Star Cement Ltd (NSE: STARCEMENT) Q2 2025 Earnings Call dated Nov. 11, 2024
Corporate Participants:
Vaibhav Agarwal — Investor Relations
Tushar Bhajanka — Deputy Managing Director
Manoj Agarwal — Chief Financial Officer
Analysts:
Keshav Lahoti — Analyst
Unidentified Participant
Sahil Solanki — Analyst
Uttam Kumar Srimal — Analyst
Amit Murarka — Analyst
Shravan Shah — Analyst
Prateek Kumar — Analyst
Hemant — Analyst
Jinesh Shah — Analyst
Prachi Kadam — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Earnings Conference Call for the Quarter and Half Year Ended 30th September 2024 of Star Cement Limited hosted by PhillipCapital India Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital India Private Limited. Thank you and over to you Mr. Agarwal.
Vaibhav Agarwal — Investor Relations
Yeah. Thank you Michelle. Good evening everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q2 FY25 and H1 FY25 of Star Cement. On the call, we have with us Mr. Tushar Bhajanka our Deputy Managing Director; and Mr. Manoj Agarwal, CFO of the company. I will hand over the floor to Mr. Manoj Agarwal for his opening remarks and which will be followed by interactive Q&A. Thank you and over to you Manoj sir.
Tushar Bhajanka — Deputy Managing Director
So, good afternoon all. My name is Tushar Bhajanka and I’m the Deputy MD of Star Cement. I would like to welcome you all to the earnings call of quarter two. I have the CFO of the company with me. He will run you through the numbers of quarter two and then we can have our Q&A session. Thank you.
Manoj Agarwal — Chief Financial Officer
Hi friends. Very good afternoon. On behalf of Star Cement Limited, I welcome you all to our con-call for discussing our number of Q2 FY25 and half year end September 2024. I would like to clarify that we are discussing on the historical number and there is no invitation to invest. Having said that now I will just take you through the Q2 number followed by half-yearly numbers. Starting from clinker production during the quarter ended September 2024, we have produced 6.58 lakh tons of clinker as against 6.4 lakh tons in same quarter last year. So far as cement production is concerned we have produced 9.55 lakh tons this quarter as against 8.95 lakh tons same quarter last year.
Now I will take you through sales volume; during the quarter, we have sold 9.62 lakh tons of cement as against 8.96 lakh tons of cement in the same quarter last year. And we have also sold 0.16 lakh ton of clinker during this quarter. This is as far as cement and clinker sale is concerned. As far as geographical distribution of cement is concerned, in Northeast we have sold around 7.49 lakh tons as against 6.72 lakh tons during same quarter last year. And as far as outside Northeast cement is concerned, we have sold 2.13 lakh tons of cement this quarter as against 2.24 lakh tons same quarter last year.
In terms of blend mix, it is almost 10% of OPC and the rest is PPC. These are the quantitative number of the quarter. Now I will take you through to the financial. The total revenue figure this quarter is around INR642 crores as against INR585 crores same period last year. As far as EBITDA figure is concerned, this quarter we have done an EBITDA of around INR96 crores as against INR104 crores last year. Profit after tax is INR6 crores as against INR41 crores in same period last year.
The decrease in PAT on account of increased depreciation due to capitalization of our new 2 million ton grinding unit at Guwahati and our clinker plant in Lumshnong Meghalaya. On per ton EBITDA front it is INR995 during this quarter as against INR1,164 per ton same quarter last year. This is what our quarterly number of second quarter. The total revenue figure in the half year ended September 24 is around INR1,393 crores as against INR1,346 crores same period last year.
As far as EBITDA figure is concerned, during half year ended September ’24 we had done an EBITDA of around INR215 crores as against INR242 crores last year. PAT is INR37 crores as against INR134 crores in same period last year. The decrease on account of increased depreciation as explained earlier. On per ton EBITDA front it is INR1,007 during the half year ended September ’24 as against INR1,176 per ton same period last year. These are the quarterly and half-yearly numbers. Now I request all of you that if you have any queries, you may — can ask the same and I will request Vaibhav to moderate the query wherever it requires. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. [Operator Instructions] The first question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
I wanted to know the status of Meghalaya clinker SGST benefit have they recorded in this quarter and how much?
Tushar Bhajanka
So, for the Meghalaya Clinker plant, the GST benefit that we are supposed to get, we have recorded some part of it, but because of [Indecipherable], this new clinker plant, we were having some problem with the clinker plant. So it did not manufacture much. So because it did not manufacture a lot, the overall benefit was very small compared to what we expected.
Keshav Lahoti
Understood. How much incentive has been recorded for this quarter overall?
Tushar Bhajanka
So overall incentive this quarter — INR37 crores is the incentive which has been you know booked in the book for this quarter.
Keshav Lahoti
Okay. And lastly on the capex, what is the capex for this year and how are your expansion at Silchar and Jorhat working, is it running on track?
