SHRI KESHAV CEMENTS AND INFRA LIMITED (NSE:530977) Q1 FY23 Earnings Concall dated Aug. 11, 2022
Corporate Participants:
Supriya Madye — Investor Relations, Kirin Advisors Private Limited
Venkatesh Katwa — Chairman
Analysts:
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Unidentified Participant — — Analyst
Sandeep Mane — — Analyst
Avinash Gorakshakar — ProfitMart Securities Pvt. Ltd. — Analyst
Nilesh Karani — Magnum Equity Broking Limited — Analyst
Apurva Mehta — — Analyst
Vaibhav Sharma — Cogent Research — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q1 FY ’23 Results Conference Call of Shri Keshav Cements and Infra Limited, hosted by Kirin Advisors Private Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Supriya Madye from Kirin Advisors Private Limited. Thank you, and over to you, ma’am.
Supriya Madye — Investor Relations, Kirin Advisors Private Limited
Thank you. Good afternoon, ladies and gentlemen. On behalf of Kirin Advisors Private Limited, I thank you everyone for joining the second conference call of Shri Keshav Cements and Infrastructure. Today, we have with us Mr. Venkatesh Katwa, Chairman of Shri Keshav Cements and Infrastructure.
Now, I hand over the floor to Mr. Keshav — to Mr. Venkatesh Katwa. Over to you, sir.
Venkatesh Katwa — Chairman
Thank you, Supriya. Hare Krishna and a good afternoon to everyone. I trust everyone must be in a great health today. And as we know today is an auspicious day of Raksha Bandhan, I extend my warm wishes to you all on the call on this occasion.
So, I — to begin with, I thank you for being attending this call and I welcome you to the second conference call of Shri Keshav Cements and Infra Limited for first quarter financial 2022-’23 results discussion. Just to brief again about our Company, Shri Keshav Cements and Infra Limited is a public limited company, which was incorporated in 1993. The inception of the Company began with the acquisition of a sick unit, small sick unit in 1994 of just 20 tons per day. So plan was gradually increased to the current capacity of 1,100 tons per day, which is almost 0.35 million tons per annum capacity. We have two manufacturing units both in Bagalkote districts of Karnataka. And currently as of now, we operate into two business segments, one is manufacturing of segment which has been our inheritance since the beginning, and second is generation and change of renewable power, meaning to solar as of now.
Shri Keshav Cements crossed INR100 crore revenue milestone in financial year ’22, and which was pretty much in line of our projections and our growth trajectory. We continue to post better sales and profits compared to the previous period. Even for this quarter one, the sales has increased by 22% and achieved nearly 7% increase in actual cash profits, which is again comparing to the corresponding previous period. As we all know about the geopolitical situation of Ukraine war, suddenly there was a dent on the fuel cost, there were sudden emergency [Phonetic] crisis which was imposed on the economic and no industry who was dependent on the fuel were isolated. Based on that, there were some impact on the Company due to cost of fuel, due to which the EBITDA margin which we consistently posting between 35% to — between 33% to 35% came down to around 27%. And this, we hope will not continue as we see that the fuel cost is already showing the signs of relaxation.
Specifically regarding cement business, our this quarter has shown an average selling price increased by nearly 2% and quantity selling by around 7% more than the previous period. The price itself has not increased significantly because of still some kind of overcapacity into the industry. EBITDA margin was subdued on account of fuel prices, like explained above, but there is a robust initiative from the government to develop infrastructure. We foresee that cement will continue to be demand in future. The capacity utilization, which has seen improvement compared to previous period will continue to improve going forward.
Regarding the renewable solar power business. As discussed last time, a new 12 megawatt peak solar plant was commissioned in December 2021. This plant has already stabilized and is working as per the plan. So the average realization of sale and — average realization price and sale of solar power has increased by 8%, but the sale has increased by 245% compared to previous period of this because of the new 12 megawatt peak solar plant and this will continue to show in the future quarters, too. The power generated from the 12 megawatt plant are generally the renewable power will be a major contributor to the EBITDA in all the H1 quarters as we see today.
So, looking at the financial performance is expected to be positive as the management has opinion that fuel cost will rationalize in ensuing quarters as we are already seeing it right now, thereby contributing to better margins. Power, it will continue to be a major EBITDA contributor. Company is in the final stages of conducting a technical feasibility to optimize the cement plant and increase the capacity by nearly 3 times to 1 million tons per day. So, what we are trying to do is, the existing cement plant we will be implementing the latest technology in grinding and optimizing the kiln, thereby reducing the cost of utilization of fuel compared to now by we were saving about 20% to 22% of fuel per ton of cement, thereby increasing the EBITDA margin. This feasibility is almost at the verge of completion, we should have it anytime soon.
