SHRI KESHAV CEMENTS AND INFRA LIMITED (BSE: 530977) Q4 2025 Earnings Call dated Jun. 02, 2025
Corporate Participants:
Unidentified Speaker
Venkatesh H. Katwa — Chairman
Supriya Madye — Investor Relations, Kirin Advisors Private Limited
Venkatesh Katwa — Chairman
Analysts:
Unidentified Participant
Bharat Gupta — Analyst
Presentation:
operator
Sat.
operator
Foreign.
operator
Ladies and gentlemen, good day and welcome to the Sri Keshav cements and Infra Limited Q4, FY25 and FY25 results conference call hosted by Kirin Advisors Pvt LTD. 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 the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshal Ganciani. Thank you. And over to you sir.
Unidentified Participant
Yeah. Thank you so much. On behalf of Green Advisors, I welcome you all on the content of Ste Kaser Cement and Infra Limited for Q4 effort. On file from the management team we have Mr. Venkatesh Satva Chairman, Mr. Vilas Satwa, Managing Director. Now I hand over the call to Mr. Venkatesh sir for the opening remarks. Over to you Sir.
Venkatesh H. Katwa — Chairman
Thank you, Mr. Harshal. Good evening everyone and welcome to Sri Case of Cement and Infra Limited’s Q4 and FY25 earnings call. I really and sincerely appreciate your time and interest in joining us today. See Cases Cement and Infra Limited which was formerly known as Karpa UDHIV Limited is engaged in manufacture of cement and generation and distribution of solar power primarily in the state of Karnataka. Our cement plants are situated in the Bagalkot district while our solar power operations are located in copper. Our distribution network spans North Karnataka, Coastal Karnataka, Goa and parts of Maharashtra. Supported by over 350 cement distributors and 600 detailed touch points and over 14 solar power consumers.
We have secured a credit rate upgrade for our long term bank facilities advancing from IVR BB positive to IVR BB B minus with a stable outlook and on the short term facilities received a short term rating of IVR A3. This year marked the completion of our cement plant of 1 million ton capacity with the kiln commissioning in Q4 and also an addition of 3 megawatt of renewable power making it a total capacity of 40 megawatt. Now let me take you through the performance of FY25. FY25 was a year of recalibration amid macroeconomic and sectoral headwinds.
While total income for the year remains stable at 124.6 crores, our EBITDA stood at 25.17 crore maintaining a healthy margin of 20.73%. Despite revenue pressures driven by subdued infrastructure demand and policy uncertainties around renewables. Our emphasis on the Cost efficiency and internal controls helped us preserve the profitability. Looking forward to FY26, we remain very optimistic. Our newly commissioned kiln began operations in March 2025 which will support our capacity expansion to 1 million ton per. The project is expected to unlock scale and scale benefits, optimize energy and fuel consumption and position us for the higher market share and improved margins.
Additionally, the increased allocation towards public infrastructure and strong real estate momentum are likely to drive demand for cement in our key markets. Our strategic roadmap continues to prioritize capacity optimization, green energy integration, product mix enrichment and expansion to new geographies, particularly high growth urban centers like Pune, Bangalore and Kerala. So before I hand over the detailed financial discussion, I want to thank you, our stakeholders, partners, customers and employees for their continued trust and commitment. Your support remains the foundation of our progress. With this I’m very pleased to open the floor for the questions. Thank you once again all of you for being with us today and I am open for the questions now.
Thank you.
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 touch tone 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, we will wait for a moment while the question queue assembles. The first question is from the line of Bharat Gupta from Fair Value Capital. Please go ahead.
Unidentified Participant
Thanks so much for taking my question. Sir, I have a couple of questions. So first in regard to the price realization, so can you provide some colors what has been the realization trend during the quarter four and what’s the trend currently?
Venkatesh H. Katwa
Sure. So if I do some comparison about the naked cement rate which is what we use as a benchmark to understand the net realization. So compared to FY24 the net realization decreased by around 425 which is was a major impediment in achieving the EBITDA margins as well as EBITDA figures. Even the Q4 in spite of our capacity utilization reaching 92% from 79.5% in the Q4 F24 the cement price reduced by almost 11.5% and even the renewable price also reduced by 1,12%. So typically the naked relation was around 3350 in FY25 similar which is in Q4 itself.
However for there was some beginning to increase of the price by the end of March and there seem to be some better realizations going on in Q1 of this year. But then for sake of Q4, the real the NCR was pretty much low compared to the previous quarter of the previous year.
Unidentified Participant
So the current realizations are nearly the same as it was in Q4.
