Shree Cement Limited (NSE: SHREECEM) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Unidentified Speaker
Ashok Bhandari — Senior Advisor
Subhash Jajoo — Chief Finance Officer
Analysts:
Unidentified Participant
Navin Sahadeo — Analyst
Rahul Gupta — Analyst
Pinakin — Analyst
Rajesh Ravi — Analyst
Jashandeep Singh Chadha — Analyst
Shravan Shah — Analyst
Harsh Mittal — Analyst
Lakshminarayanan — Analyst
Uttam Srimal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Sri Cement Limited Q3FY26 earnings call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Shaharu from ICICI Securities. Thank you. And over to you Mr. Naveen.
Navin Sahadeo — Analyst
On behalf of icicare technology. Hello.
operator
Yes sir. You can go ahead.
Navin Sahadeo — Analyst
Thank you. Good evening everyone. On behalf of icici securities, I welcome you all to the q3fy26 earnings call of sri cement limited. Today we have with us Mr. Ashok bhandari, senior advisor of sri cement. Mr. Subhas jaju, cfo, Mr. S.s. khandelwal, company secretary and Mr. K.k. jain who is head finance and accounts. So without any further ado, I hand over the call to the management for their opening comments. Over to you, sir.
Navin Sahadeo — Analyst
I had been following the practice of not making an opening statement because it unnecessarily repeats all the numbers which are already in your hands. So to utilize
operator
the time we missed the opening.
Ashok Bhandari — Senior Advisor
Good evening everybody. This is Ashok Bandari. As per my past practice, I shall not be making an opening statement as all the numbers are with you in the form of results. We may start the Q and A to use the time more efficiently. Thank you. Hello.
operator
Yes sir. Should I open for the Q and A?
Ashok Bhandari — Senior Advisor
Yeah. Yeah, yeah, yeah. Yes please.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead, sir.
Rahul Gupta
Hi. Thank you for taking my question. A couple of questions first. Given you are prioritizing absolute earnings, your volumes have lagged the overall industry to some extent. Now in fact, your operating rates would be more like mid-50s utilizations. Now how should we think about your capacity expansion plans and target of 80 million ton from the next two years perspective? How should we look at your volumes from the next two years perspective? That’s my first question.
Ashok Bhandari
Thank you Mr. Gupta. Thank you for your question. Now please understand that since October 24th I’ve been maintaining that we will be concentrating on for value over volumes. That was with the purpose. The purpose was very simple. We had a large divergence between our sales price and sales price of competitors like Ultratech. If you will notice, by restraining our volumes we have narrowed the gap from about 30 rupees a bag to about 15 rupees a bag. Now naturally, if you want to maintain discipline on pricing and narrow down the gap, you had to take the pain of sacrificing volumes.
That is what we did. And I am very happy to report that the December growth, though aided by additional demand over November, volume wise, November we sold about 27 million tonnes. December we sold 33 million, sorry, 2.7 million and 3.3 million tonnes. And January is more or less in line with December 25th. We expect the same momentum to continue with a much higher realization and it should automatically improve our capacity utilization. On the other hand, the capacity utilization will further be augmented by our concentrating more and more on RMC plants which shall give me a better geographical reach, a more logistical cost optimization and increase the volumes as well.
Now coming to your second question of our declared capacity of 80 by 29. 29 is still far off. We are still sitting in 26. We shall get back to you in due course.
Rahul Gupta
Got it? Got it. So, two follow ups. One, given you have narrowed the gap from 30 rupees to 15 rupees, is it fair to say that you would continue to focus on reducing this further? And my second question is, what would be the absolute revenues of the RMC business and how much cement your RMC would be would be using internally? Thank you.
Ashok Bhandari
My dear friend, your first question is infectious. You are saying that will you keep on reducing the gap? It is obvious I’ll keep on increasing my profits. So that is one part. The increase in profit mainly in cement is because of top line. The cost is more or less the same for the industry except in few factors. Point number two, as on date we have 19 RMC plants. We intend to take it to 45 within next six to eight months. Means you can easily assume that by September 26th the number of plants will increase to 45 from 19.
We started RMC about two years back and in three, three and a half years we will be achieving 45 plants. Whereas leading players in RMC like Ultratech has over last 25 years set up only 100 plants. So we are in track. It is very difficult for me because much depends on how the how the demand scenario emerges. But certainly all my RMC plants will be using my cement. And it will aid the cement quantity and capacity utilization.
Rahul Gupta
Thank you. Just what would be the revenues from RMC as of now? And what share of.
Ashok Bhandari
71 crore? One second. I’ll. I’ll ask Mr. K.K. jain to give the answer. It is 71 crore for the quarter.