So, again going through the financials, sales have increased by 21% to INR32.57 crores this quarter. EBITDA is reported at INR9.37 crores. Profit before tax is INR2.96 crores, up by nearly 21% compared to previous year. The PAT has gone to INR26 crores compared to INR5.19 crores in the previous period. Now, due to a profitability achieved last year, there was a deferred tax asset, which contributed to profit after tax, thereby which all our ratios, like the debt equity, current ratio have significantly improved compared to the previous quarter in the last year.
So with this, thank you, and I would open the session for any questions anyone might have. Thank you.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question is from the line of Sachin from Savir Power and Automation Private Limited. Please go ahead.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Yeah. Good evening, sir. This is Sachin Shetty here. Sir, my question is related to revenue, last quarter our revenue was INR36 crore and this quarter our revenue is INR32 crore. So, I just wanted to know so sales have — here the sales have declined quietly around 10% to 15%, so what is the reason, sir?
Venkatesh Katwa — Chairman
So cement is typically being a cyclical industry, you’d see that quarter — Q4 results are always on the higher side compared to Q1. Typically, Q4 always has a largest percentage of sales, pretty much because the March ending, there is pressure for the government to complete the projects and lot of deadlines which is why we see a huge sales during that period. So, I thought comparing it with the corresponding quarter of the previous period would do justice. And if we look at that, we have increased the sales by about 22%. And if we continue to keep this ratio of increment, it will start — in the ensuring quarters it will show a better sales compared to the previous quarters.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Okay. Thank you, sir. Sir, my next question is the raw material cost have significantly increased, last quarter, it was INR15 crore, now it is INR20 crore. So, how do you see next quarter, sir, next upcoming quarters that this raw material prices will be stabilized going forward due to fuel prices or how — what do you see in next upcoming quarters?
Venkatesh Katwa — Chairman
Yes, like we discussed, the fuel costs typically increased by almost 2.5 times. Even though Company shifted from Southern African coal to pet coke, pet coke is compared to lesser cost compared to coal. In the first quarter, we completely utilized pet coke. If we had — still coal is almost 1.5 times to 2 times expensive compared to pet coke. But what happened on absolute terms, the cost of pet coke also rose to a level of what it used to be of coal earlier, which is why our EBITDA margin dipped, but in ensuring quarters, with Ukraine war slowing down on the impact, we have already seen the price being rationalized since this month onwards. So, we hope that this month and ensuing quarters the fuel price will start going down as expected. And we will come back to realizing the similar EBITDA what we have done in the past.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Okay. And sir, depreciation is, I think we know capex — capitalized one solar project, that’s why the depreciation is showing INR3 crore. So next quarter I feel it will be [Indecipherable], sir?
Venkatesh Katwa — Chairman
No. Come again with the question?
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Depreciation and amortization expected INR3.18 crore. So this is because of we have capitalized one solar power plant of INR45 crore, right?
Venkatesh Katwa — Chairman
Correct.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
So, next quarter also it will be the same?
Venkatesh Katwa — Chairman
This is going to be almost similar before next fiscal start hitting down. Yes, we have capitalized the solar or the 12 megawatt power plant which we have set up, the depreciation has started from the first quarter itself. Yes, eventually it will start slowing down, you’re right.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
So, last month you announced some capex of 1 million ton. So, what is that exactly — how much capex we are doing for this cement?
Venkatesh Katwa — Chairman
So, right now we are at 0.35 million tons per annum or about 1,100 tons per day capacity plant. So, what we are trying to achieve is, by optimizing the kiln, basically our whole attention is to optimize the kiln operations. The optimization of kiln operation means, we will be constructing new tower and certain equipment by which the existing kiln itself will start giving about 10% to 20% more clinker but of the highest quality with the best chemical structure what we look at. With that, we will be adding the additives like slag and fly ash. Currently, we are not able to add beyond 30%, but with the new technology we should be able to add 50% to 60%, by which what is going to happen is, the total grinding capacity will increase from current 1,100 tons to almost 2,800, 2,900 tons.
So, basic information we have already received, the project cost is about INR110 crores, but we are yet to receive the finalization with all the details. Hopefully, we are expected to receive by next month. And we should come back with the actual project cost and what it looks like. Now, with this INR100 crore — about INR100 crore investment, we are expecting an EBITDA — additional EBITDA only from this expanded capacity to INR50 crores to INR60 crores. So — and this is a good juncture for us to look at this kind of optimization because we’re not going to buy the land. We already have the clearance from the government, plus certain equipment when we had done the expansion in 2018, the equipment were put, considering this future expansion in mind. So, INR100 crores is almost you can say what INR2,000 per capital cost is much lesser compared to about INR8,000 per metric ton what is being established for cement plants. So, yes, we are looking at it right now. And hopefully in couple of months we will be coming back with actual figures and facts on how this project is going to be implemented.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
How much is cleared from this capex? If you finalize this capex, we have INR100 crore. So how much time is required to complete?
