UltraTech Cement Ltd (ULTRACEMCO) Q1 FY23 Earnings Concall Transcript

UltraTech Cement Ltd (NSE: ULTRACEMCO) Q1 FY23 Earnings Concall dated Jul. 22, 2022

Corporate Participants:

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Analysts:

Pinakin Parekh — JPMorgan — Analyst

Sumangal Nevatia — Kotak Securities — Analyst

Amit Murarka — Axis Capital — Analyst

Indrajit Agarwal — CLSA — Analyst

Prateek Kumar — Jefferies — Analyst

Ashish Jain — Macquarie — Analyst

Unidentified Speaker —

Satyadeep Jain — AMBIT Capital — Analyst

Girish Choudhary — Spark Capital — Analyst

Navin Sahadeo — Edelweiss Securities — Analyst

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

Rajesh Kumar Ravi — HDFC Securities — Analyst

Ritesh Shah — Investec Capital — Analyst

Pulkit Patni — Goldman Sachs — Analyst

Bhavin Chheda — ENAM Holdings — Analyst

Shravan Shah — Dolat Capital — Analyst

Sanjay Nandi — Ratnabali Capital Markets — Analyst

Akshata Telisara — SBI General Insurance — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the UltraTech Cement Limited Q1 Earnings Conference Call. We must remind you that the discussion on today’s call may include certain forward-looking statements and must be therefore reviewed in conjunction with the risk that the Company faces. The Company assumes no responsibility to publicly amend, modify or reverse any forward-looking statement on the basis of any subsequent development, information or events or otherwise. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]

I now hand the conference over to Mr. Atul Daga, Executive Director and CFO of the Company. Thank you, and over to you, Mr. Daga.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you. Good evening, ladies and gentlemen, and welcome to this call of UltraTech for our results for April-June quarter. I think I will focus on three issues today: demand, costs and our growth plans. Demand is good. Costs, as you all know, have not been very good, and I don’t know how things will pan out in future. And growth prospects, as we see, are very good. We are happy to see the cement consumption in this current quarter — the reported quarter, April-June quarter, continuing the momentum after a strong performance in Q4. Month-after-month, we saw improvement in demand in cement consumption. The good part about this cement cycle is that urban housing has picked up in the last few quarters.

The unsold housing inventory is at its record low. They are coming into effect. There has been a reduction in number of unorganized real estate players, clearing the path for time-bound completion of residential projects. The number of new project launches has also been on the rise, which will benefit cement, of course. Mind you, these are announcements in real estate projects. After the announcement of real estate projects, there is still lead time before cement actually starts consumption, cement consumption actually starts on each project site. There is a negative impact on the purchasing power to invest in housing, but I believe demand is resilient.

Large infrastructure projects like high-speed Mumbai-Ahmedabad train, coastal roads, Jewar Airport, Mumbai Airport, to name some of them, leading to an overall growth in cement demand in the infrastructure space. With a lot of ancillary projects getting seeded, which generate employment, income generation and, of course, housing growth. The government’s thrust on infrastructure growth is very much there and most welcome. Prices have been good, but like anyone else, we would also want them to be better, given the inflationary trend in costs.

Now let me talk about the not-so-good news, which is input costs. Costs have been rising continuously. Fuel and energy costs have been a matter of concern for all players. Production costs have risen about 7% this quarter. The effect of rising costs have been mitigated by improvement in procurement prices, improvement in efficiency and better planning. Everyone knows that China had a significant influence on most of the commodity prices. Good news is that China’s domestic coal production at a high of 395 million metric ton in March before slipping to 362 million metric ton in April. The average monthly production is trending 12% higher year-on-year. However, I understand that China has cut import tariffs for all types of coal to 0% [Phonetic] from May 1, ’22 to March ’23 as compared to the tariffs of 3% to 6% on imported coal depending on its quality. This might still lead to a jump in exports to China, thereby leaving prices inflated for some more time.

Good news is that petcoke prices have started softening. We have seen maybe about 10% reduction in the prices over the last month or so. Hopefully, coal will also follow suit. On an average, UltraTech would require about 13 million tons to 15 million tons of fuel per annum from FY ’24. With that kind of requirement, obviously, we are planning our procurement strategies, inventory management plans, alternate fuel plans, WHRS efficiency improvement plans as best as we can to soften the impact of rising costs.

I would want to clarify on the news flow around Dalla Super, the JP unit, which we had acquired in 2016. It was in — it stuck in entity issues. It is the last leg of forex clearances. You will recall, we have held back INR1,000 crores from the original consideration paid in June 16 [Phonetic]. After settling all these costs pertaining to forex clearances, land acquisitions, the converged monies will be released to the sellers at the time of taking over the asset. I realize this has got delayed. It’s almost been five years. But trust me, we are clearing all the hurdles step-by-step. At this point in time, I don’t want to give you any timeline on final clearance. Because every time I have committed, I have not been able to deliver on those timelines.

These things are not in our control. There are lots of government or regulatory clearances that have to be taken. But I am hopeful that we should be able to clear everything and the asset should start production before the end of this calendar. There have been several theories during the rounds on our 22.6 million ton expansion announced last month. I must tell you that it is a very well thought out plan step. It is part of the earlier announced 50 million ton growth plan. The news announcement of the 22.6 million ton expansion was perhaps delayed by a month. We were contemplating the go ahead as part of our Q4 Board meeting — Q4 results Board meeting. But we went slow on it since there was news about Holcim assets being — Holcim assets, the transaction happened and we were also interested in looking at those assets.

Anyway, that is history now, and we have got back into our stride. The delayed cost in announcing the plans will not be a bottleneck to meeting our overall timelines to commission all the projects by ’25, ’26. Work is in full swing on the ordering process. In fact, lots of orders have already been — our project items have already been ordered, advanced payments are being released. All these expansions are predicted — predicated on our fundamental philosophy of profitable growth. Expansions are not just — not done just to add capacity, but to generate profits. These investments are targeting an IRR in excess of 15% as and when — from ’26 onwards when they start delivering production, thus helping the overall balance sheet also improve its return ratios.

