akhoury
Absolutely. Absolutely.
Amit Murarka
Sure. I’ll come back in the queue for my question. Thank you.
Operator
Thank you. [Operator Instructions] Next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
Hi, thank you for the opportunity. So may I know what is the regional sales mix for this quarter and the realization region wise?
Neeraj Akhoury
I can give you a regional sales mix. We were done about 58% in the north, about 31% in east and 11% in south. Remember that our north constitutes both also Gujarat, and Gujarat with us as well as parts of UP, so 58%, 31% and 11%. I don’t have the realization breakup, so I will not be able to give this. I’m asking my CFO Mr. Subhash Jajoo if we can share those numbers with you later.
Keshav Lahoti
Understood. And can you give an idea about how has been the growth region wise in this quarter, year-on-year volume growth?
Neeraj Akhoury
So, north growth has been about negative. You talking about Shree right? Not the industry. Yeah?
Keshav Lahoti
Yeah, I am talking about.
Neeraj Akhoury
It is minus 6% for north, minus 8 for east and about minus 10 for south.
Keshav Lahoti
Understood. Got it. It’s good to see — heartening to see 15% premium sales made. So how will this number shape up in upcoming quarters?
Neeraj Akhoury
So, as we speak now, we would like to stabilize in the going forward also, at around the same numbers. Once we stabilize then we will take the next jump to a higher level.
Keshav Lahoti
And what was the lead distance for this quarter?
Neeraj Akhoury
433, again it is down from 453 or 475 last year. Yeah, 475 kilometer last year. Current this year is 433.
Keshav Lahoti
Okay. So, the company have possibly sold less in the far-off market.
Neeraj Akhoury
Absolutely, the lead distance has come down.
Keshav Lahoti
So, ideally, this lead distance will stay over here, or possibly in upcoming quarter as the prices will pick up this lead distance might increase.
Neeraj Akhoury
Too early to say. Our intent will be to manage the lead distance around the same numbers, around the same numbers, but in case there are some markets where we find that attractiveness of prices is high, we might try to go back to those markets.
Keshav Lahoti
Understood. That is helpful. Thank you. That’s it.
Operator
Thank you. [Operator Instructions] Next question is from the line of Ritesh Shah from Investec. Please go ahead.
Ritesh Shah
Hi sir, thanks for the opportunity. First on working capital [Speech Overlap]
Operator
Mr. Shah, can you use your handset mode please? Your audio is not very clear.
Ritesh Shah
I’m on the handset. I’ll just repeat the question. Is it [Technical Issues] provide some color on the credit days which has been increasing consistently over last several years?
Neeraj Akhoury
I’m sorry, sir, your voice is little, not coming very clearly. Can you repeat the question?
Ritesh Shah
Hello. Hello.
Neeraj Akhoury
Yeah, your voice is not coming very clear.
Ritesh Shah
Sir, my question is on credit days it has [Technical Issues]. My question on credit days it has increased. Hello, yeah, my question is on credit days. It has increased for first half as well as last couple of years. How should one read into this?
Neeraj Akhoury
Your question is about credit days increasing, right?
Ritesh Shah
Yes, sir. So, March ’21 it was 20 days. If you look at March ’24 and even for the quarter ended, it is like 36 days. So, the number has increased continuously. So, is there some change in strategy? How should we understand this?
Neeraj Akhoury
We’ll get back to you on this. Yeah, our numbers are little different than what you were quoting. Let me get back to you on this. But having said that, no, there is no change in strategy in terms of market approach. We still operate on the same terms which we operated in the last few years. And it’s possible that last quarter, the demand being low, the outstanding has gone up slightly. Otherwise, but there is no change of strategy.
Ritesh Shah
And then my second question is, if I look at last two years or last five years, the discounts that we offer on a per tonne basis, it has increased significantly. So, if I look at a CAGR of last two years, the number is nearly INR600 rupees per tonne which in FY ’19 used to be INR330 rupees per tonne. Again, is this a conscious measure to increase the discounts as we widen the spread or as we try to push more volumes, how should we understand this variable?