Venkatesh Katwa — Chairman
Okay. For some reason I’m not able to listen clearly. Are you asking how much more debtor we’re going to take?
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Yeah. So, my question is to you, so once we finalize that we have to go ahead for the capex, in that case how much time — leading time is required to complete that capex? That INR100 crore capex, how much time is required to complete?
Venkatesh Katwa — Chairman
Sure. So, typically, we would say not more than — the earliest could be two quarters, the latest could be three quarters. So within nine months, from the first digging to first bag coming out of the packing machine, it could take maximum nine months.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Nine months. Okay. And the EBITDA of this, asset to turn an EBITDA is around INR50 crore to INR60 crore is [Speech Overlap]?
Venkatesh Katwa — Chairman
Yes, that is the additional EBITDA is what we are targeting based on the savings what we are getting. So what is going to happen is, your fuel costs you save about 20%, 25% in quantity, and then you save about 20% in power. So whatever is there in the power you’re going to sell it outside. So both the savings together, your EBITDA margin per ton is increasing compared to current. So with that increase, then you can realistically expect a higher EBITDA for cement DBD [Phonetic]. That is the whole idea behind — arithmetic behind the optimization expansion of the cement plant.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Okay. Sir, approximate PAT how much it will be post expansion, EBITDA is INR50 crore, INR60 crore and PAT something INR40 crore, INR45 crore?
Venkatesh Katwa — Chairman
PAT, did you say PAT?
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Yeah.
Venkatesh Katwa — Chairman
No, I didn’t specifically calculate the PAT but yes, it could be around in that region only, INR40 crores to INR50 crores.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Okay. So I’ll come in the queue. Thank you for answering my question.
Venkatesh Katwa — Chairman
Thank you, Sachin.
Operator
Thank you. The next question is from the line of Apoorva Raj [Phonetic] from APV Raj [Phonetic]. Please go ahead.
Unidentified Participant — — Analyst
Hello?
Venkatesh Katwa — Chairman
Yeah. Good afternoon.
Unidentified Participant — — Analyst
Yeah. Good afternoon. My question was, cement industry there are giants, all big entities, big name, big brands. So how are we able to manage competition or what is something we have that we are competing with them and also expanding and growing?
Venkatesh Katwa — Chairman
Definitely. So Raj there is one — couple of advantages what I can list out, one is the location advantage. So, we are located in the North Karnataka region, where there are no major cement plants, other than a couple of them all the cement plants in Karnataka most of the major plants are in Gulbarga region. So, for them to come to our area, cement being a bulk product has a huge logistic disadvantage. So, the location advantage is one thing which we are thriving on. Secondly, what we are doing is the management is continuously focusing on investing in technology. So, with this new capex what we are contemplating, it will have one of the best technologies available right now, almost equivalent to what all the major plants doing by which we are expecting a much higher quality of clinker. Higher quality of clinker, obviously, means better — we can go for better additives, increasing the capacity. So, cost of cement production will go down drastically. And apart from that, we already have an established brand name. With that, we have a good indication that we will continue to grow. It should not be as a challenge as — we would have been a challenge if we had a lot of major plants around us. So that location advantage no one is going to take away from us.
Unidentified Participant — — Analyst
Yeah. So, basically one of the biggest cost for the cement companies are transportation, which is also an advantage for you?
Venkatesh Katwa — Chairman
Correct.
Unidentified Participant — — Analyst
So, sir, how much is the percentage of exactly your transportation costs because fuel costs have gone up drastically, and it has impacted transportation costs, especially products which has a higher percentage of transportation cost, so how it has impacted?
Venkatesh Katwa — Chairman
So typically, what we’re doing is, we are selling the mix of x plant and also — and we don’t typically have CNF godowns like what major plants have. Most of our cement directly goes from a cement plant to the dealer or the authorized dealer. So, logistic cost to the most extent is borne by the dealer itself, unless in some cases where we have do it but of course, that cost is recovered from him. So we keep our logistics costs at the minimum by making almost all the sales that we see is x works basis as of now, x works and x tile basis.
Unidentified Participant — — Analyst
Okay. And sir, do we have any plan to go on a more and more value-added products like cement, then ready mix and then again a more better and updated technologically improved value-added product something like? So in your value chain, I mean, where you want to go back this could be nearest from where value chain till now — in the value chain till now we are here and next target is to achieve that level in terms of product?