Venkatesh H. Katwa
The current, you may say Q1, FY26 or you’re talking about. No Q1 FY26 is better off because the price has generally increased in this out and pretty much what is happening with other plants we are selling the same boat.
Unidentified Participant
Secondly, with respect to the demand recovery. So how do you see the demand playing out currently with the early arrival of the monsoon? So do you think demand recovery can take a longer time? And also like can you just brief us about the new capacity, whether it has stabilized or not. And also with regard to the guidance which you have shared earlier with respect to FY26 and FY27. So are we sticking to it?
Venkatesh H. Katwa
So as far as demand revival, yes, there has been a strong demand revival in the Q1 itself of this year because there has been a general uptick in consumption of cement. Of course first two months, which are like April and May was, you know, pretty much in line with our targets. We increase the sales. However, the early monsoons have kind of shown a little step down on the dispatches. But we are hoping that these monsoons are going to be short lived and again before the real monsoons arrive. There should be uptick in the demand as well as dispatches.
However, even during the monsoon it is pretty much expected that the cement industry was expected to grow this year because last year there was not significant increase in demand dispatches all across India and particularly in South India. So we would, we would be able to achieve the rated 50% utilization throughout for the FY26 and we think we’re already on the course of it as of now. So yeah, this is about it.
Unidentified Participant
And with respect to the new K which we, which the project has been commissioned, I think so the plant has been stabilized. And with respect to the guidance which we shared earlier of 70 crores plus I think EBITDA for FY26, like are we sticking to it and what can be the part guidance for this fiscal year.
Venkatesh H. Katwa
So typically the guidance was based on the, you know, realization what we get if there’s a kind of relation we have got in May, if that continues to stay and if it improves, we will be on the target Regarding the PAT as well as for the EBITDA figures. However, the new kill has just commissioned by end of March. So we are going through the standard operating procedures and slowly the kill is improving its performance and as we speak we’re almost reached 77% of its rated capacity. Expect to reach the rated capacity by the end of this quarter.
So with that, you know I’m still hopeful that this year, hoping that the price continue to remain as it is, we should be able to comfortably achieve.
Unidentified Participant
The EBITDA figures and that would be like roughly can you provide a ballpark figure like what would be the range of that during this year?
Unidentified Participant
So technically what has happened in the past is whenever we have discussed the pat, you know, because of lot of index adjustments and particularly when we are investing in the huge assets like solar capital investment where there is a huge capital investment. However since it is used for captive there is an element of deferred tax which is appearing on the books. What I could give a foresight is on PBT profit before tax and with ebitda of around 70 crores we can expect the PBT around to be around 30 to 35 crores. So that’s the kind of, you know, foresight we are having for this year.
Unidentified Participant
And just a last question, what are the debt repayment plans and any capex which we are looking for doing out this year in solar as well? In solar particularly.
Venkatesh H. Katwa
So as said the discussion is being going on internally to add another 30 megawatt. But like discussed last time, you know it has not come to a final conclusion yet. And if that happens there is going to be an additional 30 megawatt adding up this financial year. But that once it is confirmed and finalized we know there is, it is going to be evolving by itself. So debt is being reduced on a consistent basis. Even last year around 26 crore it has been repaid. And if you look at the long term debt, in spite of having a new plant at, you know, in spite of having a new kill, the debt has not increased significantly.
But as we start gaining profits the first course of action is to reduce the debt as soon as possible.
Unidentified Participant
Sure sir. That’s it from my side sir, I will join back the question.
operator
Thank you, thank you, thank you very much. The next question is in the line of Abhishek Sharma, an individual investor. Please go ahead.
Unidentified Participant
Hello. Am I audible sir?
Unidentified Participant
Yes Abhishekji. Yes.
Unidentified Participant
My first question is what are your plans for further solar capacity expansion in financial and beyond?
Venkatesh H. Katwa
So company believes that, you know, since we already have a 40 megawatt and the management believes that renewable power is one of the industry which we would like to even further focus on. So like mentioned earlier, right now about 30 megawatt is on the cards and it might take a while before, you know, concluding on the project and then coming back to the investors. So for this year if everything anything has to happen regarding renewable power it is going to be addition of 30 megawatt and after that next three to five years company does have plan to increase the renewable power capacity to beyond 100 megawatt.
And that’s the timeline what we are thinking about. And regarding cement, you know as such we are going to continue with 1 billion ton and once this stabilizes there would be a possibility of further growth after a few years down the line.
Unidentified Participant
Okay, and what is the expected payback period for the kiln modernization and solar expansion investment?
Venkatesh H. Katwa
The kil modernization we are talking about between seven to eight years is a typical payback period with the kind of power and fuel savings and solar also typically about six to seven years based on current regulatory, you know, cost and the pricing available.
