ULTRACEMCO — earnings call

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Prepared remarks

FINANCIAL OFFICER · MR. K.C. JHANWAR – MANAGING DIRECTOR

MR. K.C.

JHANWAR – MANAGING DIRECTOR UltraTech Cement Limited January 19, 2024

Moderator · Conference Operator

Ladies and gentlemen, good day, and welcome to the UltraTech Cement Limited Q3 FY'24

Thank you.

The next question is from the line of Rashi Chopra from Citi Group.

Rashi Chopra

Just on utilization, your utilization was 77% in this quarter.

So what are you expecting in the fourth quarter?

Atul Daga

Fourth quarter, historically, if you see, I would expect this quarter also to repeat.

However, election date -- depends on election date as and when the election dates are announced and the code of conduct sets in.

It's very, very confusing to put a number -- to put a finger to a number.

As I already mentioned, mid-December onwards, we started seeing demand pick up, and the signs are very good.

Still, if I have to put a number, we will definitely cross 80%, 85% for sure.

Rashi Chopra

Okay.

And in your opinion, like for the full year, what should the industry demand growth be for cement?

Atul Daga

We were looking at close to double digits.

So 8%, 9% for is a possibility.

K.C. Jhanwar

Yes.

Anything between 8% to 9%.

Rashi Chopra

Just some bookkeeping.

On your trade volumes and blended cement for the quarter?

Atul Daga

Trade was 64%.

Moderator · Conference Operator

Thank you.

The next question is from the line of Indrajit, an individual investor.

Please go ahead.

Indrajit Agarwal

Sorry, Indrajit Agarwal from CLSA.

Yes, after the capex, so INR18,000 crores in the two years, how much would be remaining for Phase 3, till Phase 3?

Atul Daga

We had total cost of INR13,000 crores, INR12,000 crores, so INR25,000 crores.

INR25,000 crores, out of which INR18,000 crores is getting completed.

So the balance is there INR6,000 crores -- INR37,000 crores.

Indrajit Agarwal

And given that not all the capacity -- about 2 million tons of capacity at Kesoram is not clinker- backed, so could we look to realign some of our like organic expansion to support that?

Or how do we...

Atul Daga

Yes, we are looking at it.

I think in the next -- we have plenty of time.

So once we are -- get CCI approval, we'll work more closely with them to understand their plans and how we can realign our capacities.

Indrajit Agarwal

Sure.

And sir, last question, on this post-Kesoram, we will be at around 190-odd million ton capacity, right?

Atul Daga

Very close to that number in India.

UltraTech Cement Limited January 19, 2024

Indrajit Agarwal

And our target is 200 million by '28.

So do we have enough organic opportunities for getting to that additional 10 million tons?

Or we'll have to...

Atul Daga

Organic, most certainly, most certainly.

Indrajit Agarwal

Okay.

All right.

And all those organic, we are still confident it is truly lower than, like, say, $90 to $100 per ton, right?

Atul Daga

Absolutely.

No doubt about that.

Moderator · Conference Operator

Thank you.

The next question is from the line of Ashish Jain from Macquarie.

Please go ahead.

Ashish Jain

Sir, on -- you based your numbers on kilns with WHRS.

And while that you said that currently, we have 44 kilns and by '27 we will have 48 kilns.

So are we adding this 25 million tons between Phase one and Phase 2 just across four new lines?

I was not clear about that.

Atul Daga

Yes, there are four lines -- four greenfield lines getting added.

Ashish Jain

Of 24 million tons of clinker?

Okay.

Moderator · Conference Operator

`Thank you.

The next question is from the line of Prateek from Jefferies.

Please go ahead.

Prateek

My first question is on last quarter's demand growth, you said it's around 3%, 4%.

Would you have like region-wise distribution of how this growth was?

Atul Daga

Very difficult at the moment.

We will wait to see numbers from regional players, then it will be better to comment on that.