The internal accruals will be sufficient to meet all the capex requirements. At this juncture, my colleagues are reminding me of a unique and a creditable achievement of the Company. The growth since inception have all been funded through internal accruals. Why this expansion? India will remain a strong market — growth market for a long time to come, and after completing this expansion, we will chart out our roadmap to rise from 153 million tons to about 200 million ton mark through organic and inorganic routes. Don’t ask me questions now. It’s work in progress. And we’ll come back to you with details in due course of time and tell you all about it where, when and how.

That’s all from my side for this quarter results. Over to you for questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Pinakin Parekh from JPMorgan. Please go ahead.

Pinakin Parekh — JPMorgan — Analyst

Sure, sir. Three quick questions. My first is that you mentioned 153 million tons to 200 million tons, now obviously, that we don’t expect any details, but is this part of the 2030 timeline, or is this something which can be preponed even before 2030?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It’s — it can be preponed, but whether it is ’28, ’27-’28, ’28-’29, somewhere around those timelines. So — because after completing our ’26 — the current expansion of ’26, we will see how the markets are shaping up. We start preparing for that plan for ’28 now and decide on the next steps somewhere around ’26.

Pinakin Parekh — JPMorgan — Analyst

Okay. Because I’m just trying to put the numbers in context, 153 million tons to 200 million tons is 47 million tons, right? If you’re thinking to add by ’28 or ’29, you would have to start — if it’s a large part of it is organic, you will have to start the process of land acquisition mines, ordering and stuff like?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So land acquisition is a continuous process, Pinakin, which keeps on happening, and that’s why we are able to cut short the project execution time. When we announce our expansion plan, we would have completed our mines, land acquisition, environment clearances already.

Pinakin Parekh — JPMorgan — Analyst

Sure. My second question is, sir, on the Phase 2 expansion, Slide 28, which gives a breakup between integrated units, grinding units and bulk terminals.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah.

Pinakin Parekh — JPMorgan — Analyst

Now it mentioned that bulk terminals is not additional capacities, but bulk terminals is around 2 million tons of this 22.7 million tons. So how…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Correct — no, no, no, no, no. If you sum up all these 4.4 million tons, 5.7 million tons, 5.2 million tons and 7.3 million tons, that’s 22.6 million tons. But if you look at, let’s say, South, sum up all the four line items, it’s much more.

Pinakin Parekh — JPMorgan — Analyst

Okay, okay, fair enough. And can you give us, lastly, a breakup of this 22.6 million tons in terms of what is the clinker capacity of this?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It’s backed by full clinker, that’s all I can say right now.

Pinakin Parekh — JPMorgan — Analyst

Okay, understood. Thank you very much, sir.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

All right.

Operator

Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.

Sumangal Nevatia — Kotak Securities — Analyst

Hi, yeah, thanks for the opportunity, and congratulations on a good set of numbers, notwithstanding the cost pressure. Sir, first question is on the cost. A bit surprised to see only a 10% sequential increase in the coal cost this quarter, so — and great level on the cost management. Given the inventory and the total visibility we have, is it possible to give some guidance on the coming quarter, how do we see the energy cost moving and the mix of coal?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I find it very difficult. I — it was, I think last quarter, I gave a guidance of 10% increase and I barely managed to be there. Becomes very difficult to predict cost. Of course, the costs will get locked for the quarter in the next few days. But at this point, I would rather avoid doing forecasting and let me stick to the results.

Sumangal Nevatia — Kotak Securities — Analyst

Okay. But just for understanding, I mean what sort of inventory and the lag is there in petcoke and international coal, is it…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We could have 50-plus days of inventory at the close of the quarter — close of June. And sorry, what was the next part of your question?

Sumangal Nevatia — Kotak Securities — Analyst

Yeah. So, 50 days, right? And it would be same?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah.

Sumangal Nevatia — Kotak Securities — Analyst

And would be same for petcoke and thermal coal or it’s some bit?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Fuel, fuel, fuel mix is what I’m talking about.

Sumangal Nevatia — Kotak Securities — Analyst

Okay, okay, understood.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

And so it’s, all our plants are multi-fuel, so we can fire anything.

Sumangal Nevatia — Kotak Securities — Analyst

Got it. Second question is more broadly on the industry supply dynamic. So I mean, the — I think the new entrant and also many other players might be a bit aggressive on the growth, given the balance sheet across is in good shape for the sector. But do we see a risk of increasing supply pressure and low utilization?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

No, I don’t think so, Sumangal, because you will have to wait and watch for the next few quarters to see how the balance sheet shape up, given the cost pressures that are being faced. As also even if new capacities are added, I believe that new demand will continue to surpass the new capacity addition.

Sumangal Nevatia — Kotak Securities — Analyst

Understood. And then just last thing, I mean, are there any assets, will they come up anything on the block for inorganic opportunity?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Of course, there must be.

Sumangal Nevatia — Kotak Securities — Analyst

Okay, nothing more than that. Okay, all right, thanks, thanks a lot. That’s it, Daga, and all the best.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thanks, Sumangal.

Operator

Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.

Amit Murarka — Axis Capital — Analyst

Yeah, hi, all, great set of numbers. So just a few questions. Firstly, on this capacity, like, while it will come up…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I’m losing you, Amit.

Operator

I’m sorry to interrupt. Mr. Murarka, we cannot hear you, sir.

Amit Murarka — Axis Capital — Analyst

Can you hear me now?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah.

Amit Murarka — Axis Capital — Analyst

Yeah, sorry. Yeah, so, like on the timelines, just wanted to check, like by — what is the phaseout of this Phase 2, like, will it be all at the end of the period mentioned or will it come during — like a spread out during this period?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Which one? The Phase 2 expansion, it will be spread out.

Amit Murarka — Axis Capital — Analyst

Yeah, yeah, Q1 rates.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It will be spread out. It cannot be one quarter.