Tushar Bhajanka
Yeah. So the capex for this year in the H1 2025 was about INR337 crores in which large portion meant in completing our new clinker plant and also the WHRS. For the H2 of this year, we are — we plan to spend about INR377 crores out of which we will — a major part is going in the Silchar project and some part of it is going in the clinker plant — the new clinker plant WHRS.
Keshav Lahoti
So there is a overall cut in capex earlier the total year capex was INR835 crores. Now it is broadly INR720 crore types?
Tushar Bhajanka
Yeah. So now it is — yeah you’re right, it’s at about INR720 crores.
Keshav Lahoti
So is the timeline delayed for either of the Silchar plant or be it Jorhat plant?
Tushar Bhajanka
I think the Silchar plant, earlier we were expecting it to commission by September, October ’26. Now we are expecting it to commission by December ’26. So, there is a two, three month delay. But besides that there’s no significant delay. In Jorhat plant, we are expecting by FY ’26 — FY ’27 end.
Keshav Lahoti
Okay, thank you, I’ll come back in the queue.
Tushar Bhajanka
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of [Indecipherable]. Please go ahead.
Unidentified Participant
Good afternoon sir. I have two questions. First is, what is the difference between Northeast cement market versus rest of the India cement market? And second is how much incentive do you expect to get in balance two quarters. And for next full year on consolidated basis?
Tushar Bhajanka
So given the Northeast markets are basically the seven states in Northeast, right. That is what consolidated — that is what constitutes the Northeast market. The outside Northeast market is basically West Bengal and Bihar for us. So, that’s how we differentiate, I think, in our results as well. And the subsidy that we expect, in quarter three, we were having some — we again were having some problems at new clinker plant. It was having some problems stabilizing. And by 20th or 21st of November, we finally expect to light up the kiln again and be able to run. So, because of that, the generation of subsidy till now has been quite poor. But in whatever is left of Q3 and in Q4, we do expect a good generation of GST. The exact numbers, I will quantify and I’ll let you know. I will probably ask, I’ll ask my CFO to get back to you. But I think about INR50 crores to INR60 crores quarterly is what we expect in the coming quarter.
Unidentified Participant
Okay, thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Sahil Solanki from Dialwealth Securities. Please go ahead.
Sahil Solanki
Hello.
Tushar Bhajanka
Hello.
Sahil Solanki
Very good evening, sir. My first question is what capacity utilization do you expect for Q3 and Q4 of current year and what is your expectation for FY ’26?
Tushar Bhajanka
So, in Q3 and Q4, I expect to go at about 11% to 12%. That is what the expectation is, right. So I think with that, of course, in Q4, we do expect the utilization to significantly improve because Q4 is, in Northeast season time, right, when the rainfall is the lowest. So we do expect to operate at about 85%, 90% capacity during season time in Q4. In Q3, I think the capacity utilization will be at about 70%.
Sahil Solanki
Okay. And for FY ’26?
Tushar Bhajanka
FY ’26, I think, on a year average, I think our capacity utilization will be at about 75%.
Sahil Solanki
Okay. And my second question was, how much EBITDA do you expect for balance part of the year and for FY ’26?
Tushar Bhajanka
So, I mean, as I told, we were having some problems in our Q3 because of the clinker plant. There has been a — there has been some technical difficulties that we’ve been facing. And because of which there is a problem in the introduction of the new line. But in Q4, our expectation is good. I think it should definitely be much higher than last year, it should be about INR220 crores to INR230 crores in Q4.
Sahil Solanki
Okay, that’s all from my side sir. Thanks lot.
Tushar Bhajanka
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go ahead.
Uttam Kumar Srimal
Yes, sir good afternoon. Thanks for the opportunity. Sir, last time you had guided for 11% volume growth for FY ’25. So are we sticking with that kind of that — volume growth?
Tushar Bhajanka
Sorry, how much did I suggest, 11%?
Uttam Kumar Srimal
11% for the full year.
Tushar Bhajanka
Okay. So this year also, we grew in Northeast by about 11% and outside northeast we grew by about minus 5%. So, that’s why the weighted average is about 7%. And we — in Q3 and Q4 we do intend to grow by 11% overall. So, I think for the coming two quarters we do expect to grow by about 10%, 11%. That will still be our estimate but we are focusing more on Northeast. So the growth rate in Northeast is going to be higher and growth rate outside Northeast, which is basically West Bengal and Bihar for us will be a bit lower.
Uttam Kumar Srimal
Okay, and sir how is the current pricing and demand scenario in both Northeast as well as in East region?
Tushar Bhajanka
So in Northeast the pricing scenario is definitely much better than outside Northeast. In Bihar and West Bengal the prices have seriously crashed, And compared to the earlier two quarters, I think in Bengal and Bihar the prices have not improved. So whatever the average was of Q2 still remains the price currently. In Northeast, the prices have increased by about INR10 compared to the quarter two. So in the Northeast the price is a bit more stable than outside Northeast.