Prateek

And your utilization of 77%, how would that be region-wise?

Atul Daga

More or less evenly spread, the highest being 80%, 85% and the lowest being 74%, 73%.

Prateek

Okay.

So South the utilizations is half -- I believe the South number would be lower number of on the range.

So South utilization for yourself and for the industry has like sustainably moved up?

Or is it like we are operating at significantly high?

Atul Daga

So we are -- so when we are growing at a pace higher than the industry, our capacity utilizations will also be higher than the industry.

That is one.

South market has been consolidating and improving continuously.

Gone are the days when Southern markets used to operate sub-50%.

So you are seeing South markets also going up above 70%, for sure.

Prateek

Okay.

And over the next six months, as you concur, like volume growth may like sort of get impacted.

How do you see the pricing during this period?

Atul Daga

The pricing is, Prateek, determined by demand, good demand across the country and as seen in the past also, when all India -- all India capacity utilization crosses 85%, prices become very strong.

So it's a play of demand.

If there's good demand, prices tend to improve.

UltraTech Cement Limited January 19, 2024

Prateek

Right.

But versus last quarter, when we sort of seen the start of the quarter, we had 5% higher prices all of that roll back.

We are sort of having a similar view on pricing we had that time?

Or...

Atul Daga

My sense is if capacity utilizations in January, March, which has been -- which has precedent, if you go last two, three years, capacity utilizations have been strong, the prices could improve.

However, we are heading into election periods.

So there might be -- how demand pans out, it remains to be seen.

Prateek

Sure.

And lastly, this INR25,000 crores of capex, you said INR9,000 crores, INR9,000 crores and maybe INR7,000 crores for three years.

Is this maintenance capex also included in this?

Atul Daga

All in.

Prateek

Okay.

So maintenance included, we have INR25,000 crores spend?

Atul Daga

Sorry, sorry.

Phase 2, Phase 3, yes.

So maybe INR1,000 crores or INR2,000 crores on maintenance capex, give or take.

And the WHRS also, which is under implementation.

But all put together, capex, which I'm seeing this year, we have already crossed about INR6,500 crores for the nine months.

So we will very unit as INR9,000 crores on that, which includes both our growth capex as well as routine capex or maintenance capex.

This is a trend which we see at least next year, for sure.

Prateek

Sure.

So INR9,000 crores, INR9,000 and next year -- FY'26, we'll have like INR6,000 crores, INR7,000 crores plus?

Atul Daga

It will be higher only, not INR7,000 crores, because there will be maintenance capex also.

Prateek

And in between, there will be like acquisition EV of around INR7,500 crores of...

Atul Daga

Yes.

Yes, that is coming in.

That is coming in.

So in my commentary, when I mentioned FY'25 net cash on the balance sheet, I am not taking into account this acquisition, which will bring in a debt of 18 -- INR2,000 crores.

Moderator · Conference Operator

Thank you.

The next question is from the line of Devesh Agarwal from IIFL Securities.

Please go ahead.

Devesh Agarwal

Sir, firstly, in terms of cost, you did mention that the cost will continue to slide.

But based on our inventories, can you give some sense what would be the decline we can expect in Q4?

Atul Daga

We are at $150, no? this quarter.

So we are at $150 of consumption this quarter.

I would expect 5%, 7% -- 7%, 8% reduction over the next 6 months for sure, it could be higher also.

Devesh Agarwal

Okay.

And secondly, sir, based on our Kesoram acquisition, you do have some capacity addition plans in waste heat in Southern India.

Can there be any rethink or those remain intact?

Atul Daga

So I think somebody had asked about this.

In the next six months, we will come back in case there is any change in our existing expansion plans.

UltraTech Cement Limited January 19, 2024

Devesh Agarwal

Okay.

And sir, in our RMC business, what would be the margin for the quarter?

Atul Daga

In what, RMC business?

Devesh Agarwal

Yes, sir.

Atul Daga

RMC business generally delivers 3% higher...