Amit Murarka — Axis Capital — Analyst

Okay. So is there any breakup as of now available or we’ll have to wait for that then?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I think let’s project work start, right now in the ordering stage, because main equipment, all main equipment have got ordered or will get ordered by the end of this month for all the plant locations. So in the next couple of quarters, we should be start growing timelines as well.

Amit Murarka — Axis Capital — Analyst

Okay, okay. And what will be the revised FY ’23 capex number now?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I’m sorry?

Amit Murarka — Axis Capital — Analyst

The FY ’23 capex guidance, that must be revised now, right, after the peak.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. It’ll go up, I think plus/minus INR6,000 crores, I would say.

Amit Murarka — Axis Capital — Analyst

Right. And what would be the trade mix in the quarter?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Trade mix, 57%.

Amit Murarka — Axis Capital — Analyst

Okay, thanks. I’ll come back in the queue. Thank you.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Blended ratio is 70%.

Amit Murarka — Axis Capital — Analyst

Okay, got it. Thank you.

Operator

Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.

Indrajit Agarwal — CLSA — Analyst

Hi, good evening. Congratulations for a great set of numbers. I have a couple of questions. First on the expansion…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

[Foreign Speech] great set of numbers.

Indrajit Agarwal — CLSA — Analyst

Sir, amazing set of numbers.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

All right, all right, go ahead.

Indrajit Agarwal — CLSA — Analyst

So the numbers — so your capex is at $75 per ton. We have seen some other players doing at a much higher number. So what do you think the replacement cost for industry now is? I understand part of your land acquisition is done, part of it is brownfield. So how do you see the replacement cost…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I would — if you have to start from scratch today and on the current prevailing prices, I would peg it anywhere between $100 — plus/minus $110 to $120.

Indrajit Agarwal — CLSA — Analyst

Sure. That helps. And secondly, as we are already planning for 2030, we will also have some limestone mines expiring by that period. So how are we planning for that, any thought process, any strategy we are adopting?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So I have two mines expiring and they will be ROFR, obviously, with the existing players. So we will secure those mines. What is required for us is to get more mines in the locations that we are blueprinting now. It’s too early, but I thought — the importance of tabling our growth plans 2030 was — so that you are not caught by surprise later on that, it’s — or was not talked about. So anyway, limestone is secured. There are two mines which expire, which we’ll have ROFRs 2030, cost of operations for every player will go up. So we’ll…

Operator

I’m sorry to interrupt. We lost the line of the management. Please stay connected while we reconnect them. Ladies and gentlemen, thank you for patiently holding. The management line is reconnected back. Thank you, and over to you.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Sorry, there were a freak power failure on my handset. You were asking about our preparedness — sorry, we talked about costs of a greenfield and our preparedness, so we will be prepared as and when time comes.

Indrajit Agarwal — CLSA — Analyst

Sure. One last question, we generally see a bump-up in demand in the pre-election year. So are you getting some kind of sense of that already or too soon to tell?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I have reasons to believe that there are 20 months left pre-election and there is a huge amount of tailwinds for demand.

Indrajit Agarwal — CLSA — Analyst

Got it. That’s all from my side. Thank you so much.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.

Prateek Kumar — Jefferies — Analyst

Yeah, good evening, sir. Congrats for great results. First question is on — you have mentioned about overall utilization of 83%. And I believe your quarter-on-quarter grade realizations are up 7%. Can you split this region-wise, utilizations and realizations Q-on-Q?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

For fuel, North and Central would have gone up in double-digits, West and East might be 5%, 6%, South was flat.

Prateek Kumar — Jefferies — Analyst

Our realizations would be like better than industry growth, because a couple of peers of yours reported like 4%, 4.5% sequential growth this quarter?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

My peers, okay, I don’t know who my peers are. But yeah, I think we should report good numbers.

Prateek Kumar — Jefferies — Analyst

Sure. And secondly, when we say, on these expansions, we have a 15% IRR post FY ’26. What kind of unit EBITDA we are like assuming for these expansions corresponding to the volumes already?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

No, I think you can do your back calculation, INR12,866 crores delivering a ROCE of 15% plus, would generate a INR1,500 crores [Phonetic] or thereabout, INR1,400 crores [Phonetic] to INR1,500 crores [Phonetic] EBITDA.

Prateek Kumar — Jefferies — Analyst

Sure, sir. And last question is on…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We are looking at that number for ’26, sir.

Prateek Kumar — Jefferies — Analyst

Right, right. And lastly, on realizations, while we had a very strong Q1, how would the exit realizations of June quarter versus average for the quarter?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

June were — June exit was slightly less. I think, yeah, when monsoon starts kicking in, realization starts dropping, maybe 3% to 5% lower what we get from the chart. Anything else?

Prateek Kumar — Jefferies — Analyst

So 3% to 5% versus average, that’s what you said?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yes, yes.

Prateek Kumar — Jefferies — Analyst

Sure, sir. These are my questions. Thank you.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Ashish Jain from Macquarie. Please go ahead.

Ashish Jain — Macquarie — Analyst

Hi, sir, good evening.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Hi.

Ashish Jain — Macquarie — Analyst

Sir, firstly, on the — on expansion. So I just want to understand like earlier when in December, we had announced the expansion, we had spoken about 160 million tons by 2030. And now we have, in a way, raised that to [Technical Issues], that’s like a major increase?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. Because we are seeing — see, we don’t want to fall short of capacity. And we are seeing — I’ve also given a demand outlook.

Ashish Jain — Macquarie — Analyst

Right.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So if that demand outlook is there on a CAGR, we will not have capacity to service if we don’t expand.

Ashish Jain — Macquarie — Analyst

Okay. And what — sir, what headroom we have on brownfield or greenfield based upon limestone mines that we own?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We’ll share that offline with you.