Uttam Kumar Srimal
Okay. And sir, what — how is the capacity utilization for your new grinding unit in Guwahati? And where do we see the capacity utilization by the end of this year?
Tushar Bhajanka
So, given the capacity utilization for Guwahati is at about 77%. That is also primarily because we are utilizing our old line a bit lesser and we are focusing on a new line. Overall between the two plants in Guwahati, the line one and line two, the overall utilization will be at about 70%. By the end of quarter three, and in quarter four we do expect full utilization of both lines.
Uttam Kumar Srimal
Okay sir, couple of data points. Trade mix and non trade mix, premium cement sale, lead distance and fuel mix.
Tushar Bhajanka
Okay, so the trade percentage was 85% compared to Q1 ’25 82%[Phonetic]. That of course means the non-trade was 15% as to 16% in Q1. The lead distance is about 218 versus 207 in Q1. And the share of premium — sorry?
Uttam Kumar Srimal
The distance has increased from earlier quarters.
Tushar Bhajanka
Yeah. So the lead distance was 218 this quarter, right. And last quarter in 2025 Q1, it was 207. The share of premium is about 10.6 this Q2 compared to 9.1 in Q1.
Uttam Kumar Srimal
Okay and sir lastly fuel mix for this quarter.
Tushar Bhajanka
Fuel mix — so fuel mix, most of our coal has come from SSA, so about 55% of the coal has come from SSA — SSA Coal India coal agreement. Then about 18% has come from biomass and the rest of it has come from spot contracts and Nagaland.
Uttam Kumar Srimal
Okay And sir, what is the capex guidance for FY ’26? We have given for FY ’25 and for FY ’26 if you can quantify?
Tushar Bhajanka
Yeah. So in — for FY ’26 we basically intend to complete our Silchar plant which will be the main capex. And besides that, there will be operational capex. So, I think in total we estimate overall capex of about INR450 crores.
Uttam Kumar Srimal
Okay sir, that’s all from my side, and thanks a lot.
Tushar Bhajanka
Thank you.
Operator
Thank you. [Operator Instructions]The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Amit Murarka
Yeah, hi, thanks for the opportunity. Just wanted to check like you mentioned that the line three faced some issues. Could you just help a better understand like what issues and like after the resumption like will it be a normal run rate or would it take time to kind of ramp up the unit?
Tushar Bhajanka
Yeah, so I think there was some incident in the plant where there was some fault in the panel. So, because of that, we had to replace the panel in the electrical room. And, so it was just taking time for those panels to come. So now on the 17th those panels will be received and on the 22nd we’ll erect those panels and I think after that we should have a smooth functioning. So this is broadly, what.
Amit Murarka
And what kind of ramp-up is expected on this unit?
Tushar Bhajanka
I mean, ideally it has the capability of producing about 10,000 tons a day, which is almost about 2.8 lakhs to 3 lakhs tons a month, which is actually more than our current clinker capacity of the line one and line two. So, we expect that in November, whatever teething problem there would be will rest out. And by end of November, we are able to at least operate it at 7,000 to 7,500 TPD tons per day and from there on we can stabilize it to 8,000 tons, 9,000 tons a day. So I think once it ramps up, we should not have any problem of clinkers and we’ll also be in a position to sell clinkers to rest of the plants in Northeast and also players in North Bengal because there’ll be a very acute shortage of clinker in Northeast in the coming season and there’ll be huge demand for it.
Amit Murarka
Understood. And just generally understanding, like the industry has seen so much consolidation in the last year or so. Generally, what are your thoughts about it? Like, how does it impact the industry? I know in Northeast there has not been much, but then like JK Lakshmi, I believe is trying to enter the market and even UltraTech has been trying to do that. So, what is your outlook on these new entrants? And as well, what are your thoughts on this wave of consolidation in the industry?
Tushar Bhajanka
So, I mean, particularly to Northeast, I think JK Lakshmi is attempting, they’ve also bought something in Northeast to put up a plant. I think the process is a bit more complicated at Northeast, right. Because the land acquisition, the possession, the locals, and even the legality of the mines, right, is a bit more complicated than in other areas. So I think anyone who attempts to put up a plant will at least take four, five years to put up a plant. Given that they have now finalized the land and finalized the mines. So I think UltraTech and other players, I wouldn’t like to name, but they are, I think, all looking for something, but they’re not really being able to put a finger to a particular site or to a particular mine.
So given that, I think at least, whoever comes will take four, five years to come. And so I do not see the situation like rest of India repeating in Northeast anytime soon. In terms of consolidation in other parts of the country, I think it’s good for the industry overall because I mean, most of these areas were highly fragmented and for any pricing discipline and for decent profitability, I think there was a need for consolidation, which is happening.
Amit Murarka
Sure. And you are not in any ways into the M&A market in terms of either thinking or acquiring something or anything like that?