Unidentified Participant
And so my last question is with the total solar power installed what is the current captive consumption versus external sales ratio?
Venkatesh H. Katwa
So right now as we speak our captive consumption for this, I mean till last year it was around 40, 45% was captive consumption. This year with the 1 million ton, you know taking up to nearly 50 to 60% capacity we are hoping to achieve around you know maybe about 60, 65% of power to be utilized capitally within the existing 40 megawatt and balance will be sold. Once we reach around 80 to 85% you’ll be, you know, utilizing around 95% of our capacity, renewable power capacity.
Unidentified Participant
Okay sir, thank you.
operator
Sure, thank you very much. The next question is from the line of Hemant, an individual investor. Please go ahead. Mr. Hemnath. Please go ahead.
Unidentified Participant
Hi sir. Good evening. Good evening. First of all congratulations to you on starting the upgraded plant. So my first question is related to this tax for FY26. What will be the tax percentage for this year?
Venkatesh H. Katwa
So since we already have a lot of carry for depreciation loss in the income tax books we would be looking forward to have the you know, mat which is around 15 to 16% for next couple of years.
Unidentified Participant
And what will be the depreciation and interest amount for this year?
Venkatesh H. Katwa
So this year with the new capex the interest amount is going to be in the range of around 25 crores with the new addition of the loan and depreciation is going to be also in the range of around 18 to 20 crores.
Unidentified Participant
And what is the capacity utilization in Q1 till now for the upgraded plant?
Venkatesh H. Katwa
I’m not sure if I can give all those figures. But it is much better than Q1 of the last financial year. It has improved drastically. This price also has improved in line with our expectations. So pretty much what we are reaching, think of reaching out a target of 50% this year on overall basis. Even though we are kind of starting off ramping up slowly, we should be able to achieve about 50% capacity utilization in this financial year.
Unidentified Participant
And as we are starting to consume this solar capacity internally, are there any chances to lose the 12 to 13 customers we had till now?
Venkatesh H. Katwa
I didn’t understand the question.
Unidentified Participant
If we start consuming this solar internally so we can’t sell it to the existing customers right till the new upgradation happens. So what’s the plan to keep those 12 to 13 customers?
Venkatesh H. Katwa
So assuming that we don’t add another 30 megawatt this year. Yes. So eventually we will be starting to consume nearly 60 to 65% of our capital and still sell it 35%. And once we keep on increasing the capacity of our cement plant, the selling portion of renewable power will start reducing. But that is assuming that we don’t add 30 megawatt which is already on the cards right now.
And in any case either we sell it or consume it then basically if we have not sold it to that extent, we would have saved. In any case the EBITDA for solar specifically will continue to stay on the books
Unidentified Participant
and how much time it might take to start this 30 megawatt.
Venkatesh H. Katwa
So technically once we start the project it would take roughly around about nine months, 12 months. Okay, that’s it. From, it’s all from, from the point of getting approach all the way till the date of commissioning.
Unidentified Participant
Okay, thank you so much.
Venkatesh H. Katwa
Sure sir, thank you.
operator
Thank you very much. The next question is from the line of Aditi Royce from Patel Advisor Private Limited. Please go ahead.
Unidentified Participant
Good evening sir.
Venkatesh H. Katwa
Good evening.
Unidentified Participant
My question is with over 600 retail touch points and 350 plus distributors, what initiatives are being taken to increase market penetration in FY26?
Unidentified Participant
So as such we have drastically increased our sales and marketing team across the board in all the regions and last year itself. And we are already beginning to see that benefits accruing in this quarter. And typically company is going to work towards lot of new digital and sales marketing techniques to increase the penetration. So what I mean to say is we are looking forward to increase our market share. Plus now that we are a 1 million ton plant, we qualify for a lot of government related projects which we were not qualifying earlier. So that is going to be an added benefit and company is Already actively pursuing with you know, state government for state level projects.
And you know, as such we have already achieved some breakthrough and you know, in times to come we will start selling to the state government and the state related projects too. But the company is actually working on many other initiatives to, you know, increase the market penetration and also add to the new areas. Part of better areas like Pune and Bangalore if there is a need.
Unidentified Participant
Okay, so my next question is what is the company leveraging digital tools or data analytics to optimize distribution and dealer engagement?
Venkatesh H. Katwa
Are you asking me if we have a data analytics to address the sales and marketing?
Unidentified Participant
Yes sir.
