Ladies and gentlemen, good day, and welcome to Star Cement Limited Earnings Call for Quarter and 9 Months Ended 31st December 2024, hosted by PhillipCapital (India) Private Limited. [Operator Instructions]
I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.
Yes. Thank you, Michelle. Good evening, everyone. On behalf of PhillipCapital (India) Private Limited, we welcome you to the Star Cement Q3 and 9 Month FY '25 Call. On the call, we have with us Mr. Dilip Agarwal, he's the Chief Commercial and Corporate Affairs Officer of Star Cement; and Mr. Manoj Agarwal, who is the CFO of the company.
At this point of time, I'll have to hand over the floor to Mr. Dilip Agarwal for his opening remarks, which will be followed by interactive Q&A. Thank you, and over to you, Dilip, sir.
So good evening, everyone. Myself, Dilip Agarwal, Chief Commercial and Corporate Affairs Officer for Star Cement. I welcome you all in this conference call for discussing Q3 numbers and YTD numbers of FY '25. One small clarification that Mr. Tushar Bhajanka was very willing to join, but he has been traveling. So he has not been able to join this call. Otherwise with me my CFO, Mr. Manoj Agarwal is here. So he will take you through all the numbers of Q3, and then we will try to answer your question in question-answer-session when it opens. Thanks.
Over to Manoj.
Yes. Hi, friends. Very good afternoon. I on behalf of Star Cement Limited, welcome you all to our con call for discussing our number of Q3 FY '25 and 9 months ended 31st December '24. I would like to clarify that we will be discussing the historical numbers and there is no invitation to invest.
Having said that now, I will just take you through the Q3 number followed by YTD number. Starting from clinker production. During the quarter ended December '24, we have produced 6.42 lakh tonnes of clinker as against 7.37 lakh tonnes same quarter last year. So far as cement production is concerned, we have produced 10.82 lakh tonnes this quarter as against 9.81 lakh tonnes same quarter last year.
Now I will take you through the sales volume. During the quarter, we have sold 10.60 lakh tonnes of cement and 0.07 lakh tonnes of clinker as against 9.70 lakh tonnes of cement, that means of approx 10% growth is there. This is as far as cement and clinker sale is concerned. As far as geographic distribution of cement is concerned, in Northeast, we have sold around 8.30 lakh tonnes as against 7.32 lakh tonnes during same quarter last year. And as far as outside Northeast is concerned, we have sold 2.31 lakh tonnes of cement this quarter as against 2.38 lakh tonnes same quarter last year. In terms of blend mix, it is almost 11% of OPC and the rest is PPC. These are the quantitative numbers of the quarter.
Now I will take you through the Financials. The total revenue figure this quarter is around INR 719 crores as against INR 651 crores same period last year. As far as EBITDA figure is concerned, this quarter we have done an EBITDA of around INR 107 crores as against INR 153 crores last year. PAT is INR 9 crores as against INR 74 crores in the same period last year. The decrease in PAT on account of increased depreciation due to capitalization of our 2 million tonnes grinding unit at Guwahati and also the clinker plant at Lumshnong. On per tonne EBITDA front it is INR 1,000 during this quarter as against INR 1,576 per tonne same quarter last year. This is what our quarterly numbers of third quarter.
The total revenue figure for the 9 months ended 31st December '24 is around INR 2,111 crores as against INR 1,997 crores same period last year. As far as EBITDA figure is concerned, during the 9 months ended December '24, we have done an EBITDA of around INR 321 crores as against INR 395 crores last year. PAT is INR 46 crores as against INR 207 crores in same period last year. The decrease is on account of increased depression, as explained earlier. On per tonne EBITDA front, it is INR 1,005 during the half year-ended September '24 as against INR 1,304 per tonne same period last year. These are the quarterly and year-to-date numbers.
Now I request all of you if you have any query, you can ask the same, and I will request Vaibhav to moderate the query wherever it requires. Thank you.
[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.
Sir, first couple of data points. Trade share, premium share, lead distance and KKL for this quarter.
So share of trade in Q3 was around 81% and rest has been moderate. And what else Shravan you asked for?
Premium share, lead distance, and KKL cost.