Tushar Bhajanka
No, we are not in the M&A market right now because we were earlier looking at south, but south, for others, kind of — size of the company that we are and the kind of margin there is in south and the variability in the margins, it did not look like the right kind of market. We have acquired mines in Rajasthan in auction recently. About 65 million tons of reserves. So we are conducting geological survey. It is in Nimbol. It is very close to Nuvoco’s Nimbol plant in Rajasthan. And we have — we are conducting surveys there and we are awaiting the geological reserve and the quality. And once we are sure of the quality, then we will start the land acquisition in that area and put up a clinker plant — look to put up a clinker plant there. But that I will confirm in the next quarter. But there are already details, I think we had also submitted in SEBI, the details of mines that we had participated and won.
Amit Murarka
Sure. Thanks a lot.
Tushar Bhajanka
Thanks.
Operator
Thank you. [Operator Instructions] We’ll take the next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi. Thank you, sir. Sir, fuel cost on KCal for Q2 was how much?
Tushar Bhajanka
So the fuel cost — just a second. The fuel cost is at about INR1.5 per GCV.
Shravan Shah
Okay. And likely to remain similar in the third and fourth quarter?
Tushar Bhajanka
Yeah, I think it broadly will remain the same only. So I think in Q1 also it was INR1.5. Right now also, it’s about INR1.5 and I think it should remain INR1.5 in the coming quarters as well. I think there could be some reduction, but no increase. Okay. And, sir this 12 megawatts WHRS which was supposed to start in October and November, has it started? So, it should start by end of November. So we phased it out in two sets. So one part of it which will produce about 6 megawatts will start by end of November and the second one will start by December end.
Shravan Shah
Okay, got it. And in terms of the capex, so you obviously for FY ’25 and FY ’26 also previously we were saying INR670 crores and now INR450 crores. So for both the years we are reducing the capex. So just trying to understand the delay, what you have mentioned is the Silchar plant will be now by December will be starting and the Jorhat will start by end of FY ’27?
Tushar Bhajanka
Yeah. So the Silchar plant, we should be able to commission by December, January next year and the Jorhat plant will be a year after that — a year or 15 months after that.
Shravan Shah
Okay. Okay. So both kind of delayed by three to six months delay is there on that part.
Tushar Bhajanka
Yeah, because we are also trying to time it with the market, right, because we don’t — because we are just making sure that we are timing it with the pace of the market, right, as the market demands. So we are buying land, we are taking all the permission, right. Like for example, we have already taken the — we have already done the public hearing and we are in the process of taking the environmental clearance for Silchar. The same we’ll do for Jorhat. And we are just trying to pace it depending on how the demand situation is.
Shravan Shah
Got it, got it. And in terms of the volume, also you mentioned that in the second half we are looking at 10%, 11% kind of growth in the second half. So, once this clinker will restart in November and then for the next year, broadly just trying to understand how one can look at on the volume front. So, trying to understand how the Northeast would be growing in the next year and how we will be growing in the next FY ’26?
Tushar Bhajanka
So, basically the main problem at least in Northeast was that the government expenditure in Northeast in the first half was a bit low, right and because of that the demand was a bit subdued even despite that we had grown at about 11% in Q2 of this year in Northeast, right. So we do expect the demand to pick up because there are signs of government releasing its scheme in Northeast at least from December, January onwards. So I think that will definitely positively affect the demand, right, for the coming two, three quarters. And we have to see what kind of schemes they bring in to boost up housing and all. So, in case the schemes are lucrative and they are effective, then I think there could be a surge in Demand again. In Q2 — sorry, again next year, it’s hard to predict right now because there’s a lot of fluctuation at a macro level, right. But I think by the next quarter I think we’d be better placed in giving a forecast about next year.
Shravan Shah
Okay. And you mentioned that in the third quarter our profitability will be lower. So just trying to understand given that the — as you mentioned the northeast prices are INR10 up and outside northeast is flatish on Q-o-Q basis. So just trying to understand on Q-o-Q basis given the incentive, how the incentive as you mentioned INR50 crores, INR60 crores. So, still there will be a decent Q-o-Q improvement should be there in the third quarter on the profitability front?
Tushar Bhajanka
Yeah. So I think there should be but it also depends on the price. And you know that INR40 crores, INR50 crores we have not been able to get. Because our line three, the new clinker plant was not producing, right? So, we’ll only get some part of the quarter three will get that benefit. So the entire benefit should be visible in the books from quarter four onwards, right? So because of the line three, the new clinker plant problem, we also have to buy clinker from outside, right? So that will also affect the profitability. But from end of November onwards we should start building up the clinker stock and then I think by quarter four, we should have enough stock for ourselves also at the same time we should have stock to sell, right. So Q4, I see it should be a drastic improvement in the profitability compared to last year’s Q4.
Shravan Shah
Okay. And lastly Manoj sir, in terms of the depreciation, so this quarter INR82 crores, INR83 crores. So how one can look at the second half and even what kind of a reduction one can look at in FY26?
