Star Cement Ltd (NSE: STARCEMENT) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Dilip Kumar Agarwal — Chief Commercial and Corporate Affairs Officer
Manoj Agarwal — Chief Financial Officer
Analysts:
Vaibhav Agarwal — Analyst
Shravan Shah — Analyst
Rajesh Ravi — Analyst
Uttam Kumar Srimal — Analyst
Nihar Dave — Analyst
Milind Raginwar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Star Limited Earnings Call for Quarter and Nine Months Ended 31st December 2024, 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone.
I now hand the conference over to Mr Vaibhav Agarwal from PhillipCapital India Private Limited. Thank you, and over to you, sir.
Vaibhav Agarwal — Analyst
Yeah. Thank you, Michel. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Star Cement Q3 and Nine-Month FY ’25 call. On the call we have with us Mr Agarwal, he is the Chief — Chief Commercial and Corporate Office Officer of Star Cement; and Mr Manoj Agarwal, who is the CFO of the company.
At this point of time, I’ll hand over the floor to Mr Agarwal for his opening remarks, which will follow-up by Q&A.
Thank you and over to you, Dil, sir.
Dilip Kumar Agarwal — Chief Commercial and Corporate Affairs Officer
So good evening, everyone. Dilip Agarwal, Chief Commercial and Incorporate Affairs — official for Star Cement. I welcome you all-in this conference call for discussing Q3 numbers and YTD numbers of FY ’25. One small clarification that Mr Tushar was very willing to join, but he has been traveling. So he has not been able to join this call. Otherwise, with me, my CFO, Mr Manoj Agrawal, is there. So he will take you through all the numbers of Q3 and then we will try to answer your question in question-and-answer session when it opens. Thanks. Over to Manoj.
Manoj Agarwal — Chief Financial Officer
Yeah. Yeah, hi,. Very good afternoon. I on behalf of Vista Cement welcome you all to our con-call for discussing our number of Q3 FY ’25 and nine months ended 31st December ’24. I would like to clarify that we will be discussing the historical numbers and there is no invitation to invest. Having said that now, I will just take you through the Q3 number followed by TV numbers.
Starting from clinker production, during the quarter ended December ’24, we have produced 6.42 lakh ton of clinker as against 7.37 lakh ton same quarter last year. So-far as cement production is concerned, we have produced 10.82 lakh tons this quarter as against 9.81 lakh ton same quarter last year.
Now I will take you through the sales volume. During the quarter, we have sold 10.60 lakh ton of cement and 0.07 lakh ton of clinker as against 9.70 lakh ton of cement. That means of approx 10% growth is there. This is far as far as cement and clinker sale is concerned. As far as geography distribution of cement is concerned, in Northeast we have sold around 8.30 lakh ton as against 7.32 lakh ton during same quarter last year. And as far as outside Northeast is concerned, we have sold 2.31 lakh ton of cement this quarter as against 2.38 lakh ton same quarter last year. In terms of blend mix, it is almost 11% of OPC and the rest is PPC. These are the quantitative numbers of the quarter.
Now I will take you through the financials, the total revenue figure this quarter is around INR719 crores as against INR651 crore same-period last year. As far as EBITDA figure is concerned, this quarter we have done an EBITDA of around INR107 crore as against INR153 crore last year. PAT is INR9 crores as against INR74 crores in the same-period last year. The decrease in PAT on account of increased depreciation due to capitalization of our 2 million ton grinding unit at and also the clinker plant at Lumsong. On per tonne EBITDA front, it is INR1,000 during this quarter as against INR1,576 per tonne same quarter last year. This is what our quarterly numbers of 3rd-quarter.
The total revenue figure for the nine months ended 31st December ’24 is around INR2,11 crores as against INR1,997 crores same-period last year. As far as EBITDA figure is concerned, during the nine months ended December ’24, we have done an EBITDA of around INR321 crore as against INR395 crore last year. PAT is INR46 crore as against INR207 crore in same-period last year, the decrease in account of increased depreciation as explained earlier. On per tonne EBITDA front, it is INR1,005 during the nine months ended December ’24 as against INR1,304.7 same-period last year. These are the quarterly and year-to-date numbers.
Now I request all of you if you have any queries, you can ask the same and I will request you about to moderate the query wherever it requires. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin with a question-and-answer session. Anyone who wishes to ask questions may press RN1 on the touchstone phone. If you wish to withdraw yourself from the question queue, you may press RN2. Participants are requested to use only answers while asking a question. You may please press star and one to ask questions.
The first question is from the line of Shravan Shah from Dolat Capital. Please go-ahead. Hi, thank you, sir. Sir, first couple of data points. Trade share, premium share lead distance and KKL for this quarter.