Ashok Bhandari
No, no. Wait a minute. This is Ashok Bhandari here. Please understand that if we are saying that our rebate and discount are better than how our EBITDA is increasing? There is some disconnect in the understanding itself. You will appreciate that this quarter amongst the peer group, we have the highest EBITDA per tonne. We have a realization which is a minimal drop. We have taken a large volume drop, but that doesn’t mean that we have to do a rebate and discount increase also. And if that would have been there, then our EBITDA would not have been INR780 a tonne. It is highest in the industry. Will you acknowledge that?
Ritesh Shah
Yes. Yes, sir. But then my question was from FY ’19 to FY ’24. If you look at last five years, six years.
Ashok Bhandari
My friend, please appreciate that ’19 to ’21 is not comparable at all because of COVID years. ’21 to ’24, if I have an increasing EBITDA trend, then irrespective of rebate and discount, my NCR is keeping on increasing or my cost is going down at a much higher phase than the NCR. You appreciate that, so we’ll do the analysis. As you have pointed out, we must know, but then how is it possible that I am having an increasing EBITDA with an increasing rebate and discount? It can’t be.
Ritesh Shah
Yeah sir, that’s why [Speech Overlap]
Ashok Bhandari
So, if the market dynamics have changed, or if my market geographies have changed, then the discount might have got adjusted, but then ultimately my ultimate profitability is increasing.
Ritesh Shah
Sir, I’ll agree to what you say had the credit days been steady, but the credit days have also increased besides the discounts.
Neeraj Akhoury
Yeah, as I said, one of the topic that we covered is that last quarter has been a difficult demand month. Therefore, outstanding may have gone up. I am not having the last five years figure but last three years, if I look at it, that figure I have, that we are operating in a discount of roughly about the same range of 600 to 650, and that has not really changed. So, I don’t have the five years because I am not giving you that. But last three years I am not finding any change.
Ritesh Shah
Sure sir, I’ll circle back on the queue. Thank you so much.
Ashok Bhandari
What I suggest is that you exactly word your query and send it to either Mr. Subhash Jajoo or me and we will give exact calculations. There may be some different ways of calculating things.
Ritesh Shah
Sure, sounds good. Sounds good sir.
Operator
Thank you. We’ll take our next question from the line of Rahul Gupta from Morgan Stanley. [Operator Instructions]. Mr. Gupta, please go ahead.
Rahul Gupta
Thank you for taking my question. I just want to understand one thing. This quarter you prioritized premium products versus volumes. If I remember right, in the first quarter you shifted some volumes from north to east, where prices are relatively low, right. And you gain market shares on volume. So just trying to understand what is your strategy on volumes going forward? Can you just help us guide how you will fare versus the industry over the next couple of years? Thank you.
Neeraj Akhoury
So, you know what we have done, if I compare last few quarters it is true that last to last quarter one of this year, we had taken certain strategy. For now, what we have done, let’s say, north that we have considerably reduced our non-trade sales. So, our trade sale as an example in north has gone up to plus 65% odd, which was up from 59% in quarter one. And in non-trade, we were at 41% in quarter one, we have come down to a level of 35%. So that’s the kind of approach that we had taken, which I told you in the very beginning that price was more important for us than volume in this — in the last quarter, and a number of actions were taken of right geography, right segment, right product to make sure that we are able to deliver a better result on the realizations.
Rahul Gupta
Yeah, got it. So, just one follow up. Assuming that given that you have reached your initial target of 15% premium product, and you’d want to normalize this going forward, how should we look at volumes over the next couple of years?
Neeraj Akhoury
Volumes performance, I am convinced we should be in line with the industry demand growth. Yeah. Sometimes little higher, sometimes little lower, but we should be broadly in line with the industry demand growth.
Rahul Gupta
Got it. Thank you so much.
Operator
Thank you. [Operator Instructions] Next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hello, Mr. Akhoury. I wanted to follow up first on the question asked by previous participant. Just want to understand the strategy a little better, and then I’ll ask a follow up question. There was a strategy of taking market share, improving utilization and improving pricing. Quarterly, we’re not able to figure out what exactly is the strategy because it seems like the goal posts are changing every quarter, if I’m not mistaken. Just to understand when you say market, you expect volumes to grow in line with industry. You have dropped the utilization, market share guidance and focusing on maybe improving pricing. And how do you plan to improve pricing from here on? Then I’ll ask a follow up question. That’s the first question.