Manoj Agarwal
Because we are on the WDV method, okay? So the depreciation will get diminished — keep on decreasing on the year to year basis because the first year it is the highest one. And then the second year on what it starts getting decreased, okay. So, this quarter whatever depreciation has come because you know, because last year in March we have capitalized our Guwahati unit. And April we have capitalized this clinker plant, okay. And part of WHR will also get capitalized in quarter three. So this year depreciation will be higher but next year onwards it will start diminishing.
Shravan Shah
Okay. Got it. And lastly the — what was the PPC share in the second quarter?
Manoj Agarwal
PPC share? Yeah, PPC share — PPC, OPC. 10% is OPC. Balance all are PPC.
Shravan Shah
Okay. Okay, got it. Thank you and all the best, sir.
Operator
Thank you. We’ll take the next question from the line of Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar
Yeah. Good evening sir, my — couple of questions. Firstly the startup — starting off this large clinker unit, has this — does it have like any major startup cost which can also hit your performance in next quarter or is this only related to like the other factors which you have mentioned on the profitability for clinker?
Tushar Bhajanka
Sorry, can you please repeat that? It wasn’t too clear.
Prateek Kumar
Is there any specific one-off startup cost which also like is going to hit the cost performance or like any specific marketing cost over next two quarters which can have an impact on your profitability?
Tushar Bhajanka
No. So I think those kind of marketing campaigns we have already undertaken, and so that already has hit the profitability in the Q1 and Q2, and unfortunately we had this technical problem of panels in our plant due to which we were not able to support the sales team in doing the best, right. So I don’t think there should be any hit in terms of the marketing cost or startup cost or startup of the kiln cost, right. I think there should be no cost as such. Of course, the first one or two months when the kiln operates it is still trying to reach its efficiency. So I think there will be not a surge in the fuel or power cost but there will definitely be over time a decline in these costs as we stabilize the kiln and we are able to operate our new and the latest more efficient kiln.
Prateek Kumar
Sure. And on demand, you talked about east demand minus 5 for last quarter, in October has the things improved like in terms of demand because we have a low base overall for east in the month of October?
Tushar Bhajanka
So I don’t — the demand has been subdued in east but in Northeast I think overall our volume may have been growing in single digit and Northeast we’ve seen an uptick but in east we haven’t seen median uptick. And we’ve not been also focusing that much in east because right now the pricing is such and there’s so much, work that we have in Northeast itself and the profitability in itself is so high in Northeast that our focus is normally in Northeast and we don’t focus on east as much.
Prateek Kumar
Particularly on Northeast, with your commissioning of plant and Dalmia Bharat is also commissioning a plant later in the financial year, do you see any specific pricing pressure into next year?
Tushar Bhajanka
I mean, there could be a pricing pressure, but I think Dalmia from what they have announced is coming in the next financial year, not this financial year according to their investor presentation, right. So, I do not think that we should be facing pricing pressure at least in quarter four. Probably, there could be a pricing pressure in Q1 to next year, but quarter four should be quite smooth because I think in Northeast no one really has clinker to serve the demand, right, which comes in quarter four this time. So, I think the pricing should be higher just because of the demand-supply gap.
Prateek Kumar
Thank you, sir, for answering my question.
Tushar Bhajanka
Thank you.
Operator
Thank you. We’ll take the next question from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go ahead.
Uttam Kumar Srimal
Yeas, sir, thanks for the follow-up. Sir, what is the current status or AAC block in Guwahati?
Tushar Bhajanka
AAC block in Guwahati should be commissioned by December, in the first two weeks of December. And with that we’re also launching, construction chemicals, right. So we will be getting into motor — waterproofing chemicals and all these segments. And so I think that should start. And we’ve already started with advertising and I think by first weeks of December we should be able to launch it.
Uttam Kumar Srimal
So, we will also receive incentive for this AAC block.
Tushar Bhajanka
I’m sorry.
Uttam Kumar Srimal
We are also receiving — we are also going to receive incentives for stabilizing this AAC block.
Tushar Bhajanka
Yeah, we will be receiving incentives for the AAC block as well. I think it is eligible in both the central subsidy and also the state subsidy.
Uttam Kumar Srimal
Okay. And sir what was the cost of clinker purchased during this quarter?
Tushar Bhajanka
In quarter two?
Uttam Kumar Srimal
Quarter two, yeah.
Tushar Bhajanka
In quarter two? I don’t think we have purchased that much clinker, but I’ll get back to you. In quarter two we did not purchase much clinker. I think it is only in quarter three that we purchased clinker. In quarter two, we may have purchased like less than 5,000 tons, 6,000 tons of clinker.
Uttam Kumar Srimal
Okay, sir. That’s all from my side. Thanks a lot.
Operator
Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
Your employee cost and rate will remain at this level INR60 crores in upcoming quarter also — INR60 crores, INR65 crores?