Dilip Kumar Agarwal
So here of trade-in Q3 watch around 81% and rest have been and what else is for.
Shravan Shah
Premiums are lead distance and KKL cost.
Dilip Kumar Agarwal
Premium sale is this quarter is 12%. Late distance 222 kilometers.
Shravan Shah
, 222 and KKL cost we call.
Manoj Agarwal
Kkl cost me the same similar to 1.5 around 1.5 that was more or less in the same line as last quarter.
Shravan Shah
Okay now the basic thing, so how do we now see in terms of the volume growth for the 4th-quarter and for FY ’26.
Dilip Kumar Agarwal
We are expecting a volume growth of, I think around 7% to 8% full-year for the full-year and around 10% in Q4.
Shravan Shah
Okay, got it. And for next year, how one can look at the end?
Dilip Kumar Agarwal
We must add here that in Northeast market, this year, demand was flattish kind of thing. Just if you consider the demand of the industry as a whole, then the demand was flattish and we are expecting to grow by six, seven years this year. And next year also, we are expecting to grow by to 15% for next year.
Shravan Shah
Sorry, sir, 12% to 15% you said.
Dilip Kumar Agarwal
Yeah. So we are talking about our growth.
Shravan Shah
Yeah, yeah, 12% to 15%. Okay. Got it. And sir, in terms of the profitability, so we were looking at so a decent in terms of, 220 of 220, IN 230 odd kind of EBITDA in the 4th-quarter of this year.
Manoj Agarwal
So that we — that we remain at the same number that we should be — we should be closing around the similar numbers. Given the issues that we faced in Q3 in terms of stabilization time of our new clinkerization unit and then followed by some purchase of clinker from outside, otherwise our Q3 numbers would have been better, but we are expecting that Q4 will be — will pan-out much better than earlier quarters. So that is what our EBITDA projection is around 225 to 230 on the side.
Shravan Shah
Okay, got it. Got it. And now, sir, how one can look at in terms of the pricing, so current prices, so January until now versus the 3rd-quarter average for Northeast and outside Northeast.
Manoj Agarwal
What I can add here that prices so-far as Northeast is concerned, let me take first market. So as I said that the demand was flattish so-far as industry is concerned during this current financial year. And price is looking stable as of now and it should remain stable or with a maybe a bit positive side. We are not expecting a price cut going-forward in coming months. So-far as outside Northeast is concerned. So prices has taken a bit I think volume has also — there is a degrowth in volume also.
Shravan Shah
Okay. So — but sir, broadly, if somebody looks at so current prices, whatever is for outside Northeast, how much it would be lower versus the 3rd-quarter average?
Dilip Kumar Agarwal
More or less 3rd-quarter and portfolio because already 3rd-quarter already prices have gone down in terms of outside note. So we are hopeful that there will be no further decrease will not be there. Maybe half, we have done an increase in maybe November, December the increase was there. So that full impact will come only in this quarter. So prices from here we even if some will be either flat or there will be increase in prices.
Shravan Shah
Okay. Okay. Okay. Got it. And other on the capex front, lastly is a timeline for both the expansion of Silcher and the. So is there any change in the timeline and in terms of the capex?
Manoj Agarwal
FY ’26 we have pulled for future and for FY ’27, that is still remain the same.
Shravan Shah
Okay. So, I think last-time we said 3rd-quarter of FY ’26, so now it may.
Dilip Kumar Agarwal
Be that is in FY ’26.
Shravan Shah
Okay, got it. And in terms of the capex, how much we have done and for full-year this and next year, how much the capex we are planning to do at considering everything, the block AEC block plus the WHRS plus all the expansions, AFR, everything.
Manoj Agarwal
So actually major capex which is left out is now future and Johat only, right? So full capex should pan-out in next one-and-one and half years or 18 21, two years you can say from now. And, we are hopeful to commission in FY ’26 as my colleague rightly said. So the full projected capex of should get exhausted during the next financial year. So-far as AC block project is concerned, it is in an advanced-stage except for — except for some. I think in this quarter, the project should be commissioned.
Shravan Shah
Sir, in terms of the absolute number, if you can help us how much we have already done capex in nine months and for 4th-quarter, how much and for FY ’26 and ’27, if you can — in terms of the absolute value, if you can specify the capex?
Manoj Agarwal
So nine months, we have already done around 440 kind of 440 CR and the rest of the rest of the period in this quarter, I think it should be around 200 between 200 250 CR.
Shravan Shah
Okay. Next year, sir FY ’26 and ’27 sir.