Ashish Jain — Macquarie — Analyst

Okay, okay. Got it. Got it. And sir, lastly, on cost. I mean, I understand you don’t want to give a forward number, but where would our costs be, let’s say, for June month or the first month — the first three weeks of July in terms of the energy cost versus what we were consuming in June [Technical Issues]?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Daily, it is going up or…

Ashish Jain — Macquarie — Analyst

Okay, sir, let me put it like this. So…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

You — I think let’s stick to a quarter instead of the month or the day or the week.

Unidentified Speaker —

It is volatile.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah, it’s very volatile.

Ashish Jain — Macquarie — Analyst

Okay, okay, got it. And just one housekeeping question, where are we — what is our net debt at the end of this quarter? We haven’t shared it at least…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Sorry. I think there were too many slides. Net debt has gone up slightly. We are at INR5,561 crores [Phonetic] on a consolidated basis and India is INR4,670 crores [Phonetic].

Ashish Jain — Macquarie — Analyst

Okay, got it, sir. Thanks a lot. I’ll come back in the queue. Thank you.

Operator

Thank you. Next question is from the line of Satyadeep Jain from AMBIT Capital. Please go ahead.

Satyadeep Jain — AMBIT Capital — Analyst

Hi, thank you for the opportunity. A couple of questions on the Slide 28. On the — some details on the expansion, in South, you’re adding GUs, especially — some of the GUs — one of the GUs is actually far from Andhra Pradesh. Are you looking to add clinker in Tamil Nadu in this one or is the — are the new GUs going to be served from Andhra Pradesh?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We will serve it from APCW, the IO, which is Andhra. We are also participating in auctions and mines auction in Tamil Nadu.

Satyadeep Jain — AMBIT Capital — Analyst

Okay. Because the — one of the GUs, Karur is actually sort of 600 kilometers from APCW.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I know, I know. I am fully aware, and our plan is that we’ll have the bulk terminal at Bangalore, from there it can service, directly also, it can service.

Satyadeep Jain — AMBIT Capital — Analyst

Okay. And you’re also banking on possible auction wins also to support some of the GUs?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I’m sorry, banking on?

Satyadeep Jain — AMBIT Capital — Analyst

Possible auction wins in the auctions…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yes, yes, certainly, certainly.

Satyadeep Jain — AMBIT Capital — Analyst

Okay. Next question, just a couple of questions on the entire capex. One is, somewhat surprising to see a greenfield. Are you in Chhattisgarh, the — given you already have GU clinker plants in — within 10 kilometers, 15 kilometers of that current plant?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. So it helps me leverage on economies of scale big time. And we will — if you look at the next chart, which is Page 29, the focus is now how we’ll service the Northeast market. So the extreme East plants, which is West Bengal plants will start catering to Northeast, so that capacity is available from here to service the other markets.

Unidentified Speaker —

And moreover — Atul, if I may add actually. The limestone is available only in the Chhattisgarh in the East actually.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Chhattisgarh.

Unidentified Speaker —

So people have no choice other than to put up the clinker facility…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Clinker operation will be in Chhattisgarh.

Unidentified Speaker —

Chhattisgarh only. There is no limestone, Bihar, Jharkhand, Bengal, Orissa, even a very limited quantity. So Chhattisgarh is a natural choice for clinkerization units.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We have similar concentration in Satna. We have three units there. So it also has economies of scale.

Satyadeep Jain — AMBIT Capital — Analyst

My question was why not do a brownfield in Hirmi or the other…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We are just completing a brownfield in Hirmi, the clinkerization got commissioned, I think last month, and cement will get commissioned this month or next month perhaps.

Unidentified Speaker —

Yes, yes, next month itself, yeah.

Satyadeep Jain — AMBIT Capital — Analyst

Okay.

Unidentified Speaker —

Along that limit, one should not also complicate one particular site. So if you have other options, why not pursue those options rather than making a one particular location vulnerable from multiple point of use.

Satyadeep Jain — AMBIT Capital — Analyst

Okay. Lastly on — you’ve done in this round of expansion core totally, but I guess the Nawalgarh, the land acquisition is also complete. Can we — is that going to be part of the…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah, Nawal — so Nawalgarh will form part of my next phase of growth. There are some issues on mines which we are sorting out.

Satyadeep Jain — AMBIT Capital — Analyst

On the mine you said, lands or mine?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Mines, on mines.

Unidentified Speaker —

Mines and land, both.

Satyadeep Jain — AMBIT Capital — Analyst

Okay, sir. Thank you so much, sir.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thanks, Satyadeep.

Operator

Thank you. The next question is from the line of Girish Choudhary from Spark Capital. Please go ahead.

Girish Choudhary — Spark Capital — Analyst

Yeah, hi, thanks. So there was this recent news flow that you bought this Russian coal at $164. So just on this, what would be the landed cost and incrementally, how much more of this low-cost fuel can be replaced with other high-cost fuel?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So $164 is what the cost is and — $168, if I remember it right. And we keep on scouting for opportunities. So there’s nothing inside. It was opportunistic transaction. If something more surfaces, we’ll pick it up.

Girish Choudhary — Spark Capital — Analyst

Okay. So as of now, we have just bought this one, sir?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

157,000 tons.

Girish Choudhary — Spark Capital — Analyst

Yeah, yeah, okay, okay. And secondly, if you can just guide us on the — for the Phase 2 expansion, what would be the capex to be spent over ’23, ’24, ’25?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We have the phasing as yet. I think give me next quarter because we are just in the ordering phase right now. So hopefully, we’ll give clarity on cash flows next quarter.

Girish Choudhary — Spark Capital — Analyst

Sure, sure. Thank you.

Operator

Thank you. The next question is from the line of Navin Sahadeo from Edelweiss Securities. Please go ahead.

Navin Sahadeo — Edelweiss Securities — Analyst

Hello?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Hi, Navin.

Navin Sahadeo — Edelweiss Securities — Analyst

Yeah, good evening, sir. Thanks for the opportunity. Couple of questions. So first, I would request some more details or color about the Slide 8, wherein you’re talking about electrification of cement kiln heating process. So I just wanted to understand, is this like, can this be a big opportunity in the sense, can we really go in for instead of…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yes, it can be. So technical discussions have just started. It’s not happening in the next couple of years. It’s a long-term plan, but the emphasis is that we are making all efforts possible on reducing emissions.