Rahul Gupta
71 crore. Right.
Ashok Bhandari
For the quarter we did 71 crore my friend. On 19 plants.
Rahul Gupta
Got it. And how much captive consumption of cement is going into RMC?
Ashok Bhandari
45% is the captive consumption for RMC plant for the quarter.
Rahul Gupta
Thank you. Wish you all the best.
Ashok Bhandari
Thank you.
operator
Thank you. The next question is from the line of Pinakin from hsbc. Please go ahead.
Pinakin
Yeah. Thank you very much. Sir, in the September quarter the sales volume was 7.9 million tons. What would be the comparable sales volume in the December quarter? 8.7. That would imply a roughly 7% decline in blended realization. Which seems to be higher than what the peers have reported. What would be driving this decline realization? Sir?
Ashok Bhandari
No, no, no, no, no, no, no, no, no, no. You have to do your math correctly. Please understand that my pertinent realization has gone up. The blended realization. I don’t know how you are calculating. If you want we will give you a detailed calculation sheet. Mr. Jaju, CFO of the company will send you a mail. Or you can send him a mail asking precise question. I think you are mistaken somewhere.
Pinakin
Got it. So we were just basically dividing net revenues by.
Ashok Bhandari
So that is the point. You have to be slightly careful, my friend. You write. You write a mail to Mr. Jaju and Mr. Yaju will give you the reply.
Pinakin
So sir, what would be the comparable Q on Q change in pricing for the company?
Ashok Bhandari
One second. December 24th realization is not the answer. Yeah. December 24th it was 4652. December 25th, September 25th and December 24th is 4554. I don’t have the September 25th numbers.
Pinakin
Got it. Any color on the Capex for next year? At this point of time, how much will the company be spending?
Ashok Bhandari
As I said, we will be adding about 26 to 30R plants. And the CapEx expected is about 500 crore in FY26.
Pinakin
Sure. And so my last question is that it looks on a per term basis there is a decline in power and fuel costs.
Ashok Bhandari
Obviously there are two reasons. One is that my per kilo calorie cost is lowest in the industry sitting at 1.56. And my renewable energy has kept on increasing. And it has crossed almost 60. It has reached almost 61%.
Pinakin
Okay, okay. So this trend should continue, right?
Ashok Bhandari
This trend. Why it should not improve, my friend. You see, as far as the. As far as the per kilo calorie cost is concerned you have to understand that it is the function of international coal prices or Petco prices. I cannot take a call there. What I can say is over the 40 year existence of this company we have always been the lowest price procurer of fuel. And that is why my fuel cost is lower. My renewable energy portfolio has kept on increasing. We are having the highest renewable portfolio today. And we have reached almost 61%.
And we are trying to add 2 or 3% more. As far as Kodla, the new unit which is due to be commissioned by March. I’ll be having a waste heat recovery system there which will add up to my renewable or alternative energy. So the energy cost should logically come down if the coal and Petco prices do not go up.
Pinakin
Got it? Got it. Got it. That’s very clear. Thank you very much, sir.
operator
Thank you. The next question is from the line of Rajesh Ravi from HDSA security. Please go ahead. Sir. You may unmute your lines.
Rajesh Ravi
Hello.
operator
Hello.
Ashok Bhandari
Yes, Rajesh.
Rajesh Ravi
Am I audible?
Ashok Bhandari
Yes, you are.
Rajesh Ravi
Yeah. Hi sir. Good evening. So just few housekeeping questions. What were the trade? Non trade trade and blended cement share in this quarter and lead distance.
Ashok Bhandari
I will give the line to Mr. Shubhaju. He will give you the answer.
Subhash Jajoo
Lead distance for the quarter is 446 kilometer. And the trade sale is 65%. What else you want?
Rajesh Ravi
Blended cement.
Subhash Jajoo
Blended is also 65%.
Rajesh Ravi
Okay. And if I look your fuel cost sequentially this has come down by around 10 paisa. So there is a 50 rupees per ton saving. And your green power mix remains similar. So you know, how is the power cost pattern at a company level?
Subhash Jajoo
Power ton power cost per unit. Average power blended.
Subhash Jajoo
Yeah, one second. One second means bought out and renewable land, waste heat recovery and everything.
Rajesh Ravi
Yes, yes.
Subhash Jajoo
I may not be having that data immediately. I will send you. We’ll get back to you Rajesh on this.
Rajesh Ravi
Sure, sure. Yeah, certainly. And the realization for the quarter you mentioned was 4625, right? Gray cement.