Moderator · Conference Operator

Thank you.

The next question is from the line of Satyadeep Jain from Ambit Capital.

Please go ahead.

Satyadeep Jain

Just a couple of questions.

One, follow-up to Navin's question.

On the foray in Northeast, I just want a clarification.

You already have some limestone assets there in Northeast?

Atul Daga

Identified, yes.

Satyadeep Jain

But not existing assets.

Secondly, on Nawalgarh in the Phase 3, we don't see Nawalgarh.

So is there some land acquisition....

Atul Daga

No, no. There's -- that will come in Phase four.

Land acquisition is half of it.

Because right now, we are doing Kotputli expansion in Rajasthan, which is part of our Phase 2, which will get commissioned.

And then we will take up further expansion in Rajasthan in Phase four, if I can call it that way.

Satyadeep Jain

So land acquisition is still going on there?

Atul Daga

Sorry.

And Nathdwara expansion, my colleague corrected me, Nathdwara expansion is also happening right now.

Moderator · Conference Operator

Thank you.

The next question is from the line of Rajesh Kumar Ravi from HDFC Securities.

Please go ahead.

Rajesh Kumar Ravi

Am I audible?

Atul Daga

Yes, please.

Rajesh Kumar Ravi

Sir, could you share the breakup of the pending 2.6 million ton debottlenecking which was due in second half?

And also the slag grinding units, which are expected next year?

Atul Daga

So slag grinding units, one is in South, one in West Bengal and third one?

Moderator · Conference Operator

Thank you.

The next question is from the line of Shravan Shah from Dolat Capital.

Please go ahead.

Shravan Shah

Sir, one data point, what's the premium, sir, for this quarter?

Moderator · Conference Operator

The next question is from the line of Patanjali Srinivasan from Sundaram Mutual Fund.

Patanjali Srinivasan

Sir, am I audible?

Atul Daga

Yes, please.

Patanjali Srinivasan

Yes, sir.

So firstly, congratulations on a good set of numbers.

I wanted to know what a gray cement EBITDA per ton would be?

Atul Daga

Gray cement EBITDA per ton, we are at INR1,200 per ton.

Well, INR1,208 depending upon operating EBITDA, how you calculate operating EBITDA, it would be around INR1,208 per ton.

Patanjali Srinivasan

No, sir.

So our India business, when we declare numbers and it includes our white cement, RMC also.

So I'm just trying to understand, if gray cement EBITDA would be slightly lower.

But because of RMC, it will be a blended number of INR1,208.

Is my understanding correct?

Atul Daga

Yes.

RMC is obviously part of our gray cement business.

UltraTech Cement Limited January 19, 2024

Patanjali Srinivasan

Okay.

And from a kcal perspective, what would be our cost -- fuel cost for the quarter, sir?

Atul Daga

From what perspective?

Patanjali Srinivasan

K-cal.

Atul Daga

I already gave it, I think 2.04.

Patanjali Srinivasan

Okay.

And where do we see it going in the coming quarters?

Atul Daga

Yes, you should have been on the call earlier.

I expect....

Patanjali Srinivasan

No, no, I was there.

Sorry.

Directionally.

I just wanted to know how much will it be?.

Atul Daga

Directionally it will be reducing.

Again, I also mentioned 6% to 8% reduction is a possibility.

It could be more, it could be less.

I don't have a control on that.

Moderator · Conference Operator

The next question is from the line of Ashish Jain from Macquarie.

Ashish G. Jain

Sir, my first question was on expansion.

Like when we acquired Nathdwara, one of the arguments was that we can easily double the capacity.

But even in Phase 3, there's only 1.2 million tons coming in Nathdwara and we have hardly added after the acquisition.

So what -- and from profitability point of view also, I think in the past, we have highlighted that Nathdwara is fairly profitable.

So why are we going so slow on Nathdwara expansion?