Premium share is -- this quarter is 12%.
12%. Lead distance?
Lead distance 222 kilometers.
222?
Yes.
And KKL cost?
KKL cost is same, similar to the 1.5 -- around 1.5. That was more or less in the same line as last quarter.
Okay. Now the basic thing, so how do we now see in terms of the volume growth for the fourth quarter and for FY '26?
See, Dilip here. We are expecting a volume growth of around 7% to 8% for the full year and around 10% in Q4.
Okay. Got it. And for next year, how one can look at...
We must add here that in Northeast market, this year demand was flattish kind of thing. If you consider the demand of the industry as a whole, then the demand was flattish, we are expecting to grow by 6, 7 years this year. And next year also, we are expecting to grow by...
12% to 15%...
12% to 15% for next year.
Sorry sir, 12% to 15% you said.
Yes. We are talking about our growth.
Yes, yes, 12% to 15%. Okay. Got it. And sir, in terms of the profitability, so we were looking at a decent in terms of INR 220 crores, INR 230 crores-odd kind of EBITDA in the fourth quarter of this year.
That we remain at the same number that we should be closing around the similar number, given the issues that we faced in Q3 in terms of stabilization time of our new clinkerization unit and then followed by some purchase of clinker from outside. Otherwise, our Q3 numbers would have been better. But we are expecting that Q4 will be -- will pan out much better than earlier quarters. So that is what our EBITDA prediction is around INR 225 crores to INR 230 crores on the calibrated side.
Okay. Got it. And now sir, how one can look at in terms of the pricing, so current prices, so January until now versus the third quarter average for Northeast and outside Northeast.
What I can add here that prices so far as Northeast is concerned, let me take first Northeast market. So as I said that demand was flattish so far as industry is concerned in this current financial year. And price is looking stable as of now. And it should remain stable or with maybe a big positive side, we are not expecting a price cut going forward in coming months. So far as outside Northeast is concerned, so prices have taken everything, and I think volume has also, there is a degrowth in volume also.
Okay. So broadly, if somebody looks at current prices, whatever is for outside Northeast, how much it would be lower versus the third quarter average?
More or less third quarter and fourth quarter because already third quarter already prices have gone down in the outside Northeast. So we are hopeful that there will be no further decrease will not be there. Maybe Bihar, we have done an increase in maybe November, December, the increase was there. So that full impact will come only in this quarter. So prices from here, even if some -- it will be either flat or there will be increase in prices.
Okay. Okay. Got it. And on the CapEx front, lastly sir, time line for both the expansion Silchar and Jorhat. So is there any change in the time line? And in terms of the CapEx, how much...
FY '26, we have told for Silchar and for Jorhat FY '27, that is still remains the same.
Okay. So Silchar, I think last time we said third quarter of FY '26. So now it maybe...
That is why on December '25 or maybe FY '26.
Okay. Got it. And in terms of the CapEx, how much we have done and for full year or this and next year, how much the CapEx we are planning to do considering everything, the AAC block plus the WHRS plus all the expansions, AFR, everything.
So actually, major CapEx which is left out is now Silchar and Jorhat only, right? So Jorhat full CapEx should pan out in next 1, 1.5 years or 18, 21 -- 2 years, you can say from now. And Silchar, we are hopeful to commission in FY '26, as my colleague rightly said. So the full projected CapEx of Silchar should get exhausted during the next financial year. So far as AAC block project is concerned, it is in advanced stage except for some tidbits. I think in this quarter, the project should be commissioned.
Sir, in terms of the absolute number, if you can help us how much we have already done CapEx in 9 months? And for fourth quarter, how much and for FY '26 and '27, if you can -- in terms of the absolute value, if you can specify the CapEx.
So 9 months, we have already done around INR 440 crores. And rest of the period in this quarter, I think it should be around 200 -- between INR 200 crores, INR 250 crores.
Okay. Next year, sir. FY '26 and '27 sir.
FY '26 should be around INR 600 and say another INR 300 crores to INR 400 crores you can take for FY '27.
Okay. Lastly, the incentive for third quarter and then I will be in queue.
Yes, Manoj. Please share.