Ashok Bhandari
Hi, this is Ashok Bhandari here. Please understand that there is a classic disconnect between increasing volume and increasing pricing. If you want to change volume, you have to give up on pricing because everybody else will drop the prices to chase the same value. That is one part of the thing. Number two, as Mr. Akhoury pointed out, we were seized of the fact, if you recall my concall of June ’24, I had said two quarters, I find the industry to be in a difficult phase. We were seized on the fact that the volumes will be lower; A, because of delayed union budget; B, because of monsoon season, both got aggravated. The budget ultimately got presidential assent on 16th of August. So, we were anticipating practically no demand from government, who is the major buyer for infra. If you are doing — if you think that 60% is saying 30% is infra and 10% is industry, and if we have operated at about 60% then we have operated — we have catered to the housing. But 30% demand was just not there. This is all a dynamic situation, my friend. Tomorrow if the government demand comes up, if the pricing moves in a different manner, we will not be hesitating in increasing our non-trade share. It was well thought out, well understood that there will be very low infra demand. And that is why this strategy was adopted. We don’t — you have to be dynamic enough in the business to make more and more money. Whichever sale mix really gives you the best result, you will move to that. So, what is the strategy? The strategy is to maximize profits, come what so may.
Satyadeep Jain
Are you, Mr. Bhandari, saying the industry volume growth was minus 7% for the entire industry in this quarter Y-o-Y when you said [Speech Overlap]
Ashok Bhandari
No, my dear friend, one second, you are forgetting a major data point. Q1, the entire industry was negative and we were 1% plus. And we had at that time [Technical Issues] the demand should be robust enough. And when we realize the delay and the elections and the monsoon, we achieved the strategy. We are lowest in growth in volume terms, but then our EBITDA has become highest. There is nothing — please understand that we are in a — we are running a business and business you try to maximize profits. Thank you, Mr. Akhoury.
Neeraj Akhoury
Yeah. No, I think you have said very well. Let’s not use the word strategy. It’s more of a technical decision, depending on what kind of macro environment we are facing. And therefore, what is the right thing to do.
Satyadeep Jain
Second question, just wanted to ask on a follow up to that, Mr. Akhoury. The guidance of growing in [Indecipherable] industry for the next two years. Just want to understand why the urgency to add so much capacity if you want to grow in line with the industry, because you are adding capacity, new capacity [Technical Issues] for all these capacities, you’re going to grow in line with the industry.
Neeraj Akhoury
No, we are talking about next six months. No, we are talking about projects that are already in the pipeline under construction. In fact, now in the last part of the construction, which will be now commissioned in next five, six months, seven months. What we are saying, if the demand were to grow at the CAGR what we have observed in the past, it makes sense for us in order to conserve and maintain our market share to go up to 80 million tonnes by 2028 is what the guidance we have given to all of you.
Satyadeep Jain
Yeah, thank you so much.
Operator
Thank you. [Operator Instructions] Next question is from the line of Raashi Chopra from Citigroup. Please go ahead.
Raashi Chopra
Thank you. Just on the premium product, you mentioned that you wanted to stabilize at these levels. Are we talking about like a 15% sort of stable level for premium products.
Neeraj Akhoury
For next few quarters, 15% is what I have said. Yeah.
Raashi Chopra
And the last quarter was about 8%, right, 1Q?
Neeraj Akhoury
[Foreign Speech] 9%.
Raashi Chopra
And what was the overall trade sale proportion you mentioned for the north, but just your overall trade sale.
Neeraj Akhoury
We had about 74% plus, ma’am. Yeah. No, [Speech Overlap] no, total is 74%. 74% at all regions.
Raashi Chopra
Okay then just moving to the cost side. You know, you mentioned that the second quarter costs are about 4,122. So that’s essentially the total cost dividing by your cement volume, right? That’s not just cement cost.