Manoj Agarwal
FY ’26 should be around 600 and say it’s another — another 300 to 400, 400 you can take for FY ’27.
Shravan Shah
Okay. Lastly, the incentive for 3rd-quarter and then I will be in queue. Yeah, please share.
Manoj Agarwal
Yeah, what you want to know,
Dilip Kumar Agarwal
3rd-quarter is INR43 crore.
Shravan Shah
Okay. Okay. Thank you and all the best, sir.
Dilip Kumar Agarwal
Okay.
Operator
Thank you. You may please press star and want to ask questions. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go-ahead.
Rajesh Ravi
Hi, sir. Good evening to Manor sir and, sir. Sir, my first question pertains to this quarter, you mentioned that there was impact of one-off clinker purchase because of the new line was getting stabilized. However, could you explain what led to sharp jump-in the other expenses and what would be the normalized run-rate? Because earlier it was close to INR800 to INR900 and this quarter it is almost close to INR1,170 other expenses.
Manoj Agarwal
Rajesh, the other expenses, expenses which because we have one because the shutdown cost was there, it is a one-off kind of thing is INR10 crore is the one-off things, okay, that will not be there in the next quarter.
Dilip Kumar Agarwal
But what happens, Rajesh, let me explain that whenever you take a maintenance shutdown for any reason, whether for a stabilization or normal shutdown, so two things which happen. One, we have to incur some cost for maintenance. On the other side, because of lower production on account of maintenance shutdown, your fixed-cost doesn’t get spread over the volume. Exactly, since it was normally after a tour the season starts of cement in Northeast. So you have a demand growth also during that time as compared to second-quarter. So we had to just to maintain the market-share and all, we had to purchase some outside clinker also. Linker is always costly. So everything taken together, it has a bidding on the bottom-lines.
Rajesh Ravi
So if we want to strip out the one-off costs including maintenance and the one-off clinker purchases.
Dilip Kumar Agarwal
Can you speak bit loudly longer, please?
Rajesh Ravi
I’m saying, okay, hi, sir. So saying if we strip out this INR10 crore and the clinker purchase cost, how much would be the impact in the Q3?
Manoj Agarwal
Because 1.5 lakh ton we have purchased clinker that is almost at north of INR30 crore. And plus INR10 crores shutdown you can add shutdown cost of INR40 crore is the one-off kind of thing in this quarter.
Rajesh Ravi
Which will not be recurring in subsequent quarters. Okay. So almost INR400 odd impact because of these two elements.
Dilip Kumar Agarwal
So there will be two things in Q4, which we are there — which we are there in Q3 and will not be there in Q4, each one is no purchase cost of clinker and another additional shutdown cost.
Rajesh Ravi
Okay. And this logistics cost, Q4, will it remain at similar elevated level or would it again come down to below 1,100.
Manoj Agarwal
Normally happens because everybody has the volume pressure. So there is always some price increase in freight cost is there. So there may be nice on the gap of seasonality that yes, otherwise there is no long-term or any such kind of cost.
Rajesh Ravi
Okay. Okay. So — and this WHR you would be commissioning this should become operational in Q4, 12 megawatts?
Dilip Kumar Agarwal
Yes, yes, yes. WHF will be operational in this quarter.
Rajesh Ravi
Near WHR. Okay. And sir, lastly on the competitive landscape, you know, we believe that the Dalmia project is still far away, but once that still gets started next year, early next year, what sort of scenario would that lead to pricing erosion in your markets.
Dilip Kumar Agarwal
I don’t think that — yeah, this can happen theoretically, yes. But I don’t think that there should be any call on price discipline. So we do not expect much of prices getting down. And we can discuss it at appropriate time when is already here in the market.
Rajesh Ravi
And sir, one last question. If I see the trades — trade share trend — the trend for your trade sales, start of Q FY ’24, we were close to almost 89% 90% was the trade sale volume, which has come down to 81%. So is there any change aggressiveness in the non-trade market or it is just a one-off that we are close to 81% in Q3?
Dilip Kumar Agarwal
No, there is no change. The change — the only change that you are aware that we have commissioned a 2 million grinding unit also in this current financial year. And we have also commissioned the clinker unit as now. So earlier, our production was just matching the market requirement. Now with the increased capacity, we are testing what is so-far as infrastructure market is concerned. So that we now our clinker production is going to almost stabilized. Yeah, on a day-to-day basis, we are utilizing around 70% of the capacity of the new unit and it’s similar is the case with the new branding unit at. So we are — we are exploring as since earlier, we were not focusing too much on non-trade market because of lower realization on non-trade as compared to trade. Now with increased volume, we’ll definitely look for some share in non-trade markets also. So that is why a pie of non-trade is looking a bit higher this time against 10%, 11% to 18%. So within volume, I think it should again go down.