Subhash Jajoo
Yes. 4652. So which is almost 3%. 4% decline quarter on quarter.
Subhash Jajoo
That is what I’m trying to figure out. The earlier somebody had asked a similar question.
Rajesh Ravi
No, on a blended basis. Because you don’t disclose the power revenues. That is why the blended number.
Subhash Jajoo
What I’m saying is that we can. We. We will you write a mail to us. We will reconcile the numbers and get back to you.
Rajesh Ravi
Understood. And you know, just wanted to understand. You mentioned that the. You know, you’ll be focused more on bridging the gap and getting a better price and realization. So at least on the volume, what sort of growth one should build in for, you know, this year? Because earlier you were looking at 37 to 38 million ton for this year which seems there could be a slip of 1 to 1 to 2 million ton on the volumes.
Subhash Jajoo
So I explained. I already explained what was the rationale.
Rajesh Ravi
Right, understood.
Subhash Jajoo
Mr. Ravi, please hear me out fully. Number one, the demand in October and November was low. That you know.
Rajesh Ravi
Right.
Subhash Jajoo
Which I had no control. December the demand picked up. We have picked up more. January, the trend is likely is similar to December. We don’t find any let up in February and March. Because you. The central government budget has to be spent by the 31st of March. So I don’t think there will be any let up in. In volumes. I can easily and with great deal of confidence say that within this quarter we will do 9 to 9.5 million tons in total. Yes. I will not be growing at 7 to 8%. But then that was a function of low demand.
What to do?
Rajesh Ravi
Right, right.
Subhash Jajoo
But going forward I am confident that we should do you see today the RBI governor has pointed out to a 7.4% GDP growth growth rate for 2627 in his MPC. And I had been maintaining that Siemens generally grows at 1 to 1.1 time national GDP. So next year I expect the demand to be around 7 and a half to 8%.
Rajesh Ravi
Great. Great. And lastly, if you could share the UAE performance which you did in last quarter.
Subhash Jajoo
It is getting better by the day.
Rajesh Ravi
Okay. Possible to share the volume review in the beta number.
Subhash Jajoo
I will not. I will. I don’t have the UAE numbers with me at the moment. We’ll share with it.
Rajesh Ravi
That’s all for now. I’ll come back into you. Thank you.
operator
Thank you. The next question is from the line of Indajit Agarwal from clsa. Please go ahead.
Unidentified Participant
Hi sir. Thanks for the opportunity. Couple of questions. First. I’m sorry I missed your name. I missed your name.
Unidentified Participant
Indrajit Agarwal from clsa. So first on pricing, can you indicate how the trends have been so far in January and heading into February both on December?
Ashok Bhandari
As I said, the December pricing was much better and the same trend is continuing. We don’t see any let up in demand because of the because of the central government compulsion of completing the exhausting the budget within this quarter. So if demand is good then pricing will remain good. As a matter of fact, as we have been focusing and we have been achieving convergence in or reducing the delta between our price and ultratech price I expect the same trend to maintain maybe at a slower pace. Because I will be doing volumes now also.
Unidentified Participant
And sir, secondly, do you think that from now on we will continue to grow ahead of industry or largely in.
Ashok Bhandari
Line with industry at least let us say if I want to push volume then I have to sacrifice price, isn’t it? Both don’t go hand in hand. So it is a calculated equilibrium game which we have to play as the scenario emerges. We’ll keep on updating you as well as on date. I expect no net up in demand and no let up in pricing.
Unidentified Participant
Sure. Thank you. That’s all from my side.
operator
Thank you. The next question from the line of Chashant Deep Singh Chadha from Nomura. Please go ahead.
Jashandeep Singh Chadha
Why are you troubling me? Thank you so much for the opportunity. I won’t trouble you myself. Just a couple of quick questions. Firstly say you know SHE Summit has been operating in multiple regions. I want you to understand the basic understanding of how all the regions are performing. Not necessarily from she perspective but from industry perspective.
Ashok Bhandari
One second. One second. Can we be at divergence with the industry region wise. So we will be in line with the industry only. Exactly how much SRI has sold in reach reason of its capacity. The number I am asking Mr. K.K. jain to share with you that in this region means SRI is capacity is hundred. Then region wise how much we have sold in this quarter. And that should be roughly the line of operation of all Pan India cement companies. Regional companies. It’s not comparable. So I’m asking Mr. Jain to give you the reply.
Unidentified Speaker
Yes.
In north region the sale is 50. 53. Lectern 5.3 million. Sorry. Lectern and east 23 and south 11. And in percentage of time it is 51%. In north is 26% and south 13%.
