INDIACEM — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

Moderator · Conference Operator

MR. VAIBHAV AGARWAL – PHILLIPCAPITAL (INDIA) PRIVATE LIMITED India Cements Limited May 24,2023

Ladies and gentlemen, good day and welcome to the India Cements Q4 FY23 Call 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 this conference call, please signal an operator by pressing ‘*’ and then ‘0’ on your touchtone phone.

Please note that this conference is being recorded.

I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Private Limited.

Thank you and over to you, Sir.

Vaibhav Agarwal

Thank you Aman.

Good morning everyone.

On behalf of PhillipCapital (India) Private Limited we welcome you to the Q4& FY23 Call of the India Cements Limited.

On the call we have with us the entire Senior Management Team of India Cements.

I would like to mention on behalf of The India Cements Limited and its management that certain statements that maybe made or discussed on this conference call maybe forward-looking statements related to future developments and the current performance.

These statements are subject to a number of risks, uncertainties and other important factors that may cause actual developmental results to differ materially from the statements made.

The India Cements Limited and the management of the company assumes no obligation to publicly alter or update these forward-looking statements whether as a result of new information or future events or otherwise.

I will now hand over the floor to Mr. N.

Srinivasan – Vice Chairman and Managing Director of the company for his opening remarks which will follow up and directing Q&A.

Thank you over to you sir, sir.

Navin Sahadeo: · This question was in for Tamil Nadu and Kerala states because historically?

Those other revenues and EBITDA if you can share from the other business segment?

So, then my first question is about prices of course we have seen I think prices have been under pressure this quarter as well, but is it fair to say that current prices because especially I believe the states like Tamil Nadu and Kerala where all A category players particularly I think have been very aggressive especially in the last couple of months, so is it fair to say that in these markets particularly the current prices could be at least 5%, 7% lower versus March quarter and in general your commentary on the price and the outlook that will help?

India Cements Limited May 24,2023

This question was in for Tamil Nadu and Kerala states because historically?

Moderator · Conference Operator

Thank you.

Next question is from Rajesh Ravi from HDFC Securities.

Please go ahead.

Rajesh Ravi

Sir, could you share the annual numbers clinker production and cement production and sales volume for the full year please?

And cement and clinker sales?

This includes clinker or that is separate?

Moderator · Conference Operator

Thank you.

Next question is from Amit Murarka from Axis Capital.

Please go ahead.

Amit Murarka

Just a couple of questions on the capacity side like we have seen some announcements happening on expansions now in South like we were not seeing that earlier.

So, like anyways Shree Cement is coming up with a plant and even UltraTech is working on the same and Dalmia is doing some debottlenecking.

So, this highly competitive intensity that you mentioned earlier like could this now continue with these new units coming up?

Moderator · Conference Operator

Thank you.

The next question follow up from Navin Sahadeo from ICICI Securities.

Please go ahead.

Navin Sahadeo: · This question was in for Tamil Nadu and Kerala states because historically?

I had two questions one is that our volumes for this year as you said are more like 9.7 million in the year which is still look at from a year perspective or industry perspective way below what we did already in FY19, so as a broader industry level our understanding is that in FY23 the industry has surpassed the volume that it had South Industry specifically, has surpassed volumes that it did in FY19 because you had two bad years 20 and 21 all thanks to COVID in the interim, but there has been recovery thereafter, so just wanted to get a sense that with players or other peers growing like 30% to 40% kind of a growth that we are seeing, but ours is not that much do you still think that having lost some market share the pricing overall will still improve or you think that this year again companies in general may want to get the lost market share to the large company?

So, safe to assume that despite large players like going for pushing volumes far aggressively it is fair to assume that overall industry pricing environment can improve in this fiscal, is that the message we can take?

India Cements Limited May 24,2023

My second question was about the CAPEX that we can expect at the company level for 24 and 25 in light of the initiatives like changing of some critical equipments to improve the efficiencies, so in general what is the CAPEX for FY24 and 25 are we looking at and by when do you expect these especially these large equipments or critical equipments to get replaced?

Moderator · Conference Operator

Thank you.

The next question is from Shyam Sundar Sriram from Franklin Templeton.

Please go ahead.

Shyam Sundar Sriram

Sir my question is more at the industry level trying to understand the dynamics between within states in the South we are given to understand that these gray cement pricing in Hyderabad is now say very close to the pricing in Chennai historically and the Tamil Nadu pricing used to be at a premium to that.

Now given that has it stopped some of the players from the that cluster selling cement into Tamil Nadu, Chennai and does it mean that the players with plants production within Tamil Nadu get to gain market share here in this state?

Moderator · Conference Operator

Thank you.

Next question is from Mangesh Bhadang from Centrum Broking.

Please go ahead.

Mangesh Bhadang

Sir, you mentioned that Southern utilization is at clinker utilization is very close to full and the overall cement capacity is 180 million tons, just wanted to know what is the cement utilization or cement production in the Southern region in FY23?

Moderator · Conference Operator

Thank you.

Next question is from Rajesh Ravi from HDFC Securities.

Please go ahead.

Rajesh Ravi

Just on the previous questions you mentioned that you would be doing the WHR project and AFR, so could you quantify what sort of WHR you are you looking at and AFR and all total CAPEX outlay for these?

Moderator · Conference Operator

Thank you.

Next question is from Navin Sahadeo from ICICI Securities.

Please go ahead.

Navin Sahadeo: · This question was in for Tamil Nadu and Kerala states because historically?

Just one last question from me what is the current net debt both at the standalone and the consol level as at the end of FY23?

And for consol?

This is after adjusting for the money that we have received from the sale of Springway Mining and everything?

Moderator · Conference Operator

Thank you.

Ladies and gentlemen this would be our last question.

I now hand the conference back to Mr. Vaibhav Agarwal for closing comments.

Vaibhav Agarwal

Sir, I had a few questions actually sir you mentioned about this WHRS project being implemented one of your plans, so sir incrementally many of the plants having a quite a lot of vintage, so what is your expectations of the total capacity, how many plants could potentially be supporting this WHRS projects in the future, just your initial thought and maybe we can avoid the report, but what is your thoughts and what kind of savings we can expect from this?

Moderator · Conference Operator

Thank you.

Next question is from Rajesh Ravi from HDFC Securities.

Please go ahead.

Rajesh Ravi

Just one clarification this land monetization which you are looking at would that be on standalone books or in the consol entity?

Moderator · Conference Operator

Thank you.

Ladies and gentlemen, that would be our last question.

I now have the conference talked to Mr. Vaibhav Agarwal for closing comments.

Thank you and over to you.

India Cements Limited May 24,2023

Vaibhav Agarwal

Thank you.

On behalf of PhillipCapital (India) Private Limited we thank the management for India Cements for the call and many thanks to the participants for joining the call.

Thank you very much sir.

Moderator · Conference Operator

Thank you very much.

Ladies and gentlemen, on behalf of PhillipCapital (India) Private Limited that concludes this conference.

Thank you all for joining us and you may now disconnect your lines.

Questions and answers

Nlay2023.docx · Research Analyst

Linarr- MWSWrUindiaCernentS CO In

Moderator · Conference Operator

Thank you very much.

We will now begin the question-and-answer session.

First question is from Navin Sahadeo from ICICI Securities.

Please go ahead.

Navin Sahadeo: · This question was in for Tamil Nadu and Kerala states because historically?

And just before we begin the questions can I just request to share volumes and other data of like those windmill shipping which helps us understand these results better I will come back in queue for questions.