Venkatesh H. Katwa
So we have our own internal, you know, statistics to know which area and what area we are covering. We are using a lot of digital analytics to see. For example, you know, we have some, some incentives for the end customers. Basically with the point system by which you know, if they order once, they’ll, they’ll keep accruing point and then with those points they can get certain benefits and gifts from the company. So that is becoming a good strategy for us because till now the incentives were only given to the dealers and retailers. But now we are reaching out to the engineers, the masons who consume our cement and they pretty much get those points.
So some of these activities are already helping us and we are seeing that increase in sales this quarter.
Unidentified Participant
Okay sir, and my next question is what proportion of revenue is expected From Solar Sales vs Cement post the shift in captive usage.
Venkatesh H. Katwa
So then with if no cap, if the more I use captive is better for me because eventually, you know, cement is the mainstay of the business. So as we keep increasing the capacity utilization, so we would be expecting eventually 95 to 96% of sales coming from cement and only the balance coming from solar. So that’s. And this year maybe it is going to be compared to last year. The cement sales percentage will increase this year because of the better bigger capacity and higher capital production. So yes, eventually solar sales is going to be extremely reduced till we add another solar power plant.
Unidentified Participant
Okay, so and my last question is, are there plans to diversify into adjustment, building materials or internal regional market?
Venkatesh H. Katwa
There are a lot of plans. We already have consultants working on what is the next best course of action? No, just that, you know, we haven’t reached a point of conclusion that we would be certain to go in that direction. But as of now, apart from renewable power, we are also thinking of rmc. With rmc, what is going to happen is when we start consuming the cement, incidentally, you know, increase in RMC would mean that we would be reaching the end customers plus the top line and will increase drastically. Plus there is going to be an addition of EBITDA margins.
We would be looking, you know, into RMC2 very soon. I think maybe another quarter or so we would have some understanding on which direction we want to go.
Unidentified Participant
Okay, so thank you sir.
operator
Thank you very much. The next question is from the line of Bhushan Singh, an individual investor. Please go ahead.
Unidentified Participant
Yeah, thank you so much. So sir, is the company evaluating other sources of alternative energy or waste sheet recovery to further lower energy costs?
Venkatesh H. Katwa
Thank you. So typically what we are looking right now is waste heat recovery may not be something which is urgently required for the company as of now because we having our own renewable power and production of our renewable car costs less than 1 to be 70 pais or 1 to 80 pace per unit. It may not be a pressing need for us even though there is a possibility and a scope to do it sometime in the future. But alternative fuels, yes, once the kiln stabilizes we would be looking into the, you know, the possibility of alternative fuels because this project, when it was done we had may we have made some civil provisions to utilize the alternative fuels.
Unidentified Participant
Okay. And sir, what portion of your energy cost is hedged or contractually fixed under current power purchase agreements?
Venkatesh H. Katwa
So typically our solar renewable power projects were commissioned in 2018 which had a government related incentive wherein we could sell the power to anyone without any regulatory cost. This being the case, the company thought it strategic not to sign a PPA and the reason is with the PPA we could have been bound to, the price would have been fixed and if we had signed a PPA in 2018 the price would have been around, you know, five rupees, five rupees, 10%. But today we’re selling it almost at the rate of 6 rupees because we did not sign the PPA.
So company is selling with on the basis of letter of interest from various consumers and as such we are getting a very good price as well as a very good easy sales on renewable power is concerned. So PPA is not considered this time.
Unidentified Participant
Okay sir, what is the current outstanding debt and how does the management plan to maintain a healthy debt to equity ratio post capex?
Venkatesh H. Katwa
So as such right now our debt to equity is I think less than 2. And management, the newest debt which has come up last year is because of this capex which is showing on the books. However the benefits of the debt is going to accrue this year. So as we move forward the current profitability as well as from the improved margins. We will start paying the debts as when company has some excess cash that will be generating.
Unidentified Participant
Okay, sir. Has the company encountered any regulatory or environmental hurdles during the expansion phase?
Venkatesh H. Katwa
Not at all. Because we have taken all the clearances from the, be it environmental or all the clearances before starting the project. In fact, if you look on our balance sheet, our long term borrowings have increased from 165 to 169 crores. Increase of just 4 crores. That is mainly because you know, most of significant debt has been repaid. Last year with the new debt of around 26 or maybe about 30 crores coming on the books. Last year we paid around 25, 26 crores. So net debt increase has not been very significant. Even the capacity is increased three times now.
Unidentified Participant
Okay, are there any strategic partnerships being explored to improve product reach, technology or financial strength?
Venkatesh H. Katwa
So partnerships, when we talk about partnership for sale of cement, typically not in the format like you know, we having some kind of a fixed sale agreement or something like that. But we are reaching out to institutional buyers as well as the government related projects. And we are beginning to see some kind of a success in both these regions. And you know, we are also talking to few, you know, rmc, large rnc, you know, plant chains and you know we’re beginning to have some kind of a, some progress in that. But for now we have got some breakthrough regarding government related projects.