Jashandeep Singh Chadha
Thank you so much, sir. This is a very valuable information. But I was also looking from. You know from January and going ahead which region you are seeing. You know uptick.
Ashok Bhandari
What is the date today, my friend? 86. What is that?
Jashandeep Singh Chadha
January onwards.
Ashok Bhandari
Let the January numbers come to me.
Jashandeep Singh Chadha
Okay, sir. Maybe you know once they’re out, I’ll reach out.
Jashandeep Singh Chadha
Yes. The second question was on the. I understand. On per kilo calorific value. SHE Cement has been the lowest and will continue to be the lowest. But with Petco, you know international price is going on. What kind of impact will be on the cost for fourth quarter?
Ashok Bhandari
Please that nothing stops me from changing from coal to petcoke or petcoke to coal. I have multi fuel burners. This is a constant exercise which my purchase people do that which mix gives them the best landed fuel cost. I am not at all concerned with international prices. I am concerned with landed cost of fuel because that is the actual cost to me. So this is a constant exercise. As on date we are at 1.56 per kilocalorie. It may remain same for January but it may go up in February and March. In any case I don’t think it should increase 1.80 which is my P fuel cost.
Unidentified Participant
Understood sir, understood. Thank you for that. Just one last more of a clarification if I can understand from your previous, you know answer to the previous question. We are expecting 7 to 8% viable growth from the industry. And CCMN will largely be in line with the industry. Is my understanding right sir,
Ashok Bhandari
your understanding is correct. With a caveat that we have generally grown better than the industry last one year you leave because that was with the strategy of narrowing the gap between the selling prices. But once we have achieved that then probably we may grow better than the industry also. But let the time tell its own story.
Unidentified Participant
Sure sir, sure sir. Thank you so much. And all the best for the future sir.
Unidentified Participant
Thank you. Thank you.
operator
Thank you. The next question is from the line of Shravan Shah from Dollar Capital. Please go ahead.
Shravan Shah
Yeah, yeah. Thank you sir. Sir, two questions. First in the last con call Q2 you highlighted that investors who look at the 3 cement from the console perspective. But. And in last two quarters you have said the UAE volume this time this is not part of the press release. And also post the call when we try to connect with the. With the CFO service. He is not ready to share the numbers. So how one can. Can. Can look at these things. This is first part. Second.
Ashok Bhandari
Let me stop you here. One second. Do you mean to say that we have not published consolidated numbers,
Unidentified Participant
no volume. I’m. I’m saying one second. So
Ashok Bhandari
please go through the results. I don’t think you have gone through the results. Please go through the results. Standalone is there, consolidated is there. And you very well know how to calculate UAE from the two numbers. So what are we trying to say? You try to make the simple things difficult at all the times whenever we receive your call.
Shravan Shah
Sorry sir, where. When did I I may make it difficult.
Ashok Bhandari
Let us not argue on this. You ask your second question.
Shravan Shah
Yeah. Sir, what’s our clarification on the MCA investigation that is on under section 200.
Ashok Bhandari
There is no investigation. It is a routine inquiry. They have asked for information. The information has been shared. They have not come up with any report. So what do I do?
Shravan Shah
Okay. No issues sir.
Ashok Bhandari
Yeah.
Shravan Shah
Yeah. Sir, road rail mix for this quarter and.
Unidentified Speaker
Road rail is 88 and 12 and.
Shravan Shah
Fuel mix pet coke and coal and.
Ashok Bhandari
It’S 76% pet coke, 6% coal and balance is alternative fuel and capex. Till now how much we have done.
Shravan Shah
And for f till now we have done around 1500 crore and another 400500 crore is to be done in this quarter.
operator
May we request that you return to the question queue for a follow up question. The next question is from the line of Satyadeep Jain from Ambed Capital. Please go ahead.
Unidentified Participant
Hi. Thank you. Just first question on the strategy on pricing versus utilization. You varied capacity in north and south in the past few quarters. How do you look at an ideal utilization given these capacities have been added but overall volume increase is not there. So is there an ideal utilization you look at when starting an asset to optimize the operating leverage fixed cost there. Please
Ashok Bhandari
appreciate that I had always been maintaining then. Demand is not in the hand of any cement manufacturer. Demand emanates from overall growth within the economy. We are not happy with our current capacity utilization. We are taking steps to correct it. We have corrected it largely to some extent in January. I have also pointed out that we are concentrating on setting up more and more RMC plant which should give me a fillip in capacity utilization. But at this point of time especially in this quarter because this quarter may be the demand may be abnormally high due to pull from the central agencies.
We may better answer this question in the first quarter of 2627.