Manoj Agarwal
This quarter, there is a ex gratia payment of around INR3 crores. So that will be out in the coming quarter. The rest will remain the same. Only the ex gratia payment will not be there in the quarter 3 and quarter 4. That is a one-off cost.
Keshav Lahoti
Got it. And Jorhat plant is acquired for this expansion?
Tushar Bhajanka
The Jorhat land has been identified and we still have to buy the land. But I think it has been identified and the team is working to acquire it. And the cost of manpower, on a running rate basis should be on an average about — the increase should be about INR42 crores to INR43 crores.
Keshav Lahoti
Okay, got it. One last question on capex side, can you give a broad breakup for capex for FY25 and ’26 for which project how much you are allocating?
Tushar Bhajanka
Yes. So, in FY25 the H2, we are allocating about INR60 crores to the clinker plant and the WHRS.
Keshav Lahoti
Preferably give FY25 only rather than H1 and H2.
Tushar Bhajanka
Okay. So in FY25, we are almost spending more INR170 crores in clinker and WHRS out of which a lot has already been spent. In Silchar we are spending about INR110 crores, in AAC and the construction chemical we will be spending about INR67 crores. In Jorhat we are spending about INR26 crores to acquire land. We have bought about 120 trucks of our own fleet which is about — which costed us about INR52 crores. We are putting — we have put up an AFR system which should be commissioning in November which has costed us about INR32 crores. And we have gone for a good captive project with JSW energy which we had also notified in SEBI that has costed us — that will cost us about INR12 crores. So, and the opex — operational capex should be about INR170 crores. So, in total it is coming to about INR600 crores.
Keshav Lahoti
Come into around. Sorry.
Tushar Bhajanka
It’s coming to about I think INR650 crores around.
Keshav Lahoti
Okay. Because the capex guidance is INR720 crores for this year. And the remaining part?
Tushar Bhajanka
The remaining part, we have — for example in Silchar we had actually, I will have to — I think I’ll have to revise these numbers, but I think in Silchar we had reduced some of the capex because it was getting postponed by two, three months. And I think in Jorhat I think there’s some capex reduced. So I think the capex sheet, I think I’ll add it in the investor presentation and we will submit it.
Keshav Lahoti
Okay, that is helpful. Do you have capex ready for FY26 or should.
Tushar Bhajanka
Yes, I have a tentative capex ready for FY26 which I’ll also ask the CFO to kind of put in the investor presentation. So, it is — Silchar, it is about INR300 crores, Jorhat it is about INR100 crores and operational capex is about INR100 crores. And so in total it is about INR500 crores. And then there is group captive which is INR12 crores, in total it’s about INR480 crore to INR500 crores.
Keshav Lahoti
Understood, that is helpful. Thank you. That’s it.
Tushar Bhajanka
Thank you.
Operator
Thank you. The next question is from the line of Hemant, an Individual Investor. Please go ahead.
Hemant
Thank you for providing with the opportunity. I have couple of questions. First question from my side is regarding the recent motor stake sale, and especially it comes at a time when the plan of the company is very, very robust. We are finally moving towards, I mean 2 million tons of capacity by FY ’30. So, there has been a couple of stake sales by Suchita Agarwal, Gayatri Chamaria. Can you please elaborate on that? And I mean this is I think considered as a negative sign especially at a time when the plans are very, very robust, when the growth plans are very, very strong.
Tushar Bhajanka
Yeah. So I think that honestly is not — in Star Cement, there are about four families with the promoter group, right. And out of that one family is actually the one who’s selling the stake and the other three families normally are seen as picking up the shares in the market rather than selling, right. So I think it is just a personal situation for them to sell their stake and not a situation which is reflective of the future of the company. And you would also notice that — in the last one and a half, two years the other promoters have also increased their stake, right. So I think, that is also there. So I think it’s not necessarily something related to the company, but there’s just personal requirement and personal preference.
Hemant
So, sir, the Agarwal family and the Chamaria family, they are not the promoters of the company right now? Because I saw it in the — I mean, I saw their name in the promoter list.
Tushar Bhajanka
Yeah, no the Chamaria family and the Agarwal family — the Chamaria family mainly is the one which is selling. I think the Agarwal family is just part of the Chamaria family in some ways, right. So, I think the Chamaria family is selling the stakes right now. And they are part of the promoter group. But they are one of the four families in the promoter group, right? So, what I’m trying to say is that they — may be the Chamaria family is selling the stake for their own personal reasons. So, it is not reflective of the overall promoter group, right.
Hemant
So it doesn’t affect the — I mean, the sort of growth and road map of the company, right? They are quite.
Tushar Bhajanka
Can you repeat that?
Hemant
Hello.
Tushar Bhajanka
Hello. Can you repeat that?
Hemant
Yeah, yeah. So, I mean, so it is just a personal thing and it has nothing to do with the future roadmap of the company and the growth plans are still robust right?