Moderator · Conference Operator

The next question is from the line of Ritesh Shah from Investec.

Ritesh Shah

Sir, two questions.

Sir, first is we have your long-term carbon intensity target of 62%.

This includes Scope one reduction of 27% from the baseline and 69% on Scope two.

Sir, is there a road map which is there to reduce carbon intensity?

I would presume clinker factor would be one of the variables.

So when we're looking at Phase 2 and Phase 3, are we looking at this particular variable to shift significantly?

That's the first question.

Atul Daga

So to answer, yes, clinker factor will be the largest driver for reducing the CO2 emissions.

We have a concrete plan in place to reduce clinker factor.

New products which are getting added, variants which getting added which helps improve the clinker conversion factor.

Ritesh Shah

Sir, would it be possible to guide any particular clinker factor numbers, say, by FY'26, '27 or say '28, something in interim before 2032?

Atul Daga

No, I would not want to reveal that.

Ritesh Shah

Okay.

And sir, as you indicate, we will focus on clinker factors, then how should we understand the demand-supply dynamics for fly ash and slag?

If you could provide some color over here and specifically on the cost inflation for both this variables.

Atul Daga

My sense says that the country will not have any shortage on account of fly and slag availability.

Cement industry will not suffer because of that.

Ritesh Shah

Okay.

But from a cost inflation standpoint?

Atul Daga

On these commodities?

Ritesh Shah

Yes, sir, flyash and slag.

Atul Daga

It's a matter of demand and supply.

For example, fly ash can vary from zero cost to INR500 per ton plus freight.

So it purely is on demand and supply.

Ritesh Shah

Sure.

And sir, you said new products getting added.

Are we referring to, I don't know, LC3 or something else?

Also I would like to have your thoughts given BIS has come up with the norms over here.

So is it a variable that we will look at going forward?

UltraTech Cement Limited January 19, 2024

K.C. Jhanwar

Yes.

The LC3 is still not -- I would say, the commercialize some pilot scale production has started in the Western world, at least in India, nothing has happened.

But yes, it is very much on the radar and we are working on it.

Ritesh Shah

Okay.

So we have the product credit.

It is just that we have not commercialized.

Should we read it that way?

K.C. Jhanwar

It's not question of product because the product is not so important to produce.

But I think the overall, that technology and the scale actually.

Because if somebody can produce in, say, 1,000 TPT plant, but it should be scalable to a higher level.

And at the same time, the raw material availability is also to be insured, actually at least for 30, 40 years.

Ritesh Shah

Sure.

And sir, second -- last question, sir.

Can you give some color around -- it's good to see bulk cement terminals being added.

If you could provide some color on why, the rationale behind the locations where we are.

And after Phase 2, Phase 3 expansion, any broader thoughts on distribution?

So we -- I see a lot of jetties on the western coast line, but we have hardly anything on the eastern coast line.

So how should we understand that and the location of the bulk cement terminals.

Anything on the distribution?

Atul Daga

They are clearly determined by the market and -- the mild market and the kind of demand that exists in those markets.

And for East Coast, Jhanwar Ji, do you want to say anything?

K.C. Jhanwar

The East Coast, because the again, the availability of the right kind of ports, etcetera, is generally hampering unlike the way the terminals are there in Southern India.

And ultimately, it's a very composite subject.

So there you have your integrated facility of cement and what are the markets which can be conveniently sold actually to those markets.

So it's a question of taking integrated holistic approach of putting up either bulk terminal or grinding unit.

Ritesh Shah

Right.

But again, sir, we don't see much of bulk cement terminals on the eastern coast line.

So what we have is pretty few actually.

K.C. Jhanwar

Because in East, it is not there because everything needs to be moved by rail only, and the rail - - availability of rail itself is a major challenge in Eastern India as of now.

So there is no -- like the sea movement which is happening from Gujarat to the southern side.

It's purely the land movement because most of the cement is coming to the Eastern India from Chhatisgarh cluster, actually.