Rajesh Ravi
Okay. Great. Great, sir, that’s all from my end. I’ll come back-in queue. Thank you all the best.
Operator
Thank you. Thank you. You may please press R&1 to ask questions. The next question is from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go-ahead.
Uttam Kumar Srimal
Yeah, good afternoon, sir. Thanks for the opportunity. Sir, your premium cement sale has improved to 12% from 9% last year. So where do you see this premium cement still moving ahead?
Manoj Agarwal
Sorry? No, because whatever growth we are doing, whatever growth was there in the Northeast market because as told that we have — the Northeast markets have not grown in nine months, it is a flattish kind of thing, but still we have grown more around 10%. So sales for the growth was there is from Northeast. And outside Northeast, you know, prices were lower and also we have a clinker constant. So we have not put much of the effort for including the volume in outside. But once now everything is streamlined, now we will see if the prices will improve, then we will also focus on the outside.
Uttam Kumar Srimal
Okay. And sir, what has been the capacity utilization of our plant during this quarter?
Manoj Agarwal
The plant is still because last year also it is around 45% till now. So we are hopeful that same.
Dilip Kumar Agarwal
Plant mainly caters the markets of West Bengal on behalf. So as we — as we said earlier, that markets of outside Northeast have not grown that way and we had some clinker constraint also and we had to buy from outside to. So we were not focusing upon grinding unity and wise also northeast market are much, much better than Bengal and Bihar markets. That is why capacity utilization has not been — has not increased as compared to last year. But during this current quarter, we are expecting some improvement in rest of East and capital and subsidy utilization. So — but in any case, our prime focus will still remain with market so-far as overall pipe is concerned.
Uttam Kumar Srimal
Okay. And sir, what has been our fuel mix during this quarter, coal biomass and coal?
Manoj Agarwal
Yeah. What you want to know biomass? Because this — because if you get the TSR budget replacement, this quarter is around 13% kind of thing.
Uttam Kumar Srimal
Okay. So overall, sir, fuel mix, last-time it was 20% was coal, 20% biomass and 60% from the fuel supply arrangement?
Manoj Agarwal
Yeah, yeah. And is the biomass and 20% around is nagal and coal. So this is the mix for this quarter.
Uttam Kumar Srimal
Okay. Okay. Okay, sir. That’s all from my side and all the best. Wish you all the best.
Dilip Kumar Agarwal
Thank you. Thank you
Operator
Thank you. Please press Sarin one to ask questions. The next question is from the line of Nihar Dave from IIFL Capital. Please go-ahead.
Nihar Dave
Yeah, hi, sir. Thank you for the opportunity. So, sir, like you said, you purchased INR30 crores of clinker from outside. So have we had no clinker production at all or what is the clinker production for this quarter?
Manoj Agarwal
I have the clinker production during the quarter, we have already given the number. This quarter we have produced 6.41 lakh — 42 lakh clinkers we have produced, but two things are there. One is that new plant was in the step — little bit took more time to stabilize. And second thing is that because the road was also problem because.
Dilip Kumar Agarwal
There were two constraints actually. One was as we already elaborated that our — our new clinker line was under stabilization. And the second was that there were some issues so-far as highway is concerned. There is some long-time repair work which was been due for long-time. Now government has released fund and the work is going on a full-fledged. So there were issues of availability of vaccines transport also. So that is why dispatches were flow. We are expecting this road to complete in next one month’s time, but we are trying some alternate way of dispatching in terms of alternate routes and all. So this both the cases taken together, our this number is looking like that.
Nihar Dave
Okay. So even for the most part of this quarter also, that road is not completed. So we should see a similar sort of scenario for this quarter.
Dilip Kumar Agarwal
Purchase will not be there. I mean dispatch of cement from our plant, taxi. We have two plants, one is at where-is very minimal as compared to rest of the plant like and. But whatever dispatches which we are supposed to take place from Rooms now because of this road issue. It cannot pan-out like that as expected and it is a one-off issue. I think this quarter it should get resolved. And we are already doing good numbers this quarter. So I don’t think there should be an issue this quarter so-far anybody is concerned. And clinker production is already now in-line with our expectation. So both the things as of now, it looks at-risk.
Nihar Dave
Okay, perfect. And sir, just one last question. In our regional mix in Northeast and East, so what was our sales in the eastern region?