Neeraj Akhoury
Total cost, madam.
Raashi Chopra
So the decline that we see in the EBITDA on a sequential basis, you know, despite having a flattish realization attributed to both cost as well as some other income going down, correct? Power or other miscellaneous income.
Ashok Bhandari
Well, let’s not put it like that, Raashi. Yes, the realization has dropped. The power is — we don’t give any separate figures. So, we are talking of blended EBITDA. And obviously if there is a dilution in margin, it is because of a relatively lower reduction in cost. Other income is more or less the same. Other operating income has also slightly gone down. So, revenue from operations have deflated more because of other operating income. My other income, which is tertiary income is about INR130 crores, INR135 crore. And cost though we have some declining trend, if you want, I can exactly quote you the numbers. Quarter on quarter, the capacity utilization went down to 56%. So obviously the recovery of fixed cost has gone lower. Our total interest rate is 76 versus 96 Q-o-Q. Our cement production is 70 vis-a-vis 91.6. So, you can understand that this, all these reductions have led to lower recovery of fixed costs and lower contribution. Am I clear to you, Raashi?
Raashi Chopra
Yes sir, clear. And on the fuel pricing, the 1.71, mentioned cost, where are we at now?
Ashok Bhandari
We are, this quarter we will be at about 1.65, 1.64, because of the pipeline inventory which we are carrying. But today we are purchasing at 1.51. So, the effect will come only in Q1 ’25 or maybe partly in Q4 ’25 Q1 ’26, I’m sorry.
Raashi Chopra
Understood. Sir, again, on the green energy, you indicated you’re adding 19 megawatts by March ’25. And beyond that, what is the plan? for March ’25?
Ashok Bhandari
See, let me make it clear to you. We have seen and we feel that 60% of the total energy max can be attained from green energy sources. We are trying to optimize this by having a combined, you know a hybrid kind of a thing where wind and solar can also be done, at the same site to have better PLF. But then these are all in working. We’ll get back to you. We are at 54.8. We’ll certainly reach 60 by June ’25 or something. Back to Mr. Akhoury.
Raashi Chopra
One last question on the capacity expansion. Everything is in 1Q FY ’26 take 3 million tonne Bangalore expansion, when is that coming?
Neeraj Akhoury
We are still working on it. We are trying to clear some of the — getting some of the clearances done. Once that is done then we will be able to be more accurate about when will the Bangalore facility come.
Raashi Chopra
Understood. Okay, thank you.
Operator
Thank you. We’ll take our next question from the line of Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar
Yeah, good evening, sir. My first question is on this other operating income or like the numbers you mentioned. So, does your reported realization of like 4,447 does it include the impact of subsidies, and has subsidies number changed on a quarter-to-quarter basis?
Ashok Bhandari
Prateek, what I suggest is that Jajoo has these details. Let him answer you, and subsidy, I have explained you that we recognize only on receipt basis, which is allowed in income tax also. So, we don’t want to unnecessarily take say the INR130 crore of subsidy recognized by Ambuja. Let Mr. Jajoo give you exactly the number of other operating income and subsidy included therein.
Subhash Jajoo
Prateek, first of all the realization number that we have given of 4,447 does not include the other operating income.
Prateek Kumar
Sure. Okay.
Subhash Jajoo
You want the number of other operating income?
Prateek Kumar
Yes, if you can give, then great.
Subhash Jajoo
It’s roughly INR66 crore as against INR45 crore last quarter.
Prateek Kumar
So, other operating income at INR66 crore in 2Q versus INR45 crores quarter on quarter. That’s what you said. Okay. Other question is we got some channel feedback like versus January, we had a big event in January regarding consolidation of brands into one brand and then focusing on premium manufacturer. That was a big event and a push there. So, and then there was some in 2Q particularly feedback there was some discontinuation of certain premium products. But you mentioned that payment mix have actually gone significantly higher, so responded to cross check there was no change versus what was launched in earlier part of this calendar year.