Navin Sahadeo — Edelweiss Securities — Analyst

The next phase of — if at all, there is a next phase of evolution, this can be one of it?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yes, this will be a game changer.

Navin Sahadeo — Edelweiss Securities — Analyst

Okay, okay. Second then, I just wanted to request your views on the overall pricing power in the sense that of late, what we see is that despite the cost rising, we have not really been able to like pass on prices commensurate to the way the cost is. Also understand the government’s focus on inflation, when diesel prices were reduced, there was also an industry reciprocation of passing it on to consumers. So is it safe to say that till such time the inflation stays firm, we should be more looking at cost because prices may not really go up, your views, please?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So, Navin, as of now, I think we would want to balance the cost pressures with prices. And if you look at the current quarter’s performance, the reported quarter’s performance also, it’s been all right. And I’ve always maintained that the price increases will always be with a lag effect. They don’t happen immediately. The efforts will be, at the moment, to cover cost increases — cost pressures with prices.

Navin Sahadeo — Edelweiss Securities — Analyst

Understood. Sir, just one bit on the costing part. Because the prices have been volatile, but of late, we have also seen global prices seeing fair amount of drop. So would you — would it be safe to comment that whatever cost of, like, fuel that we saw in the quarter, is that very much the peak or no, we can still see some decent increase coming into clinker?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Keeping my fingers crossed that we have past the hump. But as of now, at least in the next two quarters or three quarters, we would still see price increases, cost pressures continue.

Navin Sahadeo — Edelweiss Securities — Analyst

For two quarters, three quarters, because, as you said, in just a few weeks, we would have — in just a couple of days, maybe our cost for Q1 gets locked because of that inventory aspect.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah.

Navin Sahadeo — Edelweiss Securities — Analyst

So that will still be on a rising trend for at least one quarters to two quarters?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It will be on a rising trend, for sure. It will be on a rising trend.

Navin Sahadeo — Edelweiss Securities — Analyst

Okay, that’s all I wanted to confirm. Thank you so much. But great quarter by the way.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thanks, Navin.

Operator

Thank you. The next question is from the line of Kamlesh Bagmar from Prabhudas Lilladher Limited. Please go ahead.

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

Yeah. So, first of all, great set of numbers, sir, and congratulations on that. Sir, one question on the part of, let’s say, Phase 2 expansion. So how much is the waste heat recovery capacity included in that?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

In the expansion?

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

Yeah, sir.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

In about 50 megawatts to 60 megawatts.

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

50 megawatts [Phonetic] to 60 megawatts [Phonetic]. And would that be sufficient to reach our target of 45% remuneration?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yes, no, along with that, we will be doing solar as well.

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

Okay, okay. And, sir, secondly, on part of…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Most important — the important aspect to note is that we are not putting up any thermal power.

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

Okay, great, great, great. And sir, on the part of your existing expansion with this Phase 1.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah.

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

So some like say in Cuttack, we have reduced, like we have revised the capacity. So that is coming up with a slightly adjusted another unit. So what has been the reason behind that? Because those capacity expansions have been going for long in Cuttack, particularly in Cuttack?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So, Cuttack, for example, the plan was two lines of 2 million tons — 2.2 million tons each. After looking at the market and opportunities available, I think the team decided that we should restrict ourselves, at the moment, to 2.2 million tons only at Cuttack.

Unidentified Speaker —

2.8 million tons.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

2.8 million tons, sorry, 2.8 million tons.

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

And sir, lastly, the way Phase 2 expansion is, like there is going to be a far higher level of blending ratios as compared to what we are at currently, because, like we are coming up with units in power, where grinding units would be in Tamil Nadu and even in Chhattisgarh and as a few. So would it be like say, how much blending ratio or blended ratio can we presume or clinker conversion ratio in this Phase 2 expansion?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So currently, we are already reaching 70%. On a consolidated basis, we might see a percentage improvement further.

Kamlesh Bagmar — Prabhudas Lilladher Limited — Analyst

Great, sir. Thanks a lot, and best of luck, sir.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Hello?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Hi.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Yeah, hi, sir. My question pertains to first, on the Phase 2 expansion of 23 million ton. So is it fair to assume that it would be backed with 15-odd million ton clinker capacities?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah, plus or minus.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Plus or minus, okay. Second, the blended fuel costs, which you have mentioned, on a per kilocal for Q1, where would that stand?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Per kilocal. So we’ve given the fuel cost, that’s INR1,500 million [Phonetic] — INR2,200 million [Phonetic].

Rajesh Kumar Ravi — HDFC Securities — Analyst

Sorry?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

INR2,200 million [Phonetic].

Unidentified Speaker —

INR2,200 million [Phonetic].

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Rupees per million in kilocal [Phonetic]. Yeah.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. INR2.2 [Phonetic] sort of a number you are talking, right?

Unidentified Speaker —

Yes, yes, yeah.

Rajesh Kumar Ravi — HDFC Securities — Analyst

So why I’m asking this is that given that imported coal prices are currently hovering at north of INR4 and even petcoke prices are INR2.5 after falling off recently. So is it fair to assume that we could see a sustained and sharp hardening in Q2 numbers from INR2.2 north of INR3?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. So as I’ve mentioned in the previous question also, costs for Q2 will go up. I don’t want to give any guidance on the number, but it will go up.

Rajesh Kumar Ravi — HDFC Securities — Analyst

No, because you already have 50 days of inventory almost closer to that. So for most of your Q2, your cost will be secured.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah, it is secured. It will go up. The reported cost will go up.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay, okay. And sir, your net debt number on a Q-on-Q basis would have gone up by INR2,000 crore?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

No, no, no, no, no. About — okay, we’re very close, and INR1,600 crores has gone up on a consolidated basis, but India has gone up by INR900 crores.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. And last question, is the overseas operations — the — if I back calculate the India operations and consolidated, the numbers look quite depressed, what would that be on account of?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So what has happened is we have operations in Sri Lanka, where we had to take a rupee depreciation — the currency depreciation impact of about INR38 crores. Other than that, what — sorry, you are asking about an operating cost, right?

