HeidelbergCement India Limited Earnings Conference Call Transcript

Trading Symbol: HEIDELBERG

Filing Date: June 3, 2026

Management Participants

  • Mr. Joydeep Mukherjee, Managing Director
  • Mr. Anil Sharma, Chief Financial Officer
  • Mr. Amit Angra, Head, Investor Relations and Senior Vice President, Finance

Key Financial Results - FY26

  • Sales Volume: Increased by 8.8% year-on-year
  • EBITDA per ton: INR584, up 10.2% from INR530 in previous year
  • EBITDA: 19.8% higher year-on-year
  • PAT: 25.5% higher year-on-year
  • Cash and Bank Balance: INR4,037 million
  • Debt Status: Company completely debt-free after repaying interest-free loan of INR687 million
  • Working Capital: Operating on negative net operating working capital

Quarterly Performance (Q4 FY26)

  • Pricing Impact: Negative impact of INR105 per ton at gross price level
  • Cost Impacts: INR53 negative impact on raw materials, INR25 negative impact on other expenses
  • Partial Offset: Positive gains in power, fuel and freight costs

Annual Cost Structure Analysis

  • Price Impact: Negative INR16 per ton
  • Raw Material Impact: Negative INR11 per ton
  • Positive Contributions: Power and fuel, freight, and other expenses showed positive gains

Dividend Declaration

  • Recommended dividend of INR7 per share (70% on face value of INR10 per share)

Operational Metrics

  • Blended Cement Production: 97% of total cement production
  • Carbon Footprint: Less than 500 kg per ton of cement
  • Water Positivity: 4.8x water positive
  • CSR Impact: Touched 21,000+ lives during FY26
  • Green Power: Exceeded 40% in overall power portfolio
  • Alternative Fuel Usage: 11% at company level (up 3% YoY)
  • Non-grid Power: Exceeded 50% during FY
  • Dispatch Mix: 45% through roads (up 1% YoY)
  • Premium Products: 52% of total trade volumes (up 9% YoY)
  • Trade Mix: 81% trade retail sales, 19% B2B sales

Production Capacity Details

  • Clinker Capacity: 3.1 million tons
  • Cement Grinding Capacity: 6.26 million tons (including 0.5 million tons in Karnataka)
  • Clinker Production (FY26): 3.05 million tons
  • Capacity Utilization: Approximately 95% in FY26
  • Cement-to-Clinker Ratio: Approximately 60-61%

Strategic Developments

  • Khandwa Blending Unit: Setting up new blending unit in Khandwa with investment of INR130 crores over 2 years
  • Expected additional cement output: 35,000 tons per month (0.4 million tons per annum)
  • Capex allocation: INR100 crores in FY27, INR120 crores in FY28
  • Mining Leases: Declared preferred bidder for grant of 2 mining leases in Madhya Pradesh
  • Kuria and Shivpur block: 350 hectares with 62 million tons cement-grade limestone
  • Shivpur block: 350 acres with 105 million tons cement-grade limestone
  • Gujarat Expansion: Still awaiting government clearance, no firm timeline

Cost Outlook and Management

  • Expected Cost Inflation: INR100-150 per ton in near term (next quarter)
  • Fuel Mix Optimization: Currently 60-65% pet coke, 30-40% coal
  • Reduced pet coke consumption by 10% in recent months
  • Flexibility to shift between pet coke and coal based on price movements
  • Current Fuel Price Differential: Pet coke currently 30% more expensive than coal on kcal basis
  • March quarter: Coal cost below 1.5, pet coke around 1.9 on kcal basis

Market Outlook and Guidance

  • Demand Outlook: Expect Central India cement demand growth of 7-7.5% in FY27
  • Expected ramp-up to higher levels approaching elections
  • Pricing Confidence: Management confident of passing on cost increases with a lag
  • Geographic Focus: Uttar Pradesh elections expected to provide impetus to cement demand in Central India
  • Monsoon Impact: Expected temporary consumption slowdown during monsoon season

Risk Factors Mentioned

  • Geopolitical developments in West Asia creating uncertainty in global markets and commodity prices
  • Impact already seen on pet coke and fuel prices
  • Elevated headline inflation and currency depreciation concerns
  • El Nino effect and heat wave posing risk to agricultural output, rural demand and food inflation
  • New capacity additions by competitors (JK Cement, UltraTech) creating pricing pressure in Central India

Additional Operational Details

  • Lead Distance: Approximately 370-372 kilometers
  • Clinker Sales: Some clinker sales occur but not significant
  • Karnataka Operations: Still operating at lower quantities (0.5 million tons capacity)
  • Merger Plans: Potential merger with Zuari entities discussed as timing issue, no specific timeline

Capital Expenditure Plan

  • Sustaining Capex: INR45-50 crores annually (approximately 40% of annual depreciation)
  • Growth Capex: INR130 crores for Khandwa blending unit over 2 years
  • Total Capex FY27: Approximately INR100 crores
  • Total Capex FY28: Approximately INR120 crores