Yes. What do you want to know Shravan?
Incentive for third quarter.
Third quarter total incentive is INR 43 crores.
[Operator Instructions] The next question is from the line of Rajesh Ravi from HDFC Securities.
Sir, my first question pertains to this quarter, you mentioned that there was impact of one-off clinker purchase because of the new line was getting stabilized. However, could you explain what led to a sharp jump in the other expenses? And what would be the normalized run rate? Because earlier, it was close to INR 800 to INR 900. This quarter, it is almost close to INR 1,170...
Rajesh, the other expenses because we have one -- because the shutdown cost was there. It is a one-off kind of thing is INR 10 crores is the one-off thing, okay, that will not be there in the next quarter.
What happens, Rajesh, let me explain that whenever you take a maintenance shutdown for any reason, either for a stabilization or normal shutdown. So 2 things which happen. One, we have to incur some cost for maintenance. On the other side because of lower production on account of maintenance shutdown, your fixed cost doesn't get spread over the volume. Since it was normally after October, the season starts of cement in Northeast. So you have a demand growth also during that time as compared to second quarter. So we had to -- just to maintain the market share and all, we had to purchase some outside clinker also. So outside clinker is always costly. So everything taken together, it has a beating on the bottom lines.
So if we want to strip out the one-off costs, including maintenance and the one-off clinker purchases.
Can you speak a bit loudly, Rajesh, please?
I'm saying, okay. So I'm saying if we strip out this INR 10 crore and the clinker purchase cost, how much would be the impact in the Q3?
Because 1.5 lakh tonnes, we have purchased clinker, that is almost INR 30 crores. INR 30 crores-plus, INR 10 crores shutdown - these are shutdown costs. So INR 40 crores is the one-off kind of thing in this quarter.
Which will not be recurring in subsequent quarters?
Yes, yes.
Okay. So almost INR 400-odd impact because of these 2 elements.
There will be 2 things in Q4, which were there in Q3 and will not be there in Q4 is, one is, no purchase cost of clinker and another is additional shutdown cost.
Okay. And this logistics cost, Q4, will it remain at similar elevated level or would it again come down to...
Normally happens because everybody has the volume pressure. So Q4, there is always some price increase in freight cost is something there. So there may be -- might be...
On the gap of seasonality. Otherwise, there is no long-term or any such kind of cost.
Okay. Okay. So -- and this WHR (sic) [ WHRS ] you will be commissioning, this will become operational in Q4, 12 megawatt?
Yes, yes, yes. New WHR will be operational in this quarter.
New WHR. Okay. And sir, lastly, on the competitive landscape, we believe that the Dalmia project is still far away. But once that skill gets started next year, early next year, what sort of scenario would that lead to pricing erosion in your market?
Rajesh, I don't think that -- yes, this can happen theoretically, yes. But I don't think that there should be any call on price discipline. So we do not expect much of prices getting down. And we can discuss it at appropriate time when Dalmia is already there in the market.
And sir, one last question. If I see the trade sale trend and the trend for your trade sales, start of FY '24, we were close to almost 89%, 90% of the trade sale volume, which has come down to 81%. So is there any change aggressiveness in the non-trade market? Or it is just a one-off that we are close to 81% in Q3?
No, there is no change. The only change is that you are aware that we have commissioned a 2 million grinding unit also in this current financial year. And we have also commissioned the clinker unit at Lumshnong. So earlier, our production was just matching the market requirement. Now with the increased capacity, we are testing what else so far as non-trade infrastructure market is concerned. So that -- now our clinker production is going to almost stabilized. So on a day-to-day basis, we are utilizing around 70% of capacity of the new unit -- clinker unit.
Similar is the case with new grinding unit at Guwahati. So we are exploring -- since earlier, we were not focusing too much on non-trade market because of lower realization on non-trade as compared to trade. Now with increased volume, we'll definitely look for some share in non-trade markets also. So that is why pie of non-trade is looking a bit higher this time against 10%, 11% to 18%. But with increased volume, I think it should again go down.
The next question is from the line of Uttam Kumar Srimal from Axis Securities Limited.
Sir, your premium cement sales has improved to 12% from 9% last year. So where do you see this premium cement still moving ahead?