Ritesh Shah

Sir, just one bookkeeping question.

Will it be possible -- would it be possible for you to give a split of OPC, PPC, PSC and composite probably for the last fiscal or probably for -- probably I can take it afterwards.

Atul Daga

What did you ask?

Ritesh Shah

Product mix, OPC, PPC, PSC and composites.

Atul Daga

Everything is blended is one and rest is OPC.

Ritesh Shah

Sir, I wanted to break that thing up.

Probably I'll connect offline afterward.

UltraTech Cement Limited January 19, 2024

Moderator · Conference Operator

Thank you.

The next question is from the line of Sumangal Nevatia from Kotak Securities.

Please go ahead.

Sumangal Nevatia

Just one question left.

So Grasim will be launching a Paint venture soon.

And at the time of the foray, there was some sort of discussion that the white cement distribution network will be used of UltraTech.

So any sort of compensation or benefit we will get?

Any quantification since it's very close to launch now?

Atul Daga

We are working on a business sharing agreement.

But as far as dealer network is concerned, it's a free market, there is no really a royalty that we will get from them for accessing those dealers because they are not our private domain.

They are not our proprietary concerns.

There are individuals who anybody can approach to do business.

Sumangal Nevatia

Okay.

So nothing meaningful from this?

Atul Daga

They are working independently.

We have no role to play in their working model or whatever they are doing.

Sumangal Nevatia

Understood, understood.

And just if I may, a second question, I mean, if you see from an industry perspective, last 18-odd months, there's been three or four big M&A announcements by us and by a few peers.

Over the next, say, one, two years, do you see there's further consolidation happening in the industry?

And any sort of broad capacity you would like to guide us to?

And what sort of consolidation is left in the industry if that would happen?

Atul Daga

I think consolidation will be a theme for a few more years.

Things will keep happening as we progress along -- as the industry progresses along.

That is a given.

There are lots of names, and I'm sure you would know them yourselves.

Seems roughly for me to repeat them on the call.

The names are quite evident, who will be there on the radar.

Moderator · Conference Operator

Thank you.

The next question is from the line of Vishal Periwal from IDBI Capital.

Please go ahead.

Vishal Periwal

I think in the call, you briefly mentioned that cement prices in quarter four is slightly lower.

Region-wise will it be possible to share how they are currently?

Atul Daga

I don't have that immediately.

Vishal Periwal

Okay.

Fair enough.

And second, I think you did passed upon the fuel cost will be lower in quarter four.

So the 6% to 7% number that is for this particular quarter, quarter four on a quarter-quarter basis?

Or it is six to eight months.

Atul Daga

Two quarters safely.

Vishal Periwal

Okay, okay.

Sure.

So one can say that probably a split between quarter four and quarter one.

Atul Daga

Yes.

UltraTech Cement Limited January 19, 2024

Moderator · Conference Operator

Thank you.

The next question is from the line of Navin Sahadeo from ICICI Securities.

Please go ahead.

Navin Sahadeo

Sir, just one question.

You've given the plans of Phase 3 coming in end capacity by FY'27.

But is there any indication how much we could see in FY'26 as such?

Or it will be like a lean year as such?

Atul Daga

No, no, no. So it will be spread and keep coming gradually.

And as we progress on work, we will give a further granular schedules.

Because right now, as I mentioned, technology orders have been placed, a couple of sites have started civil work.

Major work will start, I'm assuming in '25.

Once there is traction, we will give a schedule -- the way we have given the schedule for Phase 2, we will give a schedule for Phase 3 as well.

Navin Sahadeo

Understood.

We look forward to that.

And just one more question.

You said for the quarter, the blended cost is around $150.

And within that pet coke was more like $126.

So at current spot rates, which are more like $115, $116 , the blended cost will be around $130, $131, which is roughly $20 savings from current levels?

Atul Daga

Everything gets converted.

Everything is at $115 and you have the math.