So maybe by the end of this quarter or beginning of next quarter we should see that showing up on the books.
Unidentified Participant
Okay, thank you sir. That’s it from my side.
Venkatesh H. Katwa
Thank you Bhushanji.
operator
Thank you very much. The next question is from the line of Rhea Gandhi, an individual investor. Please go ahead.
Unidentified Participant
Hi, am I audible?
operator
Yes ma’ am.
Venkatesh H. Katwa
Yes we are.
Unidentified Participant
So how will SKCI position to benefit from the government of India’s infrastructure pipeline?
Venkatesh H. Katwa
That would be a great news because last year typically what happened was it the first quarter, it started off with elections next monsoons and third quarter, you know, government barely firming up to start the projects. So it is a fourth quarter where actually government started, you know, started involving itself into setting, you know, for the large infrastructure projects. But at that time we were not qualified because the size of our plant was not something which you know, we could pass the bar of a qualification. But now with the 1 million ton plant we would be qualified and then looking forward to venture into government related projects.
Government has got a huge push as well as rural housing and highways and other infrastructure projects. And I believe we are Already seeing that benefits in this quarter and will more likely continue in this entire year. So with this government push it is we are hoping that dispatches as well as the pricing will improve in for this financial year.
Unidentified Participant
Okay, so what macroeconomic or policy risk example coal powered or construction demand cycles could materially impact performance?
Venkatesh H. Katwa
Typically anything that see apart from monsoons which is cyclical and affects all the industries. Any act by the government wherein it is a lack of infrastructure or delay in infrastructure projects will definitely impact this industry. For now with the petroleum coke, what we are buying has shown a lot of stability in the entire last year. And it is expected to show the same stability this year. In fact the management is hoping that the price of fuel will start reducing little bit because you know a lot of alternative type fuels have emerged all across the world.
And that is most likely going to help this industry which depends significantly on fossil fuels. So apart from any increase drastically increasing the fuel fossil fuel cost or petroleum products or any delay in any infrastructure executions, I don’t see any policies other than this would impact this industry as such.
Unidentified Participant
Okay, thank you. There’s one last question from my side. As one of the few cement plants running 100% on green power, is the company exploring carbon credit monetization or esg? Link science.
Venkatesh H. Katwa
So carbon credits, you know there are certain carbon credits generated based on a renewable listing and but the monetization of that is not very significant. In fact last to last year was at least there was some better pricing. But last two years we don’t see any good pricing for carbon certificates. And we are accumulating them till we get a certain price level. Regarding ESG. Yes, once the kill stabilizers company is you know to larger part of ESG. We have already complied by being 100% renewable power compliant. But there are a few other steps which company will continue to do to focus on esg.
Unidentified Participant
Okay, thank you. That’s all from my side. Thank you so much.
Venkatesh H. Katwa
Thank you Riya.
operator
Thank you so much. The next question is from the line of Priya Jain from Green Capital, please go ahead. Priya Jain, please go ahead.
Venkatesh H. Katwa
Hello. Yes Priya, go ahead.
Unidentified Participant
Few questions with me. So what is the breakeven point in terms of capacity utilization for the newly expanded cement plant?
Venkatesh H. Katwa
So with the current pricing or breaking point will be around 37 to about 40% of capacity utilization.
Unidentified Participant
Also amid the rising demand for the real estate and infra sectors is three case of targeting any specific large scale institutional clients.
Venkatesh H. Katwa
So in general the company is approaching institutional buyers. There’s already been a Significant uptick in rural consumption of cement which is where our company is focused on. Apart from institutional buyers. We are also looking at government related projects and like mentioned earlier, we seem to have some breakthrough but we will see some benefits accruing at the end of this quarter or beginning of next quarter.
Unidentified Participant
So I have been following Srikesha point since good amount of time. When can we investor expect a positive path?
Venkatesh H. Katwa
I think this financial year should be something we should typically expect. In fact the last year also the PAC was negative squarely on account of the deferred tax liability which which otherwise you know companies making healthy cash profits because of the huge capex and you know depreciation we are losing out on pat. But this year we should be able to achieve positive definitely.
Unidentified Participant
So also are there any any updates or expectation regarding government subsidies or incentive for renewable power producers in Karnataka especially?
Venkatesh H. Katwa
No. As such right now the incentives are only applicable to the captive power generation. So which is why the company is considering to set up another 30 megawatt. Because our existing power plants do already have incentives when we sell the power. But today if we have to set up renewable power only to sell, I wouldn’t consider it a very promising industry assets with the current regulatory framework. However, you know, with the current regulations for the large scale capacity, of course there is already a scope for be it capture or you know, independent power producer to sell the power.