Because whatever growth we are doing, whatever growth was there is in the Northeast market because as Dilip ji told that we have -- the Northeast markets have not grown. 9 months it is a flattish kind of thing, but still we have grown more around 10%. So whatever till for the -- growth was there, it is from Northeast. And outside Northeast, prices were lower and also we have a clinker constraint. So we have not put much of the effort for keeping the volume in outside Northeast. But once -- now everything is streamlined, now we will see if the prices will improve, then we will also focus on the outside Northeast.
Okay. And sir, what has been the capacity utilization of our Siliguri plant during this quarter?
Siliguri plant is still -- because last year also, it is around 45% till now. So we are hopeful that...
See, Uttam, Siliguri plant mainly caters the markets of West Bengal and Bihar. So as we said earlier that markets of outside Northeast have not grown that way. And we had some clinker constraint also, and we had to buy from outside too. So we are not focusing upon Siliguri grinding unit and realization-wise also Northeast markets are much, much better than Bengal and Bihar markets. That is why capacity utilization has not increased as compared to last year. But during this current quarter, we are expecting some improvement in rest of Eastern Siliguri capital -- Siliguri capacity utilization. So -- but in any case, our prime focus will still remain with Northeast market so far as overall price is concerned.
Okay. And sir, what has been our fuel mix during this quarter, pet coke, biomass and coal?
Yes. What you want to know biomass -- because if you get the CSR budget replacement this quarter is around 13% kind of thing.
Okay. So overall, sir, fuel mix last time it was -- 20% was Nagaland coal, 20% biomass...
From the fuel supply arrangement, 13% is the biomass and 20% around is Nagaland coal. So this is the mix for this quarter.
[Operator Instructions] The next question is from the line of Nihar Dave from IIFL Capital.
So sir, like you said, you purchased INR 30 crores of clinker from outside. So have we had no clinker production at all? Or what is the clinker production for this quarter?
The clinker production during the quarter have already given the number. This quarter, we have produced 6.42 lakh tonnes clinker, we have produced. But 2 things are there. One is that the new plant was under step a little bit took more time to stabilize. And second thing is that because the road was also problem because the...
There were 2 constraints actually. One was, as we already elaborated that our new clinker line was under stabilization. And the second was that there were some issues so far as [indiscernible] road highway is concerned, there is some long time repair work, which was due for a long time. Now government has released fund and the work is going on full fledged. So there were issues of availability of vacuums, transport also. So that is why dispatches were a bit low. We are expecting this road to complete in next 1 month's time, but we are trying some alternate way of dispatching in terms of alternate routes and all. So these -- both the cases taken together, our -- this number is looking like that.
Okay. So even for the most part of this quarter also, that road is not completed. So we should see a similar sort of scenario for this quarter?
It will not be there.
Purchase will not be there. I mean dispatch of cement from our Lumshnong plant, that's it. We have 2 plants. One is at Lumshnong, where capacity is very minimal as compared to rest of the plant like Guwahati and Siliguri. But whatever dispatches which we are supposed to take place from Lumshnong because of this road issue, it cannot pan out like that as expected. And it is a one-off issue. I think in this quarter, it should get resolved. And we have -- we are already doing good numbers this quarter. So I don't think there should be an issue this quarter so far anybody is concerned. And clinker production is already now in line with our expectation. So both the things as of now it looks addressed.
Okay. Perfect. And sir, just one last question. In our regional mix in Northeast and East, so what was our sales in the Eastern region?
So Northeast was around 3/4 of the pie, so it's around 75 -- sorry 79% of the total sales and around 20%, 21% was outside last quarter.
[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital.
Sir, just needed a clarity in terms of the UltraTech stake from the existing promoter. So any comment in terms of the future plan? Or is there a possibility that they can have a higher stake?
I think we have already clarified this issue in past also when this issue had come up. Our rest of the promoters stand committed about the future plan of Star Cement. There is no such plan of further dilution so far as the rest of the promoters are concerned. So whatever we have told earlier in this issue, I think we reiterate the same thing.