Tushar Bhajanka
No, I don’t think it says the future roadmap of the company, it is just a personal choice that they feel that they need to sell.
Hemant
There has been a list where Chamaria family [Indecipherable] recent pledge created by him. So what was the reason behind it?
Tushar Bhajanka
So all these things are, again their personal, whatever their — because you have to understand that in Chamaria family also the shared equity is quite divided, right. Because they’re also having like four brothers and four brothers are now having their children and you know, so on, so forth. I really do not know what is going on. And they together constitute a family which may be owning about 14%, 15% of the company, right. So I do not know what goes around in that 14%, 15% really. But my point was that, if the 67% is the promoter holding, the rest 52% is actually not the ones who are buying or selling, right. So just this 15% which is actually selling and buying. So I think it should just be looked at as the personal choice rather than something which is a bit more serious.
Hemant
One more thing I wanted to ask you is, in the previous quarter, I mean, in Q1, we had some issues like clinker, we had to buy from outside and we were supposed to get the benefit of GST, then the FSA benefit. So, ideally, Q2 should have been much better, right. Because I think we were also expecting the logistics cost to get reduced as we were introducing 100 new trucks and power and fuel costs should also must be going down, as we had decided earlier. So I — don’t you think that Q2 should have been much better.
Tushar Bhajanka
No, our expectation honestly was also that the Q2 should have been better, and that is mainly, the unfortunate part was the clinker, right, that we were not able to stabilize the clinker plant till now. And that was giving us the hiccup. And it has kind of, given us the hiccup for the last five, six months. And that is where, we have kind of suffered. But, having said that, I am confident that by end of the month, right, we will be able to stabilize the plant and we should be able to get the benefits of having a new setup in terms of the GST also in terms of the availability of Clinker as well. And in terms of the heat rate, power and all those other aspects, right. And the clinker — the freight and all, you’re completely right. We also expected a reduction in freight, but the freight cost and all those things could not reduce as much and have increased because there was a lack of availability of clinker.
So the entire logistics and the entire, movement of clinker, just changes and it increases and puts pressure on the logistics, right. So I think that is what we were struggling with in the last quarter too. And I completely respect and agree to the fact that yes, we were expecting better results and we should see it, right. Given the price supports us, right. Because price is something which is not in our control. So, and given how east prices have been behaving, it’s very, very — yeah, it’s not great, right. So given the price.
Hemant
Sorry to cut it short, so it’s the same Clinker plant which is, I mean, troubling us, right, from Q2 right?
Tushar Bhajanka
Yeah. The clinker plant is basically something which we are looking to stabilize, by end of the month it should stabilize. But there’s nothing, long-term wrong with the plant. It is just that, some parts of the plant, like the crusher and the stacker, [Indecipherable] we are waiting for it to come, right. So once — now that the plant is completely ready in the sense that, some aspects of the plants which needed to be completed are also completed, I think we’ll be able to stabilize it in a much better way, right. And it is just a hiccup of running the plants now, right. So I think that we should be able to do and we should be able to come up with better results.
Hemant
It’s the same clinker plant, right, Sir.
Tushar Bhajanka
Sorry.
Hemant
It’s the same clinker plant, right, which was troubling us in Q2. Right?
Tushar Bhajanka
Yeah, the same thing.
Hemant
So, sir, shall we expect a sequential recovery from Q3 or Q4, because I think the dispatches are also less because of monsoon season and all. So shall we expect a sequential recovery from Q3 or Q4?
Tushar Bhajanka
I think a better recovery in at least the profitability would be from Q4, right? Because I mean I, I’m talking about November end to kind of stabilize the plant, right. I’ve always crossed October and November, right. So the recovery of getting up — getting a new plant and be able to sell clinker and all those things will actually start coming in the GST also, because the GST will also come for the clinker plant when you produce clinker, right?
Hemant
Correct.
Tushar Bhajanka
So that benefit I think will be from Q4, right. Q3 will still be a struggle. But Q4 is where we actually see the benefit coming.
Hemant
And sir as per the annual report of 2024, you were adding 20% growth in revenue with higher EBITDA in FY ’25. So, are we some sort of lowering guidance for FY ’25 given the kind of problem we are facing for clinker unit?
Tushar Bhajanka
No, I think the problem is not only of the capacity, the problem is also demand, right. Like as we have seen for the cement companies also, they most have — some of them have degrown, right. And some of them have actually grown in only single digits, right. So entire India I think there is a problem of demand, right, that we are facing. So my expectation will still be double-digit, right. That we should be able to do Q3 and Q4 well, but I do not think that the number will be touching 20%, right, because the demand also needs to support for that to happen.
Hemant
Yes. So maybe early double digits we can say, right?
Tushar Bhajanka
Yeah, early double digits. Like I think 12% — 11%, 12% would be a good estimate.