K.C. Jhanwar

Yes.

You are able to get at $150 shipments, actually.

On shipment gets so far $115 but you all know well that the availability of pet coke is very limited.

And with every parcel, the price gets charged.

Moderator · Conference Operator

Thank you.

The next question is from the line of Amit Murarka from Axis Capital.

Please go ahead.

Amit Murarka

So my question was on the carbon trading, which the Indian government is now looking to implement, the CCT scheme, that is.

So could you help understand, like I believe the trading will start in FY'26 and FY'25 will be the year when the monitoring starts.

So where do you think the benchmarks will be?

And is there any potential cost that would come in because of that?

Atul Daga

No idea whatsoever.

I think I'd love to learn when you learn.

Let me know if you come to know about something.

K.C. Jhanwar

I think there is a lot of talk, but I think it is too early to get a real sense because there are multiple levers the government is yet to take in.

Amit Murarka

Okay, okay.

Got it.

And also on the blended fuel cost of $150 and petcoke $126, so the coal, which means implies about $170, $175, correct?

I mean, if I'm not wrong in assuming a 50-50 split.

And spot coal, as I can see, at least RB1 at all is now at close to $100, $105.

So the difference seems to be quite big in that respect, just if my calculations are correct.

Moderator · Conference Operator

Thank you.

The next question is from the line of Aman Agrawal from Equirus Securities.

Please go ahead.

Aman Agrawal

One question from my end on the Eastern market.

So many peers have been highlighting for quite some time about the slowness in demand in the Eastern market, especially in states like West Bengal and Bihar.

What would be your take on that?

What was the key reason why demand is still not panning out as buoyant as other regions?

Atul Daga

I think there have been -- as I mentioned in my commentary also, there have been fiscal challenges in the states of Bihar and West Bengal, because of which there has been a slowdown.

Aman Agrawal

Okay.

Second, just lastly on industry growth that you would be expecting for 3Q.

I'm sure you said that UltraTech has kind of grew better than the industry.

Any number you would like to assign for the industry on...

Atul Daga

I mentioned, I think we expect the industry to be anywhere between 3% to 4%.

Moderator · Conference Operator

Thank you.

Ladies and gentlemen, that was the last question.

On behalf of UltraTech Cement, that concludes this conference.

Thank you all for joining us.

You may now disconnect your lines.

Atul Daga

Thank you.

Questions and answers

Moderator · Conference Operator

Thank you.

The first question is from the line of Amit Murarka from Axis Capital.

Please go ahead.

Amit Murarka

Good evening.

Thanks for the opportunity.

The first question is on other expenses.

So like doesn't Q2 has higher other expenses which we saw and Q3 simply witnesses a drop at this time.

That drop is not visible.

First thing I wanted to highlight was -- I wanted to check, was there any one-off in other expenses?

Atul Daga

So it's not a one-off, but when we saw the slowdown -- I should say slow down, or lukewarm response in the markets during October, November, we did some pre-emptive or early preponement of some maintenance costs, which would have become part of the overall cost during this quarter.

Amit Murarka

Okay.

So recently, this campaign has also been launched with Shahrukh Khan, of course.

Congratulations on that, but that is already in the P&L or Q3?

Or will that come?

Atul Daga

Sorry, who is Shahrukh Khan?

Yes.

Obviously, we will book their expenses.

We don't keep anything for a later date.

Amit Murarka

Okay, okay.

And just lastly, I see the slide on the capacity commissioning schedule.

Like what will be the clinker capacity addition in Phase 3?

And where will you go on total clinker capacity at the end Phase 3?

Atul Daga

I think I had already mentioned last time, 10 million to 12 million tons, but not getting into details on clinker capacity, but 10 million to 12 million tons.

So we will always be clinker backed, that is most important aspect.

Just one second, Jhanwarji wants to speak .

K.C. Jhanwar

Yes.

See, the first of all, Atul has already just said that our all capacities are always clinker backed.