Unidentified Participant
Sure sir. In that context we focus on utilization. How do we look at the 18,000,010? Would you rather wait to improve utilization? And what’s the progress on Jaisalmer?
Ashok Bhandari
Generally your thinking is correct that we are not announcing specific sites and specific plants only because we want the capacity utilization to increase. I had hinted that 80 by 29 may get deferred or may culminate is completely dependent on how the demand comes out in 2627. So this is a question for which I don’t have a ready answer. I would like to expand. Please understand that 3Cement has increased its capacity 110 times from 1985 means in last 40 years we have grown 110 times in capacity. So our growth has not been lagging. Our CAGR for growth is 12 and a half percent plus and we expect to do it better.
But then you must set up capacity not for idle capital but for productive capital which is a function of demand. If the demand doesn’t have the necessary leverage what is the point in setting up capacity and operate? Keep on operating at 56, 60%, 62%. Ideally we should reach 70% kind of a capacity utilization. Now whether it takes place in one year or in one and a half years time can only tell.
Unidentified Participant
Okay, perfect. Thank you so much.
operator
Thank you. The next question is from the line of Siddharth Mehartra from Kotak Security. Please go ahead.
Unidentified Participant
Thank you sir for the opportunity. Sorry if I missed this number. So what is the capex we are expecting for say 2027?
Ashok Bhandari
Look, my major focus is going to be 26 RMC plants. 26 or 30 per RMC plant. It costs 4 to 5 crore. It costs about 5 crore so 150 crore. Visibility I have balance is completely dependent on how I attain. How I try to attain. Like June 26th. Sorry March 20th. March 26th we will be completing Kotla plant. We have spent about 2,000 crore of capex in this financial year. Next financial year I am giving you 150 crore capex. I am. I am also working on railway sidings which should be about how many crore per kilometer.
Around 150 crore or 200 crores. About 200 to 250 crore on. On. On railway siding. So 5, 4 to 500 crore of capex. Visibility is clearly there. Balance visibility I’ll be able to give you once I start planning my further capacity addition. So you will have to give me one more quarter to give you more clarity on this. However you are fully. You fully. You may be fully aware that we are completely debt free. And we have about 6,000 thousand crore of free cash sitting in our balance sheet. So we are not worried about the quant quantum of capex.
We can. We need to spend. We would like to be watchful of the demand and the potential capacity utilization.
Unidentified Participant
Understood sir. So essentially that means we are planning to put at least two railway sidings approximately 150 to 200 crore for siding as well as the RMC plant. 500 crore. We have clarity and maybe some additional capex. This is whatever your capacities. You sort of decide which I’ll be.
Ashok Bhandari
Able to tell you either in next count call or in the June call. I don’t Know you will have to give us time.
Unidentified Participant
Okay. Second sir, can you sort of quantify what sort of industry growth was prevalent in 3Q for the investigation? Some ballpark number.
Ashok Bhandari
The Q3. You see, it is not comparable. I had a different strategy of operating my plants. The industry had a different strategy. So they are not apple to apple comparison. I was concentrating more on value less on volume. So obviously my growth was lower than the industry. If you want we can share those numbers of those numbers will be available elsewhere also. But you can write a mail idle to Mr. Subhas Yaju or to me. And we will give you the reply. We have not grown to our fullest capacity. To our fullest. What should I say? Potential by design.
Now we will see how it works.
Unidentified Participant
Got it sir. Got it. Sir, can I just please get the power mix? Blister is possible. Like 34 megawatt was the total green power mill. There should also be additional captive power. So could you just lay out what are the individual components.
Ashok Bhandari
Wait a minute. Mr. Jaju will give you exact power plant capacities of various kinds.
Unidentified Speaker
See, our total power capacity is currently 1137 megawatt. Out of which 503 is the thermal power capacity. And balance is all green. WHR is 265 megaw. Solar is 314 and wind is 56. So 64 megawatt of green capacity. 503 of thermal total 1137.
Unidentified Participant
Understood. So just one last question. So if I could squeeze in a couple of your peers have sort of founded out that this is a very interesting and exciting opportunity in UAE to either sort of increase their stake in subsidiaries there or expand their capacities there in additional grinding units. So sir, given the fact that you already have a long standing exposure to that geography.
Ashok Bhandari
Let me stop you here. My dear friend. Do you think that if there is a profit opportunity 3Cement will let it go bagging if there is potential, if there is real demand per cup. If it is, if the operations are are profitable or good enough profitable will certainly do whatever is required to be done. We have the largest cement plant in UAE today in our control.
Unidentified Participant
Nothing has changed. At least from our perspective. In terms of the market opportunity.