Okay. And Manoj, sir, for this quarter, third quarter in terms of the Northeast EBITDA per tonne and outside Northeast would be how much?
Just a moment, let me.
It is around -- I think those numbers are not bifurcated. Northeast and ROE EBITDA are not separated. So as of now, we'll not be in a position to comment upon EBITDA in Northeast and rest of Northeast.
Okay. Okay. No issue, sir. Second, in terms of our -- the future expansion in Rajasthan, so to reach a 20 million tonne capacity by FY '30. So that stand still remains intact. Any update there in terms of the land acquisition or anything?
Yes. I said in earlier calls that we have already won the bid for Rajasthan mines. The project was around 65 million tonnes. The exploration for testing is going on. And side-by-side, this land acquisition process is also going on. So we stand committed to Rajasthan project. And at appropriate time, we will definitely discuss the time line, et cetera, also. But yes, as of now, the Rajasthan is on.
Yes. So sir, just broadly looking at post both Silchar and Jorhat, we will be reaching to close to 11.67 million tonne capacity at cement level. And so to reach a 20 million tonne, so that is a kind of 8 million tonne, 8.3 million tonne kind of additional capacity we need. And in terms of the time line post FY '27, it will be just 3 years. So obviously, we need to start doing a CapEx. So just trying to understand broader level, if somebody wants to understand how much CapEx we would be needing to reach a 20 million tonne capacity?
So see, as of now, so far as cement is concerned, we are already close to 8 million, 7.7 MTPA precisely. Another 4 million will get added in Jorhat in future. So it will give us a number of around 12 million tonnes. And how much is Rajasthan? So far as 20 million tonnes by 2030 is concerned. So still we are left with 6 full years to conceive the start and complete the project. And with our experience of rolling out the project, we do not find any issue in reaching that projected capacity. So far as CapEx is concerned, so you can calculate it the way now it is cost per tonne of cement is coming so far as rolling out a greenfield project is concerned. So that -- the number should be around that only.
So is it fair to assume INR 900 crores to INR 1,000 crores-odd for greenfield kind of 1 million tonne kind of a CapEx? That's the way one can look at? Or it would be INR 700 crores, INR 800 crores?
Yes, you can consider 1 million because if the capacity is bigger, then the average will come down. That we can...
I think for a 2 million -- 3 million tonne grinding... So the last project which we have commissioned, this is only clinker, 3.3 million tonnes. So the cost was around INR 1,300 crores. And if you add cement of similar capacity, then maybe say, another INR 600 crores. So INR 200 crores -- INR 2,000 crores, you can consider for around 3 million tonnes of capacity. So you can calculate the number accordingly. So around INR 4,000 crores, you can assume.
Okay. Got it. But just trying to structurally, so obviously, the Northeast is the highest in terms of the profitability. So now we move the -- I assume that the entire new capacity would be coming outside Northeast, so including the Rajasthan one. So don't we think that in terms of the ROE, ROCE, that would be kind of a lower versus what right now we would be getting at the Northeast?
As you know that cement is a business of volume. And if you are getting a good EBITDA in Northeast and not fairly that kind of EBITDA in the rest of Northeast or rest of East also. But on a blended basis, you will find that if you consider Northeast also, then we should find out better than what is happening today in the cement industry.
And still 3, 4 -- because Rajasthan will take 3 years time and then who will know what is happening in the market in 2, 3 years, the prices where it will go because obviously, prices will be going to increase from here because everybody's cost will going to increase after 2030. So prices, nobody knows predict what is the market demand and prices.
That is one. And secondly, in industry, a lot of consolidations are happening you know. So I don't think there should be much of waiting on prices.
Got it. And in terms of incentive now, so this quarter INR 43 crores, so we were previously looking at INR 200 crores-odd annual. So from this quarter, fourth quarter onwards kind of INR 50 crores, INR 60 crores quarterly run rate...
Yes. See, everything is related with volume. As we said earlier that we had a volume constraint because of our stabilization of the clinkerization. So that is why this INR 43 crores you are looking at. But in the coming quarter it should be INR 50 crores plus.
Got it. So that's what I'm just trying to understand. So even, let's say, in the fourth quarter, if you would be doing whatever you said kind of a 