But as such for our existing whatever incentives we got will continue for few more years because of the time limit. And then if the 30 megawatt is materialized based on being capturing consumption, those regular exemptions for regular exemptions regulatory expenses will be will not be applicable to us.
Unidentified Participant
Any timeline for you? Would you like to code for this project completion two, three years or anything?
Venkatesh H. Katwa
No, it won’t take that long. I mean typically by the end of next quarter we should have an answer on the shape of this project. And you know if happens anything before that, we will definitely publish it. But as such it is only on discussion stage, evaluation stage and you know, economic evaluation of the plant.
Unidentified Participant
Also any expense and plans beyond the current geography.
Venkatesh H. Katwa
As such we are deeply penetrated existing geography. And like I said, you know this quarter has been fruitful in as far as dispatches are concerned. But yes, as we grow, as our plant starts to stabilize or kill stabilize every all the machinery start to stabilize. When we start getting the increased production company will look at new geographical areas bordering the existing geography area increasing geography by another 50-100 km. Probably reaching out to Pune and Bangalore with that. You know, the Consumption pattern in these areas would far outstrip our production. So yes, there is a scope for that, but we will approach it as and when our current kill stabilization takes to us to 100% level.
Unidentified Participant
We know that cement is always been a very attractive sector from investor perspective. So is there any specific strategies? We get some follows.
Venkatesh H. Katwa
So a very specific strategy, what I would say is one strategy which worked us very well is 100% renewable power. Which is we were the first plant in the entire country to do so. So that gives a huge cash generation. Because of that, even the cement was doing. With the kind of fuel consumption and power consumption only cement would have been difficult to run. But our still being 1 million ton, a small capacity, we would be more focused on penetrating deeper. Because if you’re selling close to the cement plant, your logistic costs are going to be in control and you realize better margins.
So for a small plant like ours which is located very close to, we already have a location advantage because small plant like ours, we are very close to the consuming markets. So our strategy is, you know, we are placed in such a position where in a twilight zone. We are not a small plant, not a very large plant either. But then we would be, because of the small nature of the plant, we will be excessively focusing on the local area which has got the capacity to consume the entire 1 million tons easily. In fact, the areas that we are serving, the market capacity or the market consumption in the area that we are selling is around 25 to 30 million tons.
So you know, for us it is, you know, our only focus is going to be penetrating deeper because this market has the capacity to consume this capacity.
Unidentified Participant
Good. So that’s it from my side, all of it.
Venkatesh H. Katwa
Thank you, Priyanji.
operator
Thank you very much. The next question is from the line of Uday from MK Capital. Please go ahead.
Unidentified Participant
I am audible.
operator
Yes, sir.
Venkatesh H. Katwa
Please go ahead.
Unidentified Participant
Yes. So the first one is can you please provide a timeline for achieving full operational ramp up post clean commissioning.
Venkatesh H. Katwa
So technically, I mean we are, you know, we are hoping to reach into the end of this quarter or the mid of next quarter. The rampic is, you know, ramp up is going on slowly. I mean in fact when we started we could produce only about 30, 40%. But now we reached almost 60, 65%. So the killing capacity to reach its optimum level maybe another a month or two months or so. So that’s the timeline, what our concerns are given us and we will be confident to achieve that.
Unidentified Participant
Okay, and the second is what internal KPIs or benchmarks does management track regularly to assess operational. And.
Venkatesh H. Katwa
The most important KPI that we look at is the fuel consumption, the power consumption values. And that is the major focus of the management apart from other KPIs which you know are standard in the industry. But for now, you know, fuel consumption is something which we are extremely focused on. We want to achieve the fuel consumption typically which is standard in the cement industry.
Unidentified Participant
Okay. And how has per dealer or channel retention and satisfaction been during FY20 especially at volatile pricing.
Venkatesh H. Katwa
So we could be retained, I think almost 100% of our dealers, varying few here and there who are extremely price sensitive. Like again being a small plant there are going to be certain advantages where the reach is going to be very aggressive for the existing market. And yes, typically we have been successful in retaining all our dealers. And now with this new expansion we are going up bigger network. In fact there are few dealers who are always consuming large quantities whom we were not able to approach earlier again because of the capacity and the other restrictions.
But now, you know, this gives us the benefit of approaching not only large dealers like I said earlier to institutional buyers as well as government related projects.
Unidentified Participant
Okay. I also wanted to know what is a plan maintenance schedule or CAPEX allocation for existing solar cement assets in FY26.