Ashok Bhandari
No, I would not like to comment on that as of yet. I’ll comment in March.
Unidentified Participant
Understood. Thanks. Thanks a lot for your time, sir.
operator
Thank you. The next question is from the line of Tushar Chaudhary P limited Please go ahead.
Unidentified Participant
Good evening sir. Good evening. First of all please do me a favor. If you meet Amisha bank tomorrow please give my regards to Her.
Ashok Bhandari
Sure. I just wanted to know this. Employee cost is little bit higher this quarter. Is it because of.
Ashok Bhandari
Read note number three of the result?
Unidentified Participant
Okay, I missed that. Then Impact? No. So volume. Actually I wanted to know how much is the.
Ashok Bhandari
Listen. The new labor quad has made me provide for all back liabilities which is amounting to 56 crore. We do not show any expense as an exceptional expense. Because it is all in routine course of business. So we have additionally provided 56 crore as required by the law. And we have disclosed it by way of a note in note number three. This is an employee. Now what is the second question?
Unidentified Participant
Volume 2% growth is written. Last year it was 8.77.
Ashok Bhandari
So last year what had happened? My dear friend. Last year what was my realization? This is this year what is my realization? December 24th, my realization was 4554. Is it correct? Yes. And December 25th, my realization is 4652. So you sell to lose money or you sell to make money. We have deliberately constrained our volumes to decrease the delta between other selling price and my selling price.
Unidentified Participant
Understood that we have reduced it by. 50% now we’ll see what. What to do then.
Ashok Bhandari
No, no. I understood that. Sir. You had extended pretty well earlier who percent volume growth is. Then is it including clinker. That I. I don’t remember it often.
Unidentified Participant
This prestige is saying 2%.
Ashok Bhandari
I will. I will get back to you. You send a mail to Jaju and you will get back to you the exact numbers.
Unidentified Participant
Sure, sir. Thanks. Thanks.
operator
Thank you. The next question is from the line of Naveen Sahadio. Please go ahead.
Unidentified Participant
Yeah. Good evening, sir. Am I audible?
Ashok Bhandari
How can you not be audible?
Unidentified Participant
Thank you, sir. So my question. My. My question was on this value versus volume strategy in the context of market share as well as industry superior profitability like past four quarters. As you mentioned in your opening comments. Since October 24th, the strategy of value over volume was clearly I think rewarding us in terms of significantly higher EBITDA per ton or margins versus the peers in this quarter. It is a bit of a dampener. And also of course the volumes are also like. You know, some. Maybe if I may say some loss of market share.
Ashok Bhandari
Slow down. Slow down. Slow down. Hear me out. There were two major changes in our sales strategy in last one year. One was that we had made our debate and discount policy so transparent and non negotiable and non discretionary that the. That the favor dealers were getting pissed off. So it took them. It took some time for them to realize that this is A non negotiable policy. And now they have fallen in line. And number two is that in November we have inducted a new president marketing. And he has shown good results in last one month, one and a half month.
So I expect that the thing should be better in incoming times. Now of course I can say anything. I cannot be but be bullish on cement. So I will keep on talking bullish sentiment on cement. But please understand that demand is not in my hand. If demand is there, you will not find us wanting.
Unidentified Participant
Helpful. Helpful. Thank you so much. My second question then was on realization again. So in I think in Q4, in Q3 we have sequentially I think realization drop is about 4 odd.
Ashok Bhandari
All of you are saying this. Unfortunately I don’t have this number. Maybe this is correct. Maybe there was a drop in realization or whatever. But you ask me a pointed question. Or you come. You keep on coming to Calcutta. Come one day I give you good tea. You have nice teachers. I will give you good lunch also if you want. And we’ll discuss this.
Unidentified Participant
Right sir. So then I’ll. I’ll have the discussion over there.
Ashok Bhandari
It is better we talk more freely and with all the data.
Unidentified Participant
Sure. Thank you.
operator
Thank you. The next question is from the line of Indrajit Agarwal from clsa. Please go ahead.
Ashok Bhandari
Yeah, sorry.
Unidentified Participant
Yeah, sorry, I missed one. I just want to clarify one number. Did you say fourth quarter rendered to be similar as December and nine to nine and a half million tons volume in fourth quarter?
Ashok Bhandari
Yes, I did.
Unidentified Participant
So that would imply more or less flattish yoy number. Is that understanding correct?
Ashok Bhandari
Maybe 1 or 2% growth. I don’t know. I do. I have not done the math.
Unidentified Participant
Sure. Thank you so much.
operator
Thank you. The next question is from the line of Harsh Mittal from MK Global. Please go ahead.