Hemant
And sir, one more thing I have a concern and it is very, very disheartening. We as an investor and we are also doing equity research, no one picks up the call. And I mean, the number which are there in the website and the number which was there in the investor presentation, we were unable to reach the Investor Relations department. No one picks up the call, neither the sales team nor any replies to e-mails. So this is very, very disheartening, sir. And one, two numbers are not working also, sir. Like the Guwahati number, [Indecipherable] I just got a chance to connect to the Delhi team, and there — I mean, there something like the sales department or someone else, they took the call, and they were unable to get me connected to the Investor Relations department. So it is very, very disheartening. Please note this as a concern, sir.
Tushar Bhajanka
Which, fund are you speaking from?
Hemant
No, I am an individual investor, sir.
Tushar Bhajanka
Okay. So.
Hemant
I do my own research and I invest and do most of the [Speech Overlap) it is very, very disheartening sir, actually.
Tushar Bhajanka
No, I get it. So, I will do one thing — I will — in this presentation that there is, I will make sure that all the numbers are working and you don’t have this problem. And I will also ask the team to be a bit more responsive to such queries.
Hemant
Thank you. Thank you so much, sir.
Tushar Bhajanka
Thank you.
Operator
Thank you. The next question is from the line of Jinesh Shah, an Individual Investor. Please go ahead.
Jinesh Shah
First of all, thank you for the opportunity. Once our clinker plant will be established by end of November, how much cost saving in terms of operational cost saving we are expecting on monthly basis, if you can elaborate on this please?
Tushar Bhajanka
So, once the clinker plant does come end of November, then we expect to shut our line one, the first line that we have of clinker, where the heat rate is almost touching 780 kCal and the power is 65, to a bigger kiln which has a power consumption of about 50 units and a heat rate of about 710 kCal. So, there will be a substantial saving of about, — I’m expecting a saving of just from the operational — operations perspective, I think they should be saving about INR50, right, from operating the new kiln. And then also the SGST benefit. So the GST benefit of the central subsidy that we’ll get, right, which would be another, about another weighted average, about INR100 of benefit on cement. So I expect about INR100 to INR150 of benefit from operating the new kiln. And then of course, the new kiln will also give us the benefit of selling clinkers and availability of clinkers, which is a huge benefit, right. Because as I said, the demand in northeast for Clinker is also going to be very high. It’s still high and going to be very high, especially in the season time. And at that position, if you’re able to sell clinker then I think that will generate additional income for us.
Jinesh Shah
Okay, and what is current market price of cement, OPC, PPC there in Northeast and how do you see trend in Q3, Q4?
Tushar Bhajanka
So, sorry, can you repeat the question?
Jinesh Shah
So what is the current cement price in Northeast and how do you see the cement price trend in Q3, Q4 in Northeast?
Tushar Bhajanka
So, the current price in Northeast is about INR460 per bag, right. And we like in November, I do not see an increase in the pricing but I think going ahead hopefully I think we should be, I think by December, I think normally the prices do increase. So we do see like a INR15 to INR20 scope of increasing prices so that we don’t know, it depends on how the demand is and how the pricing behaves. So, I think — like the experience from last year is that normally the prices increase by about INR15 to INR20, you know, in December leading to the season.
Jinesh Shah
Okay, sir, we have a production plant in Northeast. And if the demand in Northeast is not increasing and if we are selling our products outside the Northeast, are we still entitled for the central subsidy?
Tushar Bhajanka
In clinker, yes. No — but not in — so basically there are two benefits. One is the SGST benefit, that is of course the State of Assam benefit. And that we only get for — that we only get for sales in Assam. Then there’s a GST benefit that we get from the clinker, that is for overall GST, that is a central subsidy benefit, right. So the central subsidy in clinker we get for all our sales. But for the sales from grinding unit, the benefit is only for Assam.
Operator
Thank you, sir. Ladies and gentlemen, due to time constraint, we will take the last question for today which is from the line of Prachi Kadam from Dolat Capital. Please go ahead.
Prachi Kadam
Hello.
Operator
Yes, ma’am, please proceed.
Prachi Kadam
Yeah, hi, sir, can you help me with the EBITDA per ton for east and outside — Northeast and outside Northeast?
Tushar Bhajanka
Yeah. So the EBITDA per ton for Northeast was about INR1,300 per ton. And the EBITDA per ton for outside Northeast was about minus INR200.
Prachi Kadam
So it was minus INR200?
Tushar Bhajanka
Yeah. Minus INR200 per ton was the EBITDA for outside Northeast and for Northeast it was about INR1,300.
Prachi Kadam
Okay, sir. Yeah. Thank you so much.
Operator
Thank you. As that was the last question for today, I would now like to hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.
Vaibhav Agarwal
Yeah. Thank you. On behalf of PhillipCapital, we like to thank the management of Star Cement and participant joining the call and many thanks to participants joining the call. Thank you much. Michelle, you may now conclude the call. Thank you.
Operator
[Operator Closing Remarks]