Neeraj Akhoury
So, the January initiative I don’t know, I do not know much about the event, but for the initiative it was initiative of the mother brand of the umbrella brand which is Bangur. That strategy of, coupled with Bangur master brand continues. We have of course introduced some new products in the market. Having said that, we also have — once we have stabilized the volumes of the new premium brands then we have also bought back some of our most tested brands back to the market. So, that is a study that we are following, and I think it is working quite well given that in premium we have been able to deliver a better result than last quarter’s.
Prateek Kumar
Okay, what specific products have we got back gentleman, asking?
Neeraj Akhoury
So, Roofon was for example — one product, Roofon was one of our very time-tested premium products in the market for Shree, and that is what we have now reinstated. Similarly, Jung Rodhak was one of the iconic products in India and iconic brands in India. Now it is coming back as Bangur Shree Jung Rodhak. So, we have made some tweaks, some changes, some alterations more to suit the market but overall, the results have been to our estimates quite favorable.
Prateek Kumar
Thank you. And my last question on depreciation. This quarter also for a very high depreciation. So, what is the expected depreciation number for this financial year and next financial year?
Ashok Bhandari
If you look at, Prateek, this is Bhandari if you look at the half year number it is at about 1,360. So, if you just double it because we expect to commission new plants only in April, June. This year depreciation number should be 2,700 kind of. However, you have given me the opportunity to explain that I had always been maintaining vis-a-vis Shree that please look at cash profit numbers and not net profit numbers. And I am very happy to say that in spite of whatever we have done, the cash profit still stands at about INR200 rupees a tonne vis-a-vis 259, 260 in last quarter. So, INR200 a ton is the cash — I’m very sorry, INR200 rupees is the cash EPS. Net EPS is INR25, and it is nothing, but because of an aggressive depreciation policy which you have been following. We are, we are cash centric. We are not net profit centric. And cash you will appreciate as the cash EPS has gone down marginally only, 15% cash EPS decrease vis-a-vis 24% overall of 21% number is quite good. And yes, we will at about INR2,700 crore of depreciation for the year.
Prateek Kumar
Thanks sir. I will get back in queue.
Ashok Bhandari
One more thing I have to point out that the half year depreciation number is almost double of last year’s half year depreciation number, because of commissioning of 6 million tons of new capacity and some waste heat recovery and other small capitalization. Am I clear?
Prateek Kumar
Sure. So, we’ll be commissioning a lot of more capacity like in next year also. So, that number of INR2,700 crore will remain a same number at like even next year.
Ashok Bhandari
I will really get back to you on the predicted depreciation numbers. It all depends on when, whether we commission it on first April or first June or 30th June. So, as far as next year depreciation number is concerned, please give us some time. However, please understand, I am again repeating that I always maintain that free is cash profit centric, not net profit centric, and I shall be indeed very happy if you pass the same message to the investors, that please don’t look at net profit of Shree, look at cash profit off Shree. By doing such accelerated depreciation, I am at a faster rate changing the nature of my non-fungible fixed assets to fungible cash assets, and over a period of time that makes a big difference. That is the reason why we are being able to finance all our expansions from our own internal generations. We don’t borrow.
Operator
Mr. Prateek Kumar, does that answer your question?
Prateek Kumar
Yes, sure. Thank you, sir.
Operator
Thank you. [Operator Instructions] Next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Yeah, thank you. Sir, first is on the capex of 1H, we have done close to INR1,860 odd crore so for full year and maybe next one or two year or previously we said INR4,000 crore capex, so that number remains intact?
Ashok Bhandari
Yes, it does. We will be roughly INR4,000 crore every year for next four years.
Shravan Shah
Got it. And sorry in terms of the October until now November broadly in our regions east, south and north, in terms of the prices how are they versus the Q2 average?
Ashok Bhandari
Marginally better.
Shravan Shah
Got it. And couple of data points are needed, are blended cement sells in Q2, road share in Q2 and fuel mix pet coke in Q2.
Ashok Bhandari
Mr. Jajoo will give you these data please.
Subhash Jajoo
The blended shale ratio is 70% for this quarter and you wanted what other things?
Shravan Shah
Road share and fuel mix pet coke.
Subhash Jajoo
Just one second, road rate is around 88% by road and 12% by rail.