Venkatesh Katwa — Chairman
Sure. So, typically as of now the management is focused on the capex and reduction of the cost. So, once that is done, there are certain few other things which are within the sight of the management, like the RMC, like cement boards and panels, like 2D and 3D construction. But this is something which we’re going to look at after the capex is completed and we are stabilized on that. And those kinds of industries, what I’m talking about are purely service-oriented, which the major cost comes from the cement itself. So, we will be working on that direction eventually. But yes, these are some long-term plans which Company has already contemplated to look at.
Unidentified Participant — — Analyst
And ready mix and all you already have?
Venkatesh Katwa — Chairman
Again, what?
Unidentified Participant — — Analyst
Ready mix and all you already have it?
Venkatesh Katwa — Chairman
No, no we do not have ready mix as of now. But that is one area which we will look into the moment we are done with the capex or we are almost completing with the capex plans.
Unidentified Participant — — Analyst
Okay. So already [Speech Overlap]
Venkatesh Katwa — Chairman
Eventually what we want to do is, we want to utilize our entire cement for creating the product itself as opposed to selling the cement itself. The product will have a better margins and they are generally lower in taxes that is going to definitely help us, contribute better EBITDA compared to selling cement directly.
Unidentified Participant — — Analyst
Okay. Okay. Thank you very much, sir. That’s all from my side.
Venkatesh Katwa — Chairman
Thank you, Mr. Raj.
Operator
Thank you. [Operator Instructions] The next question is from the line of Sandeep Mane [Phonetic], an individual investor. Please go ahead.
Sandeep Mane — — Analyst
Hello? Hello? Good evening.
Venkatesh Katwa — Chairman
Go ahead. Please go ahead, Sandeep ji.
Sandeep Mane — — Analyst
Sir, FY ’22 witnessed a rise in utilization level to 63%, is it?
Venkatesh Katwa — Chairman
Come again, utilization is what?
Sandeep Mane — — Analyst
FY ’22 witnessed a rise in utilization level to 63%.
Venkatesh Katwa — Chairman
Correct.
Sandeep Mane — — Analyst
Yeah. So, my question is, sir, can it sustain these levels or we can see more increment from the earlier?
Venkatesh Katwa — Chairman
Yes, definitely, Sandeep ji. The first quarter we already achieved 68%. And if you look at the industry average being about 80%, so we are pretty sure we should reach 80% in next three or four quarters. But that being said, basically what happened was till 2018, our capacity was one-third of what it was right now. And we are reaching almost 100% capacity then. So, in last three to four years, our capacity utilization actually increased from almost 40% to 63%. So, this quarter, we clocked about 80 — 68% and we will continue to grow based on the conditions of industry.
Sandeep Mane — — Analyst
Okay. My next question is, sir, long term borrowings are increasing and there are no provision made. Is there any plan to reduce or restructure debt in upcoming quarter or years?
Venkatesh Katwa — Chairman
Yes, most significant portion of the long-term borrowing comes from the solar capacity, that is because solar is a very high captive — very high capital cost industry. Now, what is going to happen is, since solar also is contributing the highest EBITDA, it is taking care by itself. And this high debt is replacing the cost of electricity for us. So, in a way, even though it appears to be a very high capital cost, but our EBITDA is there to support it by nearly about 2 times to 3 times.
Sandeep Mane — — Analyst
Okay. Sir, one more question. Since the top clients contribution has increased to around 70%. So, how certain are we to get the order in the long terms?
Venkatesh Katwa — Chairman
So top line to 70%, can you clarify the question, please?
Sandeep Mane — — Analyst
Sir, since the top client contribution has increased to around 70%. Then how certain are we to get the order in the long term?
Venkatesh Katwa — Chairman
Okay. I am still little confused. Okay. Let me figure out the question. So, where did you see that 70% actually coming from?
Sandeep Mane — — Analyst
Sir, contribution of clients, sir, top clients.
Venkatesh Katwa — Chairman
All right. Clients, sorry, I didn’t hear that. Okay. Top line I heard. So you are asking me as contribution of the top customer 70%, right?
Sandeep Mane — — Analyst
Yes, yes, yes.
Venkatesh Katwa — Chairman
So, we are planning to get it done and it is kind of coming down anyway. As we spread around, as we get into more of government-related contracts, we will start being to be less dependent on the top level customers. And, of course, when we go deeper into the villages, we also get a better realization and better reach. So, yes, the management is continuously working towards achieving those levels.
Sandeep Mane — — Analyst
Okay.
Venkatesh Katwa — Chairman
Yeah. I’m sorry, question correctly.
Sandeep Mane — — Analyst
No problem. Sir, lastly, are you planning to do capex which were rising cement?
Venkatesh Katwa — Chairman
Capex — yeah, in cement we are doing the capex, right?
Sandeep Mane — — Analyst
Yeah.