Rajesh Kumar Ravi — HDFC Securities — Analyst

At EBITDA level, the margin would be not more than INR150 per ton for the overseas operations?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah, yeah, yeah. So, the overall, because of Sri Lanka is what we have suffered on the P&L.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. INR38-odd crores for the quarter itself?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It has been provided for currency.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. And the expenses only, other expenses falling off?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah, yeah, yeah, yeah.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay, okay, that’s all from my end, sir. Thank you, all the best.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Ritesh Shah from Investec Capital. Please go ahead.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Take the next one. He’s gone.

Operator

As there is no…

Ritesh Shah — Investec Capital — Analyst

Hello?

Operator

Yes. Ritesh Shah, can you hear me?

Ritesh Shah — Investec Capital — Analyst

Yes, yes. Sorry, I was on mute. So first, congratulations on a good set of numbers. Sir, wanted to understand the price growth, I think it’s pretty stunning, your point compared it with the other listed companies which have reported so far. Anything specific that you would like to highlight, I think would love to hear your thoughts here? That’s the first question.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

About what, numbers peak?

Ritesh Shah — Investec Capital — Analyst

Yes. But sir, how — basically, was it more premium, say, I think that number is something which has been quantified, is there direct dispatches to dealers or anything different on discounting or anything at all…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Ritesh, you look at the number, let us do the business.

Ritesh Shah — Investec Capital — Analyst

That is there. That is there, sir.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. You enjoy the numbers. You — why are you just counting the goodly.

Ritesh Shah — Investec Capital — Analyst

Okay, okay. So has there been any shift in the sales mix basically region wise wherein pricing was more conducive to us, which could have helped us?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

No. So I think there was a question which was asked earlier, North and Central, we were able to get better price improvement as compared to the other markets.

Ritesh Shah — Investec Capital — Analyst

Okay, that’s fair. Sir, second question is, we have announced incremental Phase 2 of growth capex, 22 million tons, what sort of growth optionality do we have after this?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

So, I think you joined in slightly late. I talked about the next phase of growth will take us to 200 million tons. Now somebody had asked a question whether we’ll do 40 million tons in two years, it’s too early to talk about phasing of that, but that is the game plan that we have in place now going to 2030.

Ritesh Shah — Investec Capital — Analyst

Okay, that’s great. And sir, just last question, given we have outlaid our plans on the capacity side. We also indicated capex intensity, which is great. Anything which can actually improve us into our positioning on the cost curve as we expand into — as you continue to expand? Anything from a logistics side, anything that one can look at, say, DFC? Any other variables?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I think as far as DFC is concerned, UltraTech is very well positioned to take advantage. Today, we run more than 260 odd railheads in the country. I think after Coal India, I think we might be having the highest number of — in the private sector, railway sidings. So we will definitely get the benefit of lower costs in terms of movement through railway corridor. Economies of scale will always be a plus point for a large operation like ours, whether economies of buying, economies of logistics.

Operator

Mr. Shah, does that answer your question?

Ritesh Shah — Investec Capital — Analyst

Yes. Thank you so much. Thank you, sir.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thanks, Ritesh.

Operator

Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.

Pulkit Patni — Goldman Sachs — Analyst

Sir, thanks for taking my question. Just one question. What I derive looking at your realization is that clearly, the gap between trade and non-trade is much lesser in the particular…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

That’s absolutely right, absolutely right.

Pulkit Patni — Goldman Sachs — Analyst

Anything structural there for us to…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Structural efforts.

Pulkit Patni — Goldman Sachs — Analyst

Structural efforts. Okay, okay. Any sense on what that gap would be right now?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

$15, $20.

Pulkit Patni — Goldman Sachs — Analyst

Wow, okay, great. Thank you so much for that, sir.

Operator

Thank you. The next question is from the line of Bhavin Chheda from ENAM Holdings. Please go ahead.

Bhavin Chheda — ENAM Holdings — Analyst

Yeah. Sir, congrats on excellent set of numbers. It surprised the Street in all the estimates. Sir, just one question, if you can share the coal mix in the quarter, how much was petcoke, linkage coal, which normally you share in the quarter?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Just one second. 52% is petcoke is what my colleagues are telling me. And no — 52% is petcoke and 37% is imported coal and 5% is domestic coal, balance is…

Bhavin Chheda — ENAM Holdings — Analyst

Okay. So this being comparing to quarter four, the linkage coal was close to 17%, 18%, so it’s gone down further?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Indigenous coal is more at the same level.

Bhavin Chheda — ENAM Holdings — Analyst

Is at the same level. And sir, are you getting any imported coal under long-term contracts? Because it looks like you’re saving a lot on power and fuel as compared to some peers.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. So we have — I was emphatic about our strategies on fuel management, given the quantum of fuel that we consume. So there are lots of efforts which we go — which we’re putting, whether long-term contracts, whether it’s sources of supplies, mix, everything goes on.

Bhavin Chheda — ENAM Holdings — Analyst

Sure. And what would be the lead distance in the quarter, sir, average for the Company?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

About 430 kilometers — 429 kilometers.

Unidentified Speaker —

429 kilometers. Yeah.

Bhavin Chheda — ENAM Holdings — Analyst

Okay. Thanks a lot. Thanks a lot.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.

Shravan Shah — Dolat Capital — Analyst

Thank you. First of all, congratulations on a great set of number. Most of the questions has been answered. A couple of things, sir. Sir, in terms of the capex, the already ongoing 19.9 MTPA. So when we announced, the capex was around INR6,500 crores. So has that number increased or?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

No. It might increase by INR100 crores here or there, but that’s all.