Shravan Shah
Okay, and Pet coke sir, fuel mix?
Subhash Jajoo
Pet coke is 88% was the pet coke and balance was alternative fuel.
Shravan Shah
Okay. Okay, got it. And then this 2028 when we say we will be having a more than 80MTPS, so is it FY ’28 or calendar year 2028?
Ashok Bhandari
This is stretching too far. This is stretching taking too far, my friend. Let me — let us commission Q1 ’25, ’26 and we’ll get back to you. There are [Indecipherable] the Bangalore unit, Mr. Akhoury has said, we are awaiting regulatory approvals. Now, how does it matter if the commissioning is delayed by a quarter? You say March [Foreign Speech], at this stage it is extremely difficult to answer.
Operator
Thank you. We take our next question from the line of Lakshminarayanan K G from Tunga Investments. Please go ahead.
Lakshminarayanan K G
Thank you. A couple of questions. I just want to understand what is your correlate [Phonetic] utilization you target for the year across your central, east and south markets?
Ashok Bhandari
You are asking for full year guidance and capacity utilization or you are asking reasonable guidance first?
Lakshminarayanan K G
I just want to understand for the first half what has been our utilization across these three regions. And
Ashok Bhandari
I am giving it to Mr. Jajoo, he will answer it.
Subhash Jajoo
Well, the Overall utilization as Mr. Akhoury said is 56%. In north it was 58%, east 63% and south 40%. This is for the September ’24 gone by last quarter.
Lakshminarayanan K G
And in the next six months, among the three markets, which market you perceive that there will be relatively a better growth if you just track back.
Ashok Bhandari
Better growth as in better degrowth, we’re seeing, right?
Lakshminarayanan K G
I mean volume growth. I mean if you’re looking at the next six months volume growth, which market among these three would give a better growth?
Ashok Bhandari
Are you talking of last quarter or [Speech Overlap]
Lakshminarayanan K G
I’m just looking at the next six months. Among the three markets, which markets you think will grow better?
Neeraj Akhoury
I think the effort will be to grow, as I said, in order to maintain our market share. That will require us to grow across geographies depending on each geography’s market demand growth. But my expectation would be that we should see relatively better growth in north and south and somewhat more muted in east.
Lakshminarayanan K G
Got it. In non-India unit, what is the cash EPS that have been generated for the first half, the Middle East fund? For this year for the first half, what is the cash EPS for the released unit?
Ashok Bhandari
Let me repeat the numbers for you. Q2, my cash EPS is INR196 crores, INR197 crores. Q1, my cash EPS was INR260 crores. Half year 2025 is INR456 crores. Half year ’24 was INR478 crores. Irrespective of such bad market conditions, we are almost maintaining our cash EPS as per last year. That is why I am telling every one of you please judge us on cash profits, not on net profit.
Lakshminarayanan K G
Okay. Sir, my question is that our Middle East unit is making cash profits now.
Ashok Bhandari
Yes, it is.
Lakshminarayanan K G
Okay. Thank you so much.
Operator
Thank you. We’ll take our next question from the line of Prateek Maheshwari from HSBC. Please go ahead. Mr. Maheshwari, please unmute your line. Mr. Maheshwari? Since there is no response, we’ll move on to the next question from the line of Amit Murarka from Axis Capital. Please go ahead. Mr. Amit Murarka, your line is unmuted. Please go ahead.
Amit Murarka
Yeah, sorry. Hi. Yeah. Just one question on the other expenses. So, I see that Y-o-Y, there’s a 70% drop in other expenses when volume has dropped 7%, and two new clinical units are also in the base this year. So, just wanted to understand like why there’s a big drop in other expenses.
Ashok Bhandari
No, no. Wait a minute. You have to please appreciate, other expenses as a group includes what? Number one, in last quarter we had royalties included in other expenses. This quarter we have reclassified and other expenses have been reduced by an amount of royalty and added to the raw material cost, as is being done by most of the cement company. That is major reason [Foreign Speech] one second, INR100 crores is because of that. Secondly, the logistic costs have also slightly improved because of the drop in lead distance. Number three, as the units are getting stabilized, the stabilization expenses which were high in quarter one has also got sobered down, and is likely to remain around this level.