Venkatesh H. Katwa
So CapEx allocation for FY26, unless we come up with 30 megawatt there’s not going to be any CapEx. But if there is a CapEx, the typical project cost is going to be around 135 crores for a 30 megawatt solar plant. The entire CapEx. Yeah, sure. Please go ahead.
Unidentified Participant
Okay.
Venkatesh H. Katwa
Typically we will be approaching the bank and you know, getting that funded through a nationalized bank only.
Unidentified Participant
Okay. And is company addressing employee upskilling or recruitment to match the scale up of our new operations.
Venkatesh H. Katwa
We have hired a significant new employees for the new plant as well as two places we have hired most of the new mantle. One for the plant where we have installed new machinery, high tech equipments. And the other side is the safe executives where we have added a significant portion and and you know, added more people to the area to increase our penetration.
Unidentified Participant
Okay, that’s it from my side. Thank you for my answer.
Venkatesh H. Katwa
Thank you.
operator
Thank you very much. The next question is from the line of Bharat Gupta from Fair Value Capital. Please go ahead.
Bharat Gupta
Thanks for the follow up. Venkateshi sir, in regard to the your remarks please like with respect to breakthrough, with respect to government orders. So just wanted to check like how much capacity are we planning? Like I Think we will be utilizing 50% of the overall capacity. So how much we are like looking forward for booking towards the B2C side of the business in comparison to B2C side.
Venkatesh H. Katwa
B2B versus B2C. Right. So breakthrough in the sense that there is this, you know, foot in the door as such right now. So once I think so to begin with it is going to be very small and insignificant quantities, you know. But then as we progress as we see there is a possibility the share of B2B will continue to improve. In fact it is observed that the pricing given by the government is better compared to the retail pricing. So company will focus on, you know, trying to pentate drip into government related projects. So once you get a foot in the door, like I said it is not going to be very significant in the beginning.
But we’re hoping once that goes through to quarter on quarter will start increasing. Figuratively it is extremely difficult to give the percentage. All that I can, I can say is like no, it might begin with about 4 to 5% of our total care this thing and know quarter and quarterly keep increasing.
Bharat Gupta
And just to understand sir, what will be the credit terms in terms of getting out a project from the government side versus like how are our credit policies from the retail?
Venkatesh H. Katwa
So if you look at our data days it is around 16 days or so. So we have maintained a tight, you know, you know, cement plant. Typically if you look at large all other cement plants we are pretty much in line with those maybe 16 to 20 days or 30 days. With government it might be up to 30 days and you know, but then we’re getting also a better pricing. So that would be the, that that this would be pretty much what will happen in this year. Also last year our data days increased mainly because of you know, bad demand and you know, not lowering of dispatches.
But we are hoping to improve this financial year which is already seeing increased cement consumption in the market.
Bharat Gupta
And sir, if I look at the retail side, so how do we fare in pricing terms versus the likes of JK and D which are also present nearby.
Venkatesh H. Katwa
So till last year we were, I mean typically what I say and unofficial is pretty much like, you know there are couple of plants in India which are on the national level. I consider them as tier one. And then like there are a lot of other cement plants between 1 million to 10 or 15 million capacity or not on the national level but they are significantly in pockets of maybe certain regions of India. So there was a huge price arbitrage between you know, tier two and like ours earlier and as such in the beginning we don’t expect to close it because we want to market and you know, do an existence.
But eventually, you know there will be a point in time we will start getting. Our pricing will start getting close to tier two bands. I believe right now, you know the pricing difference is almost like 600 rupees per ton, 600 to 700 rupees per ton between our and tier two brands and you know maybe around, almost around thousand rupees from tier one to our brand. But that gap will start reducing, you know, as we go with higher capacity and start reaching out to bigger institutional buyers because we are able to produce the same quality and everything.
Bharat Gupta
Right. With the same quality I think. So the 600 rupees gap which is there. So I think that won’t be the case with respect to government there. The pricing will remain at par so we’ll be able to enjoy higher realization.
Venkatesh H. Katwa
We are as of now correct the kind of breakthrough we’re getting through is with the. For them the pricing is same. For us the pricing is better because it is for us going from down to up. It may not be a very good pricing for a lot of tier one brands. So there is a scope for us, for us to kind of fulfill that.
Bharat Gupta
Right answer. Just to reiterate like the numbers which you mentioned. So PBT, you are looking at near about 35 odd crores which you said in my earlier question I think.
Venkatesh H. Katwa
Yes. And sir also so typically I would assume. Yeah. With the current pricing. Come again? Sorry, come again?
Bharat Gupta
Yeah, I would just like in a way with respect to 1520% MAT rate which will be applicable to us. So I think we’ll be anyhow somehow reaching out to 30 odd cruise. But given out the current realization tree and with, with reaching out to 50% utilization.