Shravan Shah — Dolat Capital — Analyst

So broadly, you mentioned INR6,000 crores capex for this year FY ’23. So ’24, the numbers would be INR7,000-odd crores, INR8,000-odd crores?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I think the ability to spend also is — capability exists, but ability to spend will also be there on the ground execution. So INR6,000 crores plus/minus should be an annual spend.

Shravan Shah — Dolat Capital — Analyst

Okay. And this entire 22.6 million ton, when we say ’25, but I think in your comments you mentioned maybe by FY ’26.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

’25-’26, because as we progress, we will have more clarity on the exact dates.

Shravan Shah — Dolat Capital — Analyst

Okay, okay. And the other is the — already, clinker that we announced in the 19.9 MTPA expansion. So we have given the grinding expansion timeline, but clinker, if you can help me out, out of that 11.4 MTPA that were we announced previously?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

The upper limit, for example, Hirmi, if you look at, the clinker has already got commissioned. Now there is Pali, which is clinker then — which is in Q3, Dhar is in Q3, others are all grinding units. It’s there in the chart, Page 23, Q3 ’23 is what the other clinkerization commissioning is.

Shravan Shah — Dolat Capital — Analyst

Okay, okay. And just the last, you mentioned that the pricing has gone down 3% to 5% in June versus the average for this quarter. Has it also further reduced the realization in the first 15 days — 20 days of July?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

July is always — so the way the monsoons have been progressing in the country, I think generally, the prices soften a bit.

Shravan Shah — Dolat Capital — Analyst

Okay, okay, okay, all the best. Thank you.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Sanjay Gandhi [Phonetic] from Ratnabali. Please go ahead.

Sanjay Nandi — Ratnabali Capital Markets — Analyst

Yeah, good evening, sir. Congratulations for the set of numbers. Sir, just one — two questions, like, you mentioned like the trade, non-trade cap is currently INR15 per bag, INR20 per bag. What was the thing, like, previously — before of this, like improvement?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It was higher than INR20.

Sanjay Nandi — Ratnabali Capital Markets — Analyst

Higher than INR20. And just a long-term question, sir, like, in China, the per capita consumption is 1,500 kg per person.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Correct.

Sanjay Nandi — Ratnabali Capital Markets — Analyst

And in India, we are heading to 200 kg.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

No, maybe closer to 300 kg now. It’s improved, but way behind China.

Sanjay Nandi — Ratnabali Capital Markets — Analyst

Yeah, it’s [Speech Overlap]. So how long…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

But if you exclude China — of course, China is high on everything. If you exclude China, then the average per capita of the globe will be 500 kgs per capita to 600 kgs per capita.

Sanjay Nandi — Ratnabali Capital Markets — Analyst

Right, sir. So sir, do you think, like in next 10 years’ time, we will be able to, like, touch that improvement?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It’s improving. So when — five years ago, it was closer to 200 kgs per capita, now it’s reaching about 293 kgs per capita, and so it’s improving.

Sanjay Nandi — Ratnabali Capital Markets — Analyst

Okay, okay, okay, got it, sir, got it, sir. Thank you so much, sir. Wish you all the very best, sir, for this next superb set of numbers for the coming quarters.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Akshata Telisara from SBI General Insurance. Please go ahead.

Akshata Telisara — SBI General Insurance — Analyst

Yeah, hi, thanks for the opportunity, and congratulations on a great quarter. So over the last decade, we did see a lot of capacities come in, in anticipation of demand, but the demand did not materialize enough, so therefore, we kind of entered a focused environment. Even today, a lot of capacities have been announced by you and your peers. So my question is, how do you see the large players like you and others interact with the other large players in regions like the North and Central? And how do you see the small players interact with other small players in the South, or how do you see the large and the small talk to each other in JV planning, could you just elaborate a little on that? Thank you.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

First of all is we don’t have to interact with other players. So that’s the shortest answer I can give you. Unless you have something else to add or I didn’t understand your question.

Akshata Telisara — SBI General Insurance — Analyst

No. I was just wanting to understand how would the pricing stay within the players given that there is a demand/supply mismatch here?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

No, every market, it’s — prices are clearly driven by demand/supply. And I — you — if you’re tracking the cement market for a longer history, the moment any market crosses 85% capacity utilized — capacity utilization, there’s a very strong uptick in prices. So that is how the markets behaves.

Akshata Telisara — SBI General Insurance — Analyst

But on an aggregate level, we are around 70%, right, so.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I am sorry, what?

Akshata Telisara — SBI General Insurance — Analyst

On an aggregate level, we are at around 70%.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

The capacity utilization at an all — the country level, 70%, yeah.

Akshata Telisara — SBI General Insurance — Analyst

Yeah.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

But this is, again, to caution you, one should never look at all India full-year capacity utilization, you will never reach a high number because cement is seasonal, July, September and the peak summer months do pull down the cement consumption. So you will never have all India number to go by. You have to test waters for January-March. January-March, we operated — the last year, we operated at 93%. 93%? 93% capacity utilization we operated. In fact, for the month of March, we operated at close to 100%. And I would want you to imagine 55 physical plant locations operating at 100% capacity utilization. Railway sidings operating 100%, no strikes happening anywhere, railway sidings available, everything is moving smoothly. That requires — if that happens, then you have 100% capacity utilization.

Akshata Telisara — SBI General Insurance — Analyst

Okay.

Operator

Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.

Amit Murarka — Axis Capital — Analyst

Yeah, thanks for the opportunity again. So, yeah, so actually, on Slide 30, you have mentioned about improving the blending ratio, which actually is quite an interesting comment given that you have one of the lower blending ratios actually amongst the players. So how will that be achieved? Will it also mean like you will focus more on the trade markets and hence maybe you sell lower OPC or how do we think about that?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

See, OPC will — if infrastructure is going up, OPC consumption will go up. Large infra projects require — tend to consume OPC, and that is where UltraTech stands out in supporting the infra growth, unlike any other player in the country. What we are also engaging in is advocacy with the infrastructure players to do blending and reduce OPC consumption, that is what will help us improve the overall blending ratio. Besides, there are markets — Eastern markets are composite cement markets, which the highly sales mix in the — in those markets or Southern markets will improve the overall blending ratio.