Actually, we never put the supply grinding facility and not having the clinker on the back side.

Atul Daga

Okay.

Sure.

I'll come back and thank you.

Moderator · Conference Operator

Thank you.

The next question is from the line of Navin Sahadeo from ICICI Securities.

Please go ahead.

Navin Sahadeo

Congrats on a good set of numbers.

Sir, two questions.

First, I'll take on prices.

So you said by the end of December, prices has turned fairly weak.

So this exit of the current...

UltraTech Cement Limited January 19, 2024

Atul Daga

It's not weak, I wouldn't say weak.

But the gains which were there in the quarter were largely surrendered.

Navin Sahadeo

Fair.

So can we say that the cost price like in January is at least, let's say, 2% or some number, so it's lower than Q3?

Atul Daga

Lower than Q3, yes, prices will be currently lower than Q3.

K.C. Jhanwar

Marginally.

Atul Daga

Yes.

Navin Sahadeo

Okay. marginally.

Fair.

And sir, my second question was on your recently incorporated company in Northeast and a very peculiar name to it.

So I'm just trying to understand, it seems like something has already firmed up and very soon, we could see either a greenfield expansion or some venture in that state.

If you can throw some light on this?

Atul Daga

So I will throw some light when I have the torch with me.

So sorry, not to -- I don't know why I started joking on the call.

But we will come back, Navin, We are making progress on our expansion in the Northeast.

It has been long overdue.

As per the legal requirements, we need a separate entity with local partnerships, local directors, etcetera.

So that has been structured.

We will come back with details as and when we are ready.

Navin Sahadeo

I mean my only question was, given the peculiarity of the name, I could sense that it could be a greenfield venture because there, you don't have to really go into an auction of a mine as such.

If you have land already in place, you can start.

Atul Daga

Yes, absolutely.

Absolutely .

Navin Sahadeo

Great.

Thank you.

So much.

Moderator · Conference Operator

Thank you.

The next question is from the line of Ritesh Shah from Investec.

Please go ahead.

Ritesh Shah

Sir, a couple of questions.

First, sir, you used the word, "we have taken opportunistic bets on fuel." Sir, can you please provide some more color over here?

You did indicate on a rupee per k-cal basis for the quarter.

If you have taken some nice bets, does it mean it is lower than the prevailing spot prices?

How should we look at it?

Atul Daga

So Ritesh, let's keep it for the next quarter.

Why should I spill the beans right now?

I have also mentioned that you will keep seeing our cost curve sliding down continuously.

We will reveal the numbers as and when -- at the end of the next quarter.

Ritesh Shah

Okay.

If I put the question the other way around, would we have taken...

Atul Daga

I can't turn either way around.

UltraTech Cement Limited January 19, 2024

Ritesh Shah

Okay.

Right.

So probably I'll try to move to the next question then, sir, you did indicate that the incremental clinker capacity you had earlier indicated at 10 million to 12 million tons.

This corresponds to Phase 2 and Phase 3 together?

Atul Daga

This was about Phase 3.

Ritesh Shah

Phase 3.

And specific corresponding to Phase 2?

K.C. Jhanwar

14 million.

Atul Daga

14 million tons.

Ritesh Shah

Okay.

And the incremental announcements which we have detailed, do we -- are we incentive- backed on most of the states?

Because I see a few states where...

Atul Daga

I'll tell you which places have incentives.

So you have Rajasthan, Rajasthan has incentives.

Andhra doesn't have.

Bihar has.

Yes.

UP also will have it.

Ritesh Shah

UP has.

Tamil Nadu doesn't have?

Atul Daga

Punjab is in Phase 2.

So Punjab also -- In Phase 3, you would have Rajasthan, UP, Bihar, yes.

These states will have incentives.

Ritesh Shah

Okay.

So AP doesn't have?

I presume Tamil Nadu also would not have, right?

Atul Daga

Yes.