Dilip Kumar Agarwal
So Northeast was around 3/4 of the pipe, around 75 — sorry, sorry, sorry, 79% of the total sales and around 20% 21% was outside last quarter.
Nihar Dave
Got it. Got it. Thank you. Thank you very much, sir.
Operator
Thank you. Ladies and gentlemen, this will be the final reminder and no further reminders will be given that you may please press star and one to ask questions. The next question is from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi. Sir, just needed a clarity in terms of the Ultra Tech stake from the existing promoter. So any comment in terms of the future plan or is there a possibility that they can have a higher stake?
Dilip Kumar Agarwal
So I think we have already clarified this issue in past also when this issue had come up. Our rest of the promoters has stand committed about the future plan of estab cement. There is no such plan of further so-far as rest of the promoters are concerned. So whatever we have — we have told earlier in this issue, I think we reiterate the same thing.
Shravan Shah
Okay. And Manov, sir, for this quarter, 3rd-quarter in terms of the Northeast EBITDA per ton and outside Northeast would be how much?
Manoj Agarwal
It is around I think I think those numbers are not bifurcated.
Dilip Kumar Agarwal
Okay, Northeast and ROE EBITDA are not separated. So as of now, we will not be in a position to comment upon EBITDA in Northeast and rest of Northeast.
Shravan Shah
Okay, okay. No issue, sir. A second in terms of the our future expansion in the Rajasthan, so to reach a 20 million ton capacity by FY ’30,. So that stand still remains intact. Any update there in terms of the land acquisition or any anything?
Dilip Kumar Agarwal
Yeah. I said in earlier calls that we have already owned the for deposit was around INR65 million. The exploration for testing is going on. And side-by-side, this land acquisition process is also going on. So we stand committed to project and at appropriate time, we will definitely discuss the timeline, et-cetera also. But yes, as of now, that has come down.
Shravan Shah
Yeah. So sir, just broadly looking at post the both Silcher and, we will be reaching to close to 11.67 million ton capacity at a cement level. And so to reach a 20 million tonnes, so that is a kind of 8 million, 8.3 million kind of additional capacity we need. And in terms of the timeline post FY ’27, it will be just a three year. So obviously, we need to start doing a capex. So just trying to understand broader level, if somebody wants to understand how much capex we would be needing to reach a 20 million tonne capacity.
Dilip Kumar Agarwal
So see, as of now, so-far as cement is concerned, we are already close to 8 million 7.7 MTPA precisely. Another 4 million will get added in and. So it will give us number of around 12 million. And how much is that. So-far as 20 million by 2030 is concerned, so instead we are left with six school years to conceive a start and complete the project and with our experience of rolling out the project we do not find any issue in reaching that projected capacity. So-far as capex is concerned, so you can calculate it the way now with this cost per ton of cement is coming so-far as rolling out a greenfield project is concerned. So that the number should be around that only.
Shravan Shah
So is it fair to assume a INR900 crores INR2,000 odd crore for greenfield of kind of 1 million ton kind of a capex? That’s the way one can look at? Yeah, or it would be a INR700 crores INR800 crores.
Manoj Agarwal
Yeah, you can consider because 1 million it is a capacity is bigger than the average will come or down that.
Dilip Kumar Agarwal
I think for a 2 million — 3 million tonne grinding 500 million. So the last project which we have commissioned, this is only clinker 3.3 million. So the cost was around INR1,300 CR and if you add cement of similar, then maybe say another 600, 600 CR, so 200 CR, 2,000 CR you can consider for around 3 million ton of. So you can calculate the number accordingly. So for around 4,000 CR you can assume.
Shravan Shah
Okay, got it. But just trying to structurally, so obviously, the Northeast is the highest in terms of the profitability. So now we move the — I assume that the entire new capacity would be coming outside Northeast, so including the Rajasthan one. So don’t we think that in terms of the ROE, ROCE that would be a kind of a lower versus what right now we would be getting at the Northeast business?
Dilip Kumar Agarwal
As you know that cement is a business of volume and if you are getting a good EBITDA in Northeast and not fairly that kind of EBITDA in the West of Northeast or West of East also. But on a blended basis, you will find that if you consider Northeast also, then we should — we should point out better than what is happening today in the cement industry.
Manoj Agarwal
And you still three because Pakistan will take three years time and then who will know what is happening in the market in two, three years because prices where it will go because obviously prices will going to increase from here because everybody’s cost will going to increase after in 2030. So prices, nobody knows to predict what is the market demand and prices? That is one.
Dilip Kumar Agarwal
And secondly, in industry, lot of consolidations are happening, you know. So I don’t think there should be much of bidding on prices.