Venkatesh Katwa — Chairman
Yes, typically, cement, we are looking to do the capex and they’re almost closing on the feasibility of the capex. So, like discussed earlier, the capex will be about INR100 crores to INR120 crores and EBITDA contribution is going to go about INR50 crores for the extended, plus existing EBITDA of what we are achieving now. So, we are targeting almost EBITDA of nearly INR90 crores to INR100 crores once the capex is complete and we operate at about 80% capacity.
Sandeep Mane — — Analyst
Okay. Thank you, sir.
Venkatesh Katwa — Chairman
Sure, sure, Sandeep ji. Yeah. Thanks.
Operator
Thank you. The next question is from the line of Avinash Gorakshakar from ProfitMart Securities. Please go ahead.
Avinash Gorakshakar — ProfitMart Securities Pvt. Ltd. — Analyst
Yeah. Sir, I’ve got three questions. First is, what is the outlook on cement prices now going forward?
And secondly, you mentioned about your capex, INR120-odd crores. Could you give us some idea about how much of it is going to be funded from internal accruals? How much of it is going to come from debt?
And the third question is, on a very broader level, now since the infrastructure both has picked up, we have seen that corporate capex activity has started increasing. Could you share with us what is your medium term view on the cement sector specifically, as far as your side — your location side is concerned, considering that you’re one of the few players who have got capacities here? So, in terms of demand growth outlook, what kind of outlook do you perceive?
Venkatesh Katwa — Chairman
Sure, Avinash ji. Good afternoon to you. So, let’s look at the cement outlook itself for this quarter and the remainder of the year. So, this quarter two typically being a monsoon season, very cyclical and as expected, you will see our production and reserves in line typically all the major brands. So there won’t be much significant change in the quarter two. But again, as we know that India is still one of the lowest per capita consumer of the cement and that the central government is so boosted up, there is a robust growth expected in building up the infrastructure, which will obviously mean that the outlook is going to be on the brighter side. And this, we have consistently seen in the last couple of years, too. So, as we keep moving towards direction of better infrastructure, I feel that cement is going to be product with the very bright future.
And regarding the capex and the means of finance, typically, as of now we haven’t decided on the exact mean of finance, but in the past what we have done is, the promoters have invested the equity in the form of unsecured loans and then the remainder we have taken debt from the bank. So, either we will stick to same or we may do some placements to get some equity or a mix of both. So, that is what will happen once we finalize on the feasibility of the project itself.
And the general view on cement demand, not now and the future is, like I said, amongst our countries, India is still one of the lowest consumers of cement. I don’t think so, other than Pakistan, we are still rallying at behind young countries like Sri Lanka and Bangladesh, even Nepal is ahead of us in per capita consumption. So, we definitely have a long way to go, as per Cement Research Institute by — from 2023 to 2030 Cement CAGR expected is around 11% to 14%. And if that is conservatively achieved, we will need not less than about 800 million tons to 900 million tons cement capacity in India by 2029 and ’30. Our current capacity — installed capacity is around 500 million tons and utilization is about 375 million tons. This is as per the statistics provided by the CMA or online data what you look at. So, yes, I see this robust growth. Still we are yet to come to a level where infrastructure has to be equivalent to a lot of other Asian countries. And I feel cement is the only product which is not replaceable right now, and will continue to grow.
And, of course, in my region where we are operating at, there are no major capacities, so that locational benefit will continue to accrue on us. One of the reason is, there is no huge limestone deposits available there in our region, which will attract bigger players or large capacity players, which of course, means for 1 million tons or 2 million tons, it is okay, but if you have to think about 20 million tons or 30 million tons, which large corporates want to look at that advantage, location advantage will continue to accrue on our business.
So, I hope I answered your question, did I miss something?
Avinash Gorakshakar — ProfitMart Securities Pvt. Ltd. — Analyst
Yeah. I think very well articulated, sir. Thank you.
Operator
Thank you. The next question is from the line of Nilesh Karani from Magnum Equity Broking Limited. Please go ahead.
Nilesh Karani — Magnum Equity Broking Limited — Analyst
Yeah. Good afternoon, sir.
Venkatesh Katwa — Chairman
Good afternoon, Nilesh ji.
Nilesh Karani — Magnum Equity Broking Limited — Analyst
Yeah. I’m audible? Yes. Yeah. So, just to understand, see our solar power basically you said 12 megawatts, if I understood correctly?
Venkatesh Katwa — Chairman
12 megawatt peak is what we mentioned, it is like AC capacity is 10 megawatt, peak capacity is 12 megawatt. We usually do 12 megawatt peak DC investment goes for.
Nilesh Karani — Magnum Equity Broking Limited — Analyst
Correct. So basically, the whole 10 megawatt basically do you sell out or you utilize it for captive consumption?
