Management Participants

  • Mr. Neeraj Akhoury - Managing Director
  • Mr. Subhash Jajoo - Chief Finance Officer
  • Mr. S.S. Khandelwal - Company Secretary
  • Mr. K.K. Jain - Joint President Finance & Accounts

Key Financial Metrics Q2 FY27

Volume Performance:

  • India sales volumes: 9.31 million tons (up 18% YoY from 7.91 million tons)
  • Consolidated sales volumes: 10.52 million tons (up 14% YoY from 9.23 million tons)
  • Capacity utilization: 56% (vs 52% in Q2 FY26)

Financial Performance:

  • Realization: INR4,870 per ton (up 1% YoY from INR4,840)
  • Consolidated EBITDA: INR1,016 crore (up 4% YoY from INR974 crore)
  • EBITDA per ton: INR966 (down from INR1,055 YoY and INR1,111 QoQ)

Sequential Performance (Q2 vs Q1 FY27):

  • India volume declined 11% from 10.49 million tons
  • Realization declined 1% from INR4,919 per ton
  • Consolidated EBITDA declined from INR1,272 crore to INR1,016 crore
  • Consolidated sales volumes down 8% from 11.45 million tons

Cost Structure

  • Landed fuel cost: INR2.09/kCal (vs INR1.66 YoY and INR1.95 in Q1)
  • Blended cost of production: INR4,636 per ton (vs INR4,329 in Q1 and INR4,245 YoY)
  • Fuel mix: Imported coal 75%, pet coke 11%, Indian coal 2%, alternatives 12%
  • Thermal substitution rate (AFR): 5% (improving from 2-2.5% previously)

Operational Highlights

Capacity Expansion:

  • UAE subsidiary (Union Cement Company) commissioned 3 million ton cement mill in September 2026
  • Total UAE capacity now 7 million tons per annum
  • Greenfield integrated plant in Meghalaya progressing, expected commissioning March 2028
  • Target to reach 80 million tons capacity in near term

Ready-Mix Concrete Business:

  • Volume: 2.73 lakh cubic meters (up 153% YoY)
  • Revenue: INR129 crore (up 182% YoY)
  • Network: 35 plants (28 commercial + 7 captive)
  • Business remained EBITDA positive

Sustainability Initiatives:

  • Green electricity: 65.2% of total consumption
  • Green power capacity: 667 MW
  • Additional 80 MW projects in progress
  • All locations operate on zero liquid discharge basis
  • Water quality index >8x in FY26

Capital Expenditure & Financial Position

  • H1 FY27 capex: INR895 crore
  • H2 FY27 capex guidance: INR700-800 crore
  • Consolidated net cash: INR8,168 crore
  • Tax rate: 31-32% (old tax regime)

Market & Product Strategy

  • Premium product mix: 29% (target to cross 40%)
  • Trade/non-trade mix: 61% trade, 39% non-trade
  • Blended cement share: 58% (vs 68% YoY)
  • Regional growth: Balanced across regions with South leading
  • New product launches: Bangur Total (waterproofing cement)

Outlook & Guidance

Demand Environment:

  • Infrastructure investment, urbanization supportive
  • Weak monsoon may affect rural demand temporarily
  • Industry demand growth estimated at 7-10% in Q2
  • Company expects to grow slightly better than industry

Volume Guidance:

  • FY27 volume target: 40-41 million tons (possibly reaching 41 million tons)

Cost Guidance:

  • Q3 FY27 fuel cost expected: ~INR2.20/kCal
  • Inventory expected to normalize to INR60-70 crore by year-end

Operational Guidance:

  • Focus on increasing alternate fuel consumption beyond current 5%
  • Logistics optimization through railway facilities and EV testing
  • Continued premiumization strategy

Q&A Key Points

Fuel Costs: Q2 at INR2.09/kCal, Q3 expected ~INR2.20

Inventory: Increased due to 33% higher clinker production, expected to be consumed in H2

Volume Growth: Company to outperform industry growth (7%+)

Pricing: October better than September, focus on premium products

Freight Costs: Declined due to run-to-market optimization, railway discounts, and data-driven processes

Meghalaya Plant: Construction to start soon after state government clearance, commissioning expected March 2028

China Strategy: Opening office for equipment sourcing learning, initially through UAE

UAE Operations: Expect 4-5 million tons annual volume with 30% utilization from new capacity

Other Business Updates

  • Working capital: Trade receivables increased by INR300 crore
  • Rail mix: 8.5% (vs 11% YoY and 9% Q1)
  • Lead distance: 427 km (vs 445 km Q1 and 441 km YoY)
  • Conversion factor: 1.51