Shravan Shah
Got it, got it. And in terms of the incentive now for this quarter 43, so we were previously looking at INR200 odd crore annual. So from this quarter, 4th-quarter onwards, kind of INR50 crores INR60 crores on our quarterly run-rate.
Dilip Kumar Agarwal
Yeah. See, everything is related with volume. As we said earlier that we had a volume constraint because of our stabilization of the unit. So that is why this 43 you are looking at. But in the coming quarter — each quarter it should be 50 cr plus.
Shravan Shah
Got it, got it. So that’s what I’m just trying to understand, sir, even let’s say, in the 4th-quarter, if you would be doing a whatever you said kind of a 10% kind of a growth, so would be a 1.5 million, 1.6 million-odd ton. So even if I just do the math, so next year we should be doing a minimum 5.5 million to 5.7 million ton, which should be a kind of a closer to a 20% growth, but we were saying just a 12% kind of a growth.
Manoj Agarwal
Because we will be considering maybe at least whatever we are projecting 12% to 15% growth over the next year we are projecting — we will be targeting. If the market grows better than this, then obviously because then it may increase, but we are targeting 12% to 15% for the next year. Maybe this year we go down to 4.7% then you can take it 15% from here. So 5.5%, 5.4%, 5.5%.
Shravan Shah
Yeah, got it, sir. Thank you, sir. All the best.
Operator
Thank you. The next question is from the line of Milind Raginwar from BOB Capital Markets Limited. Please go-ahead.
Milind Raginwar
Yeah, hi, sir. Thanks for this opportunity. So essentially the headroom that we have around 4, 7, 4.70.
Operator
Your voice is very good.
Milind Raginwar
Hello.
Operator
Please proceed.
Milind Raginwar
Hello.
Operator
Sir, please proceed. You’re audible now.
Milind Raginwar
Yes. So for 4.7, 4.8 of the kind of capacity that utilization at that level would be still much lower than what our capacity currently is for FY ’24 at around 7.7. Now we are taking two big leaps in FY ’26 and ’27, we’ve moved to around 2 million tons each in FY ’26 and ’27. So can you just call-out on the kind of you know the growth scenario, demand scenario or a major — major capex program of the government as well as some private capex that’s happening so that we can get some fair idea on how the demand would be in the region?
Dilip Kumar Agarwal
Yeah. Actually, you might have seen that the kind of budget allocation the central government is doing for office infrastructure development very recently I had a meeting in government last week only and we have been given to understand that their infrastructure projection of — for the North City is 1 lakh CR. So — and the kind of development, it’s not only the numbers what they are saying, we are also witnessing on-the-ground projects coming out and getting rolled-out. So we are expecting a good growth in infrastructure sector and that is why we have planned two grinding units, looking at the growth prospect is one in future and one in.
Let me add here that is a kind of location, it is called Upper Asam. So Upper Asam is the lead distance from Kohati to Johat is around 300 kilometers. So that will give us an added advantage in the catchment area of Johat markets where we can push directly our brand to the catchment area of Johan. And lot of infrastructure projects are coming in Joha side also and in this proposed branding unit at side also. So we are expecting a good growth in non-trade segment and that is why these two projects have been planned and now in the process of getting rolled-out one after another. So we are not expecting — we are coming to your question that sudden jump-in. So we are expecting that we should be able to utilize the capacity in both the plants gradually. And in three, four years, I think from now or — and by the time this capst will be commissioned in FY ‘2 — sorry, future in FY ’26 and in FY ’27. By that time growth will — some growth will always be coming. And then after that in next two, three years, we’ll be able to utilize our capacity fully. That is what we expect as of now.
Manoj Agarwal
And one thing to add, because season — it is a cement is there which kind of seasonality is there. So at time you can use 100% because even if you are yearly, you will be adding 70% capacity, but in-season time, you’re using it 100%. So that is the thing in general, you are working only at 75%.
Dilip Kumar Agarwal
Unless you have a — you have a — I mean surplus capacity, you won’t be able to serve the increased demand during the segent time post October or with — from early November till April. So to take care of those demands, you have to have the okay.
Milind Raginwar
That was quite helpful, sir. The second thing I wanted to understand was you had given — you have called out on the other expenditure one-offs and also on the RM cost. Similarly, the freight, anything that you would like to call-out on the savings that we would be having in the 4th-quarter over 3rd-quarter?