Harsh Mittal
Just one question. Given that our cash level as on December ending with 6,000 crores and we are expecting a healthy cash flows in the coming year with a limited capex. So sir, can we expect a material upside in the dividend outlay going ahead?
Ashok Bhandari
Let us understand material is a relative definition. So let us. Let me assure you that yes, the dividend payout will be better. It is not my prerogative to say how much better. How much not better. That is up to the wisdom of the board. But I expect the dividend payout for 2627. Sorry. For 2526 to be better than 2425. And it is not a differential of 5 rupees kind of a thing. We may give you a better one.
Harsh Mittal
Thank you sir.
operator
Thank you. The next question is from the line of Lakshminarayan from Tunga Investments. Please go ahead.
Lakshminarayanan
Yeah, thank you sir. On the return metrics for the company we see that it’s currently trending downward predominantly because of lower profitability.
Ashok Bhandari
Please let me correct you. The profitability absolute number has gone down because we had by choice taken a value over volume path. Please understand we have achieved the convergence in vis a vis say ultratech on per bag prices. So it is not that the capacity utilization has substantially affected my profitability. It was my design that it had of lower volumes to better my prices which had affected the profitability.
Lakshminarayanan
Got it? So my question is slightly different. I mean I understand your point now Our ROCE or ROEs are trending downwards over a period of time. So given this trend what is the primary metric the company prefers to evaluate its long term performance?
Ashok Bhandari
One second my dear friend. Let us understand. If I keep on making profit, my capital employed keeps on going up. If the additional profit I am not distributing or I am not utilizing for capex then it is giving me a 4 to 5% freeway return. So if you combine everything you find that is the ROCE or the ROE is going down on the other hand and committed to add on capacity to 80 million tons. So what do I do? I have to bear the pain of rather inefficient cash utilization in the form of treasury till I finalize my plan to have major CapEx for the first time in my career.
I think I have spoken of a 400 to 500 crore capex visibility in next financial year. We have never done that. But then the demand scenario is such that I cannot give you a firm commitment on when my capacities will come up. As soon as the capacities come up the 4% return cash once cash or the return on cash of 4% will translate into 20% which will automatically jack up the ROCE and ROE. So you will have to bear with me.
Lakshminarayanan
Sure. Thank you so much.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question you may press star and 1. The next question is from the line of Uttam Srimal from Access Securities Ltd. Please go ahead.
Uttam Srimal
Thanks for the opportunity sir, my question pertains to premium cement. So we have made a very good progress from 15% last year to 22, 10% last year. 22%. So where do we see this number going forward in next year? Can you have you read any cement research report which has talked of anything else but premium cement? So if everybody is going to make premium cement then where Is the premium here?
Ashok Bhandari
Yes. The premium cement becomes the normal cement number one. Number two, the brand belongs to the company. The classification of brand also belongs to the company. There is no standard which defines premium cement. So it is your 10 brands, it is your pen and it is your pencil. And whatever you want to put, you put as a premium brand and sell it. Because there is no yardstick to define what a premium cement is. So please understand we are at about 21, 22%. We are. We have defined our premium brands and we are sticking to it. We are not changing the mix of micro cement as.
As for my convenience. And at the moment with the current demand scenario we are at 21 22%. And we expect to maintain the same run rate for this financial year. Next year what will happen? Let us see.
Uttam Srimal
In next year what would be our depreciation cost?
Ashok Bhandari
What will be our
Uttam Srimal
depreciation?
Ashok Bhandari
Should be about 1600 crore.
Uttam Srimal
1600. You said 1600.
Ashok Bhandari
Yes, I said 1600.
Uttam Srimal
Okay sir, thanks a lot.
Ashok Bhandari
That’s all from 1600 and 1700. Please don’t. Don’t hold me to the number. But it will as I. As it had me.
Uttam Srimal
Okay, that’s all from my chat. Thanks a lot.
operator
Thank you. A reminder to all participants to press star and one to ask a question. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Rajesh Ravi
Just a follow up question on the realization which you explained that you have bridged the gap with Ultra Deck. And I believe that is visually numbers. When I compare yours with the like to like numbers of Ultra deck. In last one year while your competitor has shown a 50 rupees decline your realization has gone up by 100 rupees. And similarly is the trend in for last two years there is a sharp swing upward on your numbers. However, if I look at the margin front, your margins have been, you know, more or less flattish year on year.
While the competitor has seen a margin upswing both on a year on year basis, on a two year basis. Is it like you have maintained your.