Amit Murarka
Also like you mentioned that every year there will be a INR4,000 crore capex that we plan to do. So, given that most of the expansion plans, at least announced ones are getting over in Q1. So, could you just explain [Speech Overlap]
Ashok Bhandari
[Foreign Speech]
Operator
Thank you. We’ll take our next question from the line of Prateek Maheshwari from HSBC. Please go ahead. Yes, but your volume is very low now. Yes, you can go ahead.
Prateek Maheshwari
Okay. Thank you for taking my question. One book keeping equation. What would be the power revenue for the September end quarter?
Ashok Bhandari
We have stopped giving power revenue separately, and we don’t intend to. I made it very clear in last quarter that will be giving you blended revenue from operations and blended EBITDA.
Prateek Maheshwari
Okay, thank you.
Operator
Thank you. We’ll take our next question from the line of Uttam Kumar Srimal from Axis Securities. Please go ahead.
Uttam Kumar Srimal
Yes, sir. Thanks for the opportunity. Sir, what is the current status of RMC plan? How many plants currently we have got, and how many plants we have commissioned at this center?
Neeraj Akhoury
So, on RMC, as you know, so this is the first year of our RMC foray into this industry. We started with more in the western south, in Hyderabad as well as in Mumbai, where we have taken five plants in Bombay and two in Hyderabad, that makes us seven plants to date. We are also constructing plants in other regions now, and what we had assured to the investors was five plants in year one. We have already crossed that to seven as I said, and I hope we will be in double digit by this financial year end.
Operator
Thank you. We’ll take our next question from the line of Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar
Yeah, thanks for the opportunity again. So just one question on your standalone and consolidated operations. So, one of your — couple of your plants are now in subsidiaries. So, is this meaningful volumes and revenue and EBITDA output in those plants, and would you be reporting like a consolidated volume sometime in future?
Ashok Bhandari
Look Prateek, what I suggest is that you send your exact query, and we’ll reply. It is these, since we are sitting with standalones and consolidated, we don’t have these numbers together at the moment. You send us a query and we reply, we’ll get back to you.
Operator
Thank you. We’ll take our next question from the line of Ritesh Shah from Investec. Please go ahead.
Ritesh Shah
Yeah, hi. Thanks for the opportunity, sir. Quick one. Sir, you did give a number on blended cement. Is it possible if you could bifurcate it into PPC, PSC composite cement, and if at all we have any plans for calcium clay that is [Technical Issues] cement and related question.
Operator
I am sorry, your voice is not very clear. Mr. Shah. Can you use your handset mode please? Yeah ma’am, I am on the handset, am I audible now? Yes, better. Please go ahead.
Ashok Bhandari
I don’t know. The reception at our end is very bad.
Ritesh Shah
Sir, my question is on blended cement you indicated 70%. Is it possible if you could break it up between PPC, PSC, composite cement, and if at all we have any plans for LC3 or [Indecipherable]. And the related question over here is any trends on a flash and flag sourcing costs and if you have any contracts in place which would be — which is longer duration and it helps us on the cost curve.
Ashok Bhandari
Let me put it like this that our fly air cost quarter on quarter has come down, and PSC CC or calcine or whatever you asking, we may like to keep it within ourselves.
Operator
Thank you. We’ll take a last question from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Rahul Gupta
Thank you for taking my question again. Can you just help me understand what was the lead distance in first quarter? I understand it would have come off, but can you please help me with the number?
Ashok Bhandari
So, 453 and 433.
Rahul Gupta
So, 453 was last quarter, right?
Ashok Bhandari
Right.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand over the call to Mr. Vaibhav Agarwal. Over to you, sir.
Vaibhav Agarwal
Yeah, thank you. On behalf of PhillipCapital India Private Limited, we thank the management of Shree Cement for the call and many thanks for participants joining the call. Thank you very much, sir. Yashasri, you can conclude the call. Thank you.
Operator
Thank you. [Operator Closing Remarks]