Manoj Agarwal
Freight cost, two things are there. One is there because we have added 120 vehicles, okay, for — because the new plant, plant because we have a requirement of more. So we have used — we have been using our own plate for carrying of clinker so that only not only that we have the flexibility of using up plate first gliding, but still because we can take on the competitors so that we cannot increase much of the freight. We cannot that we can bargain better negotiation with the transporters. So that is a one-plus advantage and we are seeing is that we are getting a very good what you can say, when we setting in when we are operating our fleet. So that is the one thing which would be — because the will be because now the roads are okay and all this. So we will be getting that advantage to keep advantage from this using the entire fleet.
And in addition to that, because, because the March will know because January to March quarter, generally there is some increase in the freight will be there because everybody has a year-end pressure. But we think that there maybe might be some increase in our overall number, there may be some degree, but it is not so significant. Maybe normal thing.
Milind Raginwar
That we are about five weeks in the in the what would be the pricing over the average of the of the 3rd quarter?
Manoj Agarwal
Average prices was what you want to NOD prices. Can you speak bit loudly?
Milind Raginwar
So am I audible now? Yeah, please.
Dilip Kumar Agarwal
Yeah.
Milind Raginwar
So I was just coming to — now that we are under about five weeks in the 4th-quarter, what would be the pricing scenario over the average of 3rd-quarter?
Dilip Kumar Agarwal
As I said earlier, in the markets of Northeast, prices are more or less stable. From here, there should not be any bidding, rather we are expecting some growth in prices. Similar is the kind of story is there in rest of East also. From here now on in rest of East, I mean Bihar and Bengal market where we are there. We are expecting a stable kind of prices.
Milind Raginwar
Okay. Okay. Thank you so much, sir. Thank you so much. That’s it from my side.
Operator
Thank you. The next question is from the line of Uttam Kumar from Axis Securities Limited. Please go-ahead.
Uttam Kumar Srimal
Yeah, Manoji, what would be our gross and net-debt currently?
Manoj Agarwal
Gross end? Net-debt?
Uttam Kumar Srimal
Yeah, debt.
Dilip Kumar Agarwal
Gross and net-debt. Sorry.
Uttam Kumar Srimal
Gross in net-debt in the books of net-debt.
Manoj Agarwal
Okay, okay. So we have a total INR420 crore is currently this number is around INR400 crore INR420 crores and maybe that is around INR400 crores.
Uttam Kumar Srimal
I mean, that is around INR400 crores. Yeah. Okay, okay. And sir, in terms of how much Assam, especially Assam region would be contributing to the Northeast revenue.
Manoj Agarwal
Around — it should be around 55% or so, 55%.
Uttam Kumar Srimal
Okay. Okay, sir. That’s all from my side. Thanks.
Operator
Thank you. Thank you. Ladies and gentlemen, this will be the last question for today, which is from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Sir, last two things first. Currently or maybe for the 3rd-quarter average, just if you can tell us in terms of the trade and non-trade price gap in the northeast.
Manoj Agarwal
Teade prices are generally INR25 to INR30 gap is there that.
Dilip Kumar Agarwal
See as of now trade to non-trade gap is 25 or maybe a bit more also but with the coming increased capacity of ours, the gap may further increase, but not much. But on a — on a normatic basis, it is around INR25 to INR30 only.
Shravan Shah
Got it. And secondly, sir, if you can just help us the new clinker that we have started 3.3. For 3rd-quarter, how much we would have produced or entire the production that we have mentioned, 6 lakh 42,000. So how much from that the new plant?
Dilip Kumar Agarwal
I think we should be able to utilize around how much?
Manoj Agarwal
Because this quarter because stabilization issue are there, but we will be utilizing 70 a month this quarter we are hopeful that it will be 70% 75% will be utilizing this quarter.
Shravan Shah
No, that I understood that now the stabilization has happened, so the utilization will increase. So just trying to understand for 3rd-quarter, how much we would have tradition. So was it some production was there or there was nothing.
Dilip Kumar Agarwal
Line-3 was actually not much, much number so-far as in 3rd-quarter.
Manoj Agarwal
Right now we don’t have the number, okay.
Dilip Kumar Agarwal
But 3rd-quarter actually in the first month itself, this issue came up and it is lingered upon almost two months, I believe. So 3rd-quarter Line-3 number is not yet, I don’t — we don’t have separately that number as of now.
Shravan Shah
Okay. Directionally, just wanted to understand, but going-forward now as we say that we will be using 17% to 17% more than we are expecting ready? No, no. So what I’m trying to what.
Dilip Kumar Agarwal
The plant is performing well now and we are witnessing a good performance as of now. So we don’t foresee any issue here on now so-far as capaculation is concerned. Offline.
Shravan Shah
Yeah, got it, sir. But what I’m trying to understand is that the old one, the 2.8 million ton clinker that the old plant. So once we use this new one, 70%, 75%, so are we also significantly reducing the utilization of the old plant?