Amit Murarka — Axis Capital — Analyst

Okay. And is there any number you have in mind like going up to 1.4 [Phonetic], 1.5 [Phonetic], is there…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We’re already at 1.4 [Phonetic] today.

Amit Murarka — Axis Capital — Analyst

Okay, yeah, you used to be slightly lower than that. So basically…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah, we were 1.34 [Phonetic] in maybe a year or two years ago, but we’re already reaching 1.4 [Phonetic], and obviously, the ambition will be to improve it further.

Amit Murarka — Axis Capital — Analyst

Got it, got it, thank you. Yeah.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.

Prateek Kumar — Jefferies — Analyst

Thanks for the opportunity again, sir. Just one question, bookkeeping question on Slide 13 of your presentation, there is a line item under others, which says that INR291 crore of revenues and corresponding that there’s no volumes. We used to give this export and others volumes in this head. So firstly, why is there’s no volume, sir? Also this INR291 crore is to — is corresponding to what exactly?

Unidentified Speaker —

So that Others is actually an intra-company sale, which we have removed from this quarter. If you add up for all these numbers, which is cement, white and red cement, it will add to the consolidated number. It was only a intra-company sale. So…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Volume has not been shown on that account.

Unidentified Speaker —

And INR291 crore revenue, which is on others business, UBS, BPD and others.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. So UBS sales or our building construction chemical sales or other income or other miscellaneous sales that might be there.

Prateek Kumar — Jefferies — Analyst

So last quarter, that number was…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We are trying to improve the disclosures, simplify your life. What perhaps you might want is export volumes. Export volumes were dismal. Our exports are largely to Sri Lanka, and Sri Lanka was virtually low exports. Just 1,00,000 tons of export to Sri Lanka.

Prateek Kumar — Jefferies — Analyst

Sure. Okay, that clarifies. Thank you.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

All right.

Operator

Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.

Indrajit Agarwal — CLSA — Analyst

Hi, sir, one follow-up bookkeeping question. Any ballpark number on how much capex is remaining in Phase 1 for FY ’23 [Phonetic]?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We should complete everything this year, and maybe INR2,000 crores, INR3,000 crores of spending might be pending, might be pending. If I’m wrong, then Ankit will revert to you in the meantime.

Indrajit Agarwal — CLSA — Analyst

Sure. Thank you so much.

Operator

Thank you. The next question is from the line of Ritesh Shah from Investec Capital. Please go ahead.

Ritesh Shah — Investec Capital — Analyst

Hi, sir, two questions. First is, Grasim made an announcement of INR2,000 crores on the B2B side online portal. We have a solid UBS franchise. Any color if both the variables can actually marry into each other for both the entities to realize the gains…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

It should be. I think they will evaluate how to synergize because that’s B2B e-comm, that’s what I believe. Our UBS is hardcore, it’s B2C.

Ritesh Shah — Investec Capital — Analyst

Sir…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Yeah. I don’t have too much more insights on what Grasim is doing.

Ritesh Shah — Investec Capital — Analyst

Right. Sir, any growth numbers on UBS stores, let’s say, three years out, any target revenues over there?

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We are today reaching about 3,000-odd stores, UBS from cement perspective, because it’s an important channel partner for us, I would think 10% of revenue quantity, one second. Today, 15%, double check. Just today, about 15% of our volumes — yeah, 15% of our cement volumes are through UBS outlets. So we will continue to grow the UBS channel.

Ritesh Shah — Investec Capital — Analyst

Sure. And sir, on RMC, there are a few players who are going super aggressive in the market. Any plans over here to up the game? And…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

We are expanding pretty rapidly. Today, we have the — maybe a year ago or six quarters ago, we were static around 100 plants, today, we have reached almost 171 plants. Y-o-Y, 35 plant growth has happened. So it’s — if I look at the revenue numbers on that same chart, 77% growth in revenue. And mind you, these generate incremental EBITDA over the cement EBITDA. So it’s not just a channel, but it generates its own P&L.

Ritesh Shah — Investec Capital — Analyst

Right. Sir, last question, I’m not sure should I ask one out, but I just — I’ll go ahead with it. Sir, at what point do you think that adding capacity beyond a particular point could actually be detrimental to us? What is the variable that you would look at and say, I do not want to be…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

I will — in the lighter vein, if I look right, I see my plant and if I look left, I see my plant, then that is when we will stop adding capacity. But to be honest, this question will get — it’s a brilliant question, Ritesh. The answer to this would be defined by lead distance. How much lead I am generating maybe today, we’re at 439 kilometers, maybe average 300 kilometers might be a good lead to operate on, to that extent, we’ll keep on expanding. Because there will be opportunity to expand, let me put it this way. There will be opportunity to expand. But there is no — this is off-the-cuff answer. There’s no scientific work that I’ve done in giving this answer.

Ritesh Shah — Investec Capital — Analyst

Right. Sir, if I just try to push you a little bit, we have given numbers say, 2025 [Phonetic], probably something by 2030. Any specific numbers and market share that we would be looking at given you would have…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Can’t define market share, because we don’t get any market data. We don’t know how the capacity will be there, how the growth will be there. So it’s — it’s difficult.

Ritesh Shah — Investec Capital — Analyst

Okay, sure.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

You asked me a difficult question, I’ll give you a difficult answer.

Ritesh Shah — Investec Capital — Analyst

Sure. I’ll come out of…

Atul Daga — Business Head, Executive Director and Chief Financial Officer

All right. Yeah, that’s better, Ritesh. Yeah.

Ritesh Shah — Investec Capital — Analyst

Yes, thanks.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

All right.

Ritesh Shah — Investec Capital — Analyst

Thank you.

Atul Daga — Business Head, Executive Director and Chief Financial Officer

Thank you.

Operator

[Operator Closing Remarks]