Venkatesh H. Katwa
Yes it is possible. See the prices continue to improve the way they’re doing right now. See the biggest impact happened last year was inspect offer dispatches increased by almost by around 10 11%. I mean like we reached almost 2 like 57,000 tons dispatches last year compared to previous year of 2 lakh 46,000 we lost at around 16 to 17 crore EBITDA only because of the decrease of the price. But the projections, what we had done earlier was increasing the price by another 5% which means that almost 7 rupees per ton we lost because of non realization of the price as per the projected value.
So having said that if the projections stay at par, it is just a sudden mathematics that it will, we will Be using these kind of figures.
Bharat Gupta
With respect to prioritization over solar versus the incremental addition towards cement capacity. I think we have a kiln installed of 1.8 million tons which is a preferable thing like for the stabilization of this unit of 1 million ton. Do you have any plans like with respect to FY27 or 28 to increase the further throughput to 1.85 million tons?
Venkatesh H. Katwa
Yes, as the company continues to grow, the moment we have the stabilization cash flow generating, the next course of action is going to be addition in both renewable as well as cement. There is still a scope for us to improve the capacity in cement plant. But I think another two years it will be too early to discuss any kind of projections on that. Because our whole entire focus is to make sure that not only cement plant stabilizes our sales and everything else also stabilizes. But yes, after a couple of years when everything what we projection starts showing up, you know, cement is also going to be on expansion stage and we will continue to work on renewable power.
Plus there is going to be an RMC development too. So there are these three things are there where companies want to focus on eventually.
Bharat Gupta
Right answer. Like with respect to fundraise. So are you relating any strategy like are we further like we can do a equity dilution or that will be a preferable mood for funding out the projects going forward.
Venkatesh H. Katwa
As such, with the current project in hand, what we have, which is what we’re considering for 30 megawatt we will go entirely with, you know, funding from the banks. But yes, as we look for a much bigger expansions, you know, anything that management feels will improve the shareholders as well, we will continue to focus on that. Equal dilation is not a problem as long as it ultimately gives well to all the stakeholders.
Bharat Gupta
And any incentive which we have, sir, with respect to solar power from the state government.
Venkatesh H. Katwa
For the existing plant, yes, that also for another few years. But for the new plant for 30 megawatt, what we are planning there is no incentive if we sell the power, but it is incentivized. Or rather it’s the same incentives across India, across all the states if we consume it capitally. So the strategy would be to set up a new plant for capital consumption and existing plant relieve the capacity for selling the power where incentives apply. So we don’t have incentives directly but indirectly we’ll accrue the incentives. Because you know our strategy is to kind of build some capacity for capital consumption.
Bharat Gupta
Sure sir, the pricing trend has remained above six odd rupees for this Last fiscal year. And currently how do you see the trend in the pricing for solar?
Venkatesh H. Katwa
Last year I think so we got an average price of around 5 rupee 90 pesos or so. This year we are beginning with around 6 rupees. I mean unfortunately the price of power is being a very, very commodity where very much depend on the regulatory, you know, costs. So it looks like based on the current approvals or whatever guidelines we have we should reasonably get around 6 rupees for this financial year. Unless the because the last financial year government reduced the price of power by almost 30, 35 paisa. For instance for the industrial buyers flow whom we sell and even the commercial buyers they reduce the price by nearly 2 rupees last year.
But we commercial buyers are not our significant. In fact we had few commercial buyers. We shifted from them to again you know, industrial consumers to whom we have already, you know, signed an loi. But yes, it is typically dependent on regulatory cost and if that being stable we will continue to get six rupees this year.
Bharat Gupta
And sir, is it safe to assume that with respect to 70 crore plus EBITDA which we are projecting for this year nearly 30, 30 to 35 odd crores will be coming out from solar and remaining from the cement. So the distribution will be 50, 50 for both for this year, correct?
Venkatesh H. Katwa
Yes, yes. Typically yes.
Bharat Gupta
That’s it from my side sir, thank you so much for answering all the questions.
Venkatesh H. Katwa
Thank you Bharatji.
operator
Thank you very much. As there are no further questions from the participants I now hand the conference over to Mr. Harshal Ghanciani. Thank you. And over to you sir.
Venkatesh H. Katwa
Yes, yes, thank you. Thank you everyone for joining the conference call on Streak SF Cements and Infra Limited. If you have any queries you can write us at research. Once again, thank you for joining the Conrad Square. Thank you.
Unidentified Speaker
Thank you. Thank you everyone.
operator
Thank you very much on behalf of Kirin Advisors Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.