Ashok Bhandari
One second Fixed cost recovery is completely dependent on capacity utilization, right? That you appreciate? Yes. To catch up on the value terms I had sacrificed volumes. So my fixed cost recovery was less dropped. Now if I play intelligently, my fixed cost recovery will improve and my margins will also improve. Since the first time in the history of this company that I have reported a more or less equal ebitda per ton net of labor code expenses vis a vis Ultra Tech. Otherwise we had always maintained 100 and 100 to 150 rupee Delta plus side and I expect to catch that up.
Rajesh Ravi
That’s happening. And so just on the. Adjusted for the labor cost still your employee cost is higher by 20 crore quarter on quarter versus 250.
Ashok Bhandari
My dear friend, what happens if I increase my capacity?
Rajesh Ravi
Okay.
Rajesh Ravi
This is with regard to the new plant ramp up. Okay. So we should factor in this number as. No. Okay. As a recurring number and according. And the lastly just on the UAE business you would want to. Could you make it a practice to end the press release only to share the volumetric and the you know numbers in ad. Would that be more useful for us?
Ashok Bhandari
I will certainly give a thought to this. Give me one quarter. Let us see what I can do in next quarter.
Rajesh Ravi
Sure, sure.
Ashok Bhandari
And then I will certainly do that.
Rajesh Ravi
And the lastly could you repeat the capex number for full year and next year? What are you targeting
Ashok Bhandari
this year I’ll be doing 2000cr.
Rajesh Ravi
Okay. Okay.
Ashok Bhandari
I’ve already done. I have already completed. I’ll be doing about 500cr in next. In this quarter means January, March.
Rajesh Ravi
Okay.
Ashok Bhandari
Next year I have one second next year I have not formed up my plan on further cement capacity addition. We have frozen the plan. The plan to set about 30 RMC plants. One RMC plant cost roughly 5 to 6 crore.
Rajesh Ravi
Okay.
Ashok Bhandari
You take about 200 crore for RMC 200 crore for my railway sidings and 150 to 100 crore. So I am giving a guidance of next year CapEx at 500 CI.
Rajesh Ravi
Okay.
Ashok Bhandari
But I’m putting a KVA that this is only because I am. I have not found out my plan of adding up further capacity. If that gets. If that gets fortified the number will substantially change. But you will have to wait for that.
Rajesh Ravi
So just to confirm that. Clear sir, that is clear. And so there’s no capacities which will come on stream next financial year at least because nothing is. No concrete work is going on as per. You know.
Ashok Bhandari
Yes. I. I don’t think. I don’t think we will go beyond 72 million ton which we will achieve by March 26th.
Rajesh Ravi
Okay, great. That’s all from my end. Thank you.
operator
Thank you. The next question is from the line of Naveen Sahadio from ICICI security. Please go ahead.
Navin Sahadeo
Yeah, I’ll take the last question sir. So in the like. You know you mentioned that we have narrowed the price gap versus the industry leader from 30 rupees to 15 rupees. So what is then the next milestone? Is it coming at par or is it like. You know how should one Benchmark it that at that point of time onward, then we again start chasing.
Ashok Bhandari
I don’t have the capacity or capability or even the. Even the enthusiasm of saying I will sell it with ultra Tech. If I say that, you will not believe it. But on the other hand I, with full confidence I can say that I’ll maintain the Delta visa on a visa per turn basis vis a vis competition which I had been doing except in this country quarter. I’ve been doing it for 40 years. That you know. Of course, of course this quarter, TK we lost out on volumes. It’s all right. It was a calculated move.
Navin Sahadeo
On the staff cost. I just wanted to know what would be the normalized cost. I mean this quarter, of course, you.
Ashok Bhandari
Ask this to judge. I don’t know.
Navin Sahadeo
Last question to you, sir. Last question. At a broader industry level, do you think non trade share or non trade exposure is rising because everybody is chasing those bulk volumes, RMC units. Is that a fair thing to observe or no?
Ashok Bhandari
No, no. I think you are. As I told you, my dear friend, this quarter becomes very typical. Non trade is basically the large purchases by infrastructure project. This quarter the government has to finish the budget allocated in 26, 25, 26. So this quarter you may have a. You may have a trend where non trade may be more, but I don’t think that is a sustainable trend. We will go back to 75, 25, kind of a level. We are today at 6535.
Navin Sahadeo
Understood. Very clear, sir. Thank you. Thank you so much.
Ashok Bhandari
I shall listen. Yeah. Is your last question finished?
Navin Sahadeo
Yeah, yeah, I’m done. There are no more questions.
Ashok Bhandari
So why are you always the last one to shaft me. Over T will discuss. Thank you. You can go ahead and conclude the call, please.
operator
Thank you on behalf of ICICI securities limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.