Manoj Agarwal
Because clinker is always in-demand.
Dilip Kumar Agarwal
As of now, we are operating all the free lines. We are not expecting — we cannot say about the off-season time of any season as of now. But so-far as season time is concerned, all three plants run.
Shravan Shah
Okay. Okay. Thank you.
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, Michel. Sir, I have one question, especially for Vilip sir. Vilip, sir, I believe you have spent very long years in the cement industry and you were a star Cement in your past also and then you joined some other cement company and then you came back to Star Cement and this is your first public appearance after joining star Cement. So I just — you categorically clarified on this call that Ultra Tech buyout in 8% buyer in the star cement is nothing that calls for any anything more to think or think at this point of time. But I want to know from you that because you’ve spent so much, so many long years in Northeast cement industry, how do you foresee the Northeast industry in terms of consolidation? Do you see that there are other smaller players in the industry who are — who are being targeted by larger players or do you think that their promoters might exit or there is something on the cards in the consolidation Northeast India, what is your say about broader Northeast market, not just about Saa cement.
Dilip Kumar Agarwal
See, so-far as consolidation is concerned by you are aware that most of the are there so-far as cement is concerned in Megalia only because of proximity of raw-material. And if you take Histar and Dalmia, both taken together in the complete capsty of the Northeast, they fit-in around 60% of the total capsty. And there are around eight or nine operating plants in restall are very small — a smaller one. So I don’t think if anybody goes for a consolidation. First of all, I don’t think there is any opportunity that buying out or consolidating so-far as a smaller — a smaller — all of them — most of them are less than 1 million ton plan, right? So that is one. So that kind of opportunity, I don’t think that it exists, number-one.
Number two, putting a new plant for a new company or outside company, you know that they are as compared to rest of India, Northeast poses a lot of challenges in terms of in terms of land acquisition, local issues and all. So the things are not on the very brighter side so-far as consolidation or putting a new plant is concerned. If you go and put a new plant, if you are able to do it considering all the hurdles also, then also minimum four to five years is the minimum timeline. So I don’t think that in the immediate future or near-future, something big is going to happen in Northeast. So-far as capstage for consolidation is concerned. Dalmia is already is expanding. We are also — we have expanded and we are also expanding in Northeast. There is some more little expansions coming up in the existing plant, but not of that great capstage. So I don’t foresee any challenge so-far as a so-far as surplus capstage is concerned.
As I told you that the in infrastructure, there is a lot of infrastructure activity going on and government of India is focusing upon Northeast so-far as infrastructure growth and budget allocation is concerned. And it’s not just for the sake of saying, it’s happening also on-the-ground and we are able to see the way it has been panning out in Northeast. So on the demand-side also, we are expecting a good number to roll-out in coming years, good growth in that demand. So that is what I foresee. I have been working in-office marketing from last 14, 15 years as you know. So the kind of growth we are able to see now as compared to previous years, it keeps a very promising future so-far as cement industry is concerned.
Vaibhav Agarwal
I take your point that capacities in Northeast are quite small in terms of the size, they are mostly one to 2 million tons or maybe half a million ton kind of capacity also. But having said so, related to the size of the market, the size of the market itself is quite small versus the rest of the India. So from that perspective, don’t you think that even if the or like 1 million or couple of million ton capacity is available, larger players might be interested in taking them out or don’t think so.
Dilip Kumar Agarwal
See, I don’t know whether the largest player would be interested in adding up 0.5 or 0.7 million ton or even 1 million ton. There is no cement plant except us and, there is only one that in the cement they are having around 1.1 million or 1.2 million ton steel. Rest all are less than 0.7 million or 0.8 million tonnes. So I don’t think any — even if larger player comes and they consolidate also, then the will remain the same and installed will remain the same. If you are going to — if you are going to install a new cement plant of say two, 3 million, it will take four, five, six years of time, not less than four, five years. If you start event today from scratch, then there are issues related to mining et etc, getting mining clearances. So these are very long-time taking issues and I honestly I don’t see any that kind of growth opportunity so-far as capsti decent buy some.
Vaibhav Agarwal
Got it, sir. Got it. Thank you very much, Dilu, sir. And on behalf of Phillip Capital, I would like to thank all the participants joining the call and also thank the managed for the call. Thank you very much, sir. And Michel, we may now the call. Thank you.
Manoj Agarwal
Thanks to all the participants from also.
Dilip Kumar Agarwal
Thanks for moderating and committing the call.
Vaibhav Agarwal
Thank you.
Operator
Thank you so much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.