Venkatesh Katwa — Chairman
So, yeah, to answer that question, what I’ll do is, I’ll go couple of steps back. Now, the first plant that we have is, 20 megawatt AC and 25 megawatt DC. And the next power plant which we commission in December was 10 megawatt AC and 12 megawatt peak DC. So, I’ll use this term interrelating or I’ll call it first one as first solar plant and second one as second solar plant. So, what happened was, when we commissioned first solar one plant of 20 megawatt AC capacity, government had given us a host of incentives in the form of when the power is distributed, there are losses, there are charges, all of this and subsidy charges, all those charges are waived off for 10 years. Since we commissioned itself on March 31, 2018, which was the last day for us to accrue the benefit. So, we will continue to accrue the benefit till ’28-’29, still five and a half years to go with. But this is even if you sell the power or even consume it, by which what management thought was, it was not a good idea to consume power from this plant, because this plant has host of incentives, so it is better to sell power from this plant to continue to get the benefits, which is why we commissioned another solar plant of 12 megawatt peak. The 12 megawatts peak plant does not have any incentives like the first plant, but incentives are there if you do captive consumption. If you want to sell it, then all the charges, the losses will be impacted on the plant. So what we will do, we are consuming power from the second power plant and we’re selling the power from the first power plant, for the first quarter present there are no other charges, we are realizing the fullest benefit. In fact, my last year average realization of the price was INR6.10 per unit last year in this quarter is about INR6.70 almost. So, yes, as of now the capacity expansion solar has been a great contributor towards EBITDA.
Nilesh Karani — Magnum Equity Broking Limited — Analyst
And sir, basically, when — how do you see this part of your work is still panning out like once you are done with your, this thing, first and this already the PPA and all have been done with that or you supplied to the bid?
Venkatesh Katwa — Chairman
Did you ask me about the PPA, right?
Nilesh Karani — Magnum Equity Broking Limited — Analyst
Yeah.
Venkatesh Katwa — Chairman
So, what we have done is, we have not signed a PPA with the government at all. We are selling to private parties. When you set up the power plant first it was mentioned only for as captive use, eventually we took permission from the government to sell the power to third-party. And all our customers are — in fact, the demand for power is so high that we are actually rationing to the customers and taking the best price available for that particular month.
Nilesh Karani — Magnum Equity Broking Limited — Analyst
Okay. So, basically it is a win-win venture for the Company as well as procure for the buyers who are getting the power, correct?
Venkatesh Katwa — Chairman
Absolutely. In fact, even after we do the expansion, which I answered to the first question, our power consumption per unit will go down, which will — what will happen is, even though our capacity will increase by nearly 3 times, our power requirement will be little less than 2 times a week, that is because the equipment what we will be adding will be the latest least power consuming equipment.
Nilesh Karani — Magnum Equity Broking Limited — Analyst
Okay. That’s it. Thank you so much.
Venkatesh Katwa — Chairman
Thank you, Nilesh ji.
Operator
Thank you. The next question is from the line of Apurva Mehta [Phonetic], an individual investor. Please go ahead.
Apurva Mehta — — Analyst
Yeah. Hello. Good noon. My question is, what is your current capacity utilization for Q1?
Venkatesh Katwa — Chairman
The quarter one capacity utilization is about 68% for cement.
Apurva Mehta — — Analyst
Okay. And what was the total sale in terms of volumes?
Venkatesh Katwa — Chairman
Come again, I couldn’t get the question, what is the…
Apurva Mehta — — Analyst
What was the total sales in terms of volumes?
Venkatesh Katwa — Chairman
In volumes, the quarter one was about 61,000 tons for quarter one cement sales, 61,000 metric tons.
Apurva Mehta — — Analyst
Okay. And what is the average cost per kg?
Venkatesh Katwa — Chairman
Our net average realized price is INR4,115 for quarter one compared to previous quarter of INR4,014. So, there is only about 2% jump in the price realization we have got, but in quantity wise we are increased by 7%.
Apurva Mehta — — Analyst
Okay. Okay. Yeah. Yeah. Thank you.
Venkatesh Katwa — Chairman
Sure, sure.
Operator
Thank you. The next question is from the line of Vaibhav Sharma from Cogent Research [Phonetic]. Please go ahead.
Vaibhav Sharma — Cogent Research — Analyst
Thank you. First of all, congratulations for a good set of numbers. And I wanted to ask two questions regarding capex. So what if we’ll do the capex, what will be the lead time to complete the whole process from the point we decide?
Second question is, what will be the incremental revenue that we will generate from this capex?
Venkatesh Katwa — Chairman
Okay. So, the first question, did you ask me the cost of the capex and the time it will take to complete the project, is it?
Vaibhav Sharma — Cogent Research — Analyst
Correct. Correct, sir.
Venkatesh Katwa — Chairman
So, Vaibhav ji, thanks a lot for your comments. But for capex, like we said, the technical feasibility study is almost complete. So indicative figures about INR120 crores investment is what we are seeing. With this INR120 crores, our capacity will increase by almost 3 times. Whereas the capex cost of the industry is around INR8,000 to INR9,000 per metric ton, we are completing it in less than, I think, INR2,000 or INR3,000 per metric ton. That is mainly because we are not adding most of the equipments [Technical Issues] we’re only optimizing the plant. So capex, the typical timeline from the day we take the first dig to the first bag will come out, we expect about three quarters, within three quarters is what we reasonably expect.
And then the incremental benefits are going to be like this. Since this project is done to reduce the usage of fuel and [Technical Issues] electricity per unit of cement. EBITDA margin will drastically increase compared to currently, we will be expecting about 30% to 40% increase in EBITDA per metric ton compared to [Technical Issues]. And of course, with that contribution, since the capital cost is lesser, we are hoping to contribute around INR50 crore to INR60 crore worth of EBITDA only on the incremental capacity running at about 80% capacity. So, this project is something which we should have done long time back, but I guess it is never too late and now we will be implementing it once the technical feasibility studies are complete.
Vaibhav Sharma — Cogent Research — Analyst
Okay. That’s what I prefer [Phonetic]. So, another thing I just wanted to understand, have you started using pet coke in I think last quarter, from Q4 FY ’22 and this quarter you have used. So we are fully shifted to pet coke or still we are using traditional coal also?
Venkatesh Katwa — Chairman
No, we have completely shifted to pet coke. But right now what is happening only to fire the kiln to begin with we still are working, utilizing coal but that is less than 5%. Overall, they have already shifted to pet coke. The reason, in spite of that the fuel cost, the raw material everything increases because the cost of fuel itself has increased on absolute levels on both the sides, be it coal or pet coke. So, let me, for example, the cost of per kilo calorie of pet coke was about INR1.10 in the quarter one of FY ’22 and coal was around INR1.70 in quarter one FY ’22 so this has increased to — from INR1.10 it has increased to INR2.35 for pet coke and almost INR4 for coal. So, if you look at it more into pet coke we could not get the benefit because there is general increase in the fuel cost due to ongoing geopolitical situation like Ukraine war [Speech Overlap]
Vaibhav Sharma — Cogent Research — Analyst
Yeah. So that’s why I asked the question, because I’m seeing the number from last quarter in this. So, I doesn’t see much difference in the raw material prices so that is fair. And what will be the average selling price per material, sir, I think if you had answered but I missed out on that?
Venkatesh Katwa — Chairman
Sure, my first quarter was about INR4,115.
Vaibhav Sharma — Cogent Research — Analyst
INR4,115. And what was for the full-year of FY ’22?
Venkatesh Katwa — Chairman
FY ’22 around INR4,073.
Vaibhav Sharma — Cogent Research — Analyst
Okay. So, is there any scope of more improvement in the prices for this year?
Venkatesh Katwa — Chairman
Yes, now that the coal prices have increased, most of the cement plants have not responded to the increase as of now because of the subdued market. So, typically price rise do happen in Q3 and Q4 particularly. So, once [Technical Issues] it will continue to remain that level eventually. So, yes, there will be a price increase, but of course, not immediately. We are expecting a significant price increase from Q3 onwards.
Vaibhav Sharma — Cogent Research — Analyst
Okay. And sir, one last question on the distribution front, I think you were answering to some earlier participant, you told, so you were increasing your presence in more and more village. So can you just give a ballpark number currently in how many villages you are currently supplying? And what is our — basically what is our reach in terms of area in which we — I think we are majorly into Coastal Karnataka and some part of Maharashtra and Kerala. So, how we are seeing this shaping up if we are increasing our reach, so will we be increasing in the same region or any other regions?
Venkatesh Katwa — Chairman
Sure. The cement, of course, is characterized with a very high logistic cost. So, what [Speech Overlap] managed to keep the market within 200 kilometers. The more nearer you sell the better realization you can expect. So, what we are trying to do at least is Kerala market this quarter we haven’t sold anything. So, we left out Kerala market because of the high logistic cost, we are reduced Coastal also. Most of the sales what you see right now is coming from the nearer regions. But we are already continuing — and we’ll continue working on to reach through the villages. Number of villages, I may not have the exact count, but pretty much the regions we are going to rural is because tendency is — rural advantage is, you get a better price realization, the disadvantage is the quantity, the amount of service and of course, the lesser quantity and better pricing is what is going to happen. And for our cement where variable cost is very high, margins do play an important role. So, we will be focusing on the village by which we will be less dependent on the top five customers.
Vaibhav Sharma — Cogent Research — Analyst
Okay. Okay. So, it will be mostly through your existing dealer distributor network or any new dealer distributor you will be adding or directly approaching the retailer?
Venkatesh Katwa — Chairman
So what we will do is, we will establish new dealerships also, plus if there’s an existing dealer who’s [Indecipherable] in rural market, we help them to sell it more over there. So there is going to be a mix of both.
Vaibhav Sharma — Cogent Research — Analyst
Okay, sir. Thank you. That’s it from my side.
Venkatesh Katwa — Chairman
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Sachin from Savir Power and Automation Private Limited. Please go ahead.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Yeah. Thanks for the opportunity. Sir, my question is on the solar revenue, last quarter, it was INR7.15 crore and this quarter something INR5.67 crore, it has reduced drastically. As far as segment results, profitability has also reduced, last quarter INR5.80 crore and this quarter INR1.50 crore. So what is the reason for this?
Venkatesh Katwa — Chairman
Okay. No, you are talking about power, right, segment results power wise?
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Yeah. Solar power generation supply, so segment wise and revenue wise, last quarter it was INR7.15 crore and this quarter it is INR5.67 crore.
Venkatesh Katwa — Chairman
Okay. Now, typically first comparing with the previous preceding quarter like 30th June, there is a significant increase of 250% in June 30th, 2021, it was INR1.61 crores and now it is higher. But if you compare it with the previous quarter, it is mainly because, last quarter typically what happens in last quarter of every year, all the industries have to meet up their renewable power obligations, which is when we tend to get a better pricing also. So, what we do is, right now, we keep whatever excess power only if we get certain price we sell it, otherwise, we just keep it in the closing stock. At that time, typically we tend to sell at the higher level. So, that probably impact would have this year, too, that cyclical impact. So, this fourth quarter also should be a similar jump like how we seen in the previous quarters or previous year quarters.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Okay. And the second question, how much are our long term debts and short term debts, currently?
Venkatesh Katwa — Chairman
See, the total outstanding liabilities is around INR165 crores, approximation INR165 crores, and our short term debt, I call it, outside liabilities as of now is on the balance sheet is about INR24 crores, but if you negate the cash balances in the bank itself, it is about INR18 crores to INR19 crores is what current liabilities will be, this is outside liabilities what we call is the overdraft limits. Apart from that, the term loan maturities will — is what is showing up on the balance sheet which is around INR14 crores.
Long term debt, we are continually repaying on time every time. So, this time the long term debt increase solely for the new solar project which we commissioned last year. So, this will continue to keep going down quarter-on-quarter and year-on-year. Till date, we have been repaying every time correctly and that trend will obviously continue.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Yeah. Having that any repayments for this long term debts, so within six months, last year also we have done something INR18 crore. So before start the capex, before kick of the capex spends, is there any plan to repayment of any loans or long term debt?
Venkatesh Katwa — Chairman
No, apart from internal generation of the funds. There is no direct plan to secure funds from somewhere else and replace it as of now. Our management think that whatever loan what we have secured from the bank will be repaid out of the profits only.
And did you mention about the financial costs for last year and this quarter?
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Financial cost?
Venkatesh Katwa — Chairman
So I thought you asked me a question regarding — you also had a question regarding financial cost, right?
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
No, sir. Not financial cost [Speech Overlap]. Regarding repayment, has there any to do any repayment of this coming six months [Indecipherable]?
Venkatesh Katwa — Chairman
Nothing more than what we have a yearly obligation to repay with the banks.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Okay. Now for the capex, we are now INR100 crore, so we are utilizing for the capex and that INR100 crore you told that will be from secured loans from the promoter?
Venkatesh Katwa — Chairman
Yes, we haven’t finalized that. So, there are two options what we have, either we go for a private placement and then the debt or contribute to private placement or through the unsecured debt what the promoters can bring in. So it is going to be a mix of all these things depending on how the management takes a decision on. Since we don’t have the feasibility report and the project cost entirely at hand, it will be premature to decide what would be our means of finance.
Sachin Shetty — Savir Power and Automation Private Limited — Analyst
Okay, sir. That’s it from my side. Thank you.
Venkatesh Katwa — Chairman
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Ms. Supriya Madye for her closing comments.
Supriya Madye — Investor Relations, Kirin Advisors Private Limited
Hello. I thank you, Mr. Venkatesh Katwa for his remark, and sharing his insight on the Company, and everyone for joining the conference call. If you have any queries, you can write to us at info@kirinadvisors.com. Thank you.
Venkatesh Katwa — Chairman
Thank you, everyone.
Operator
[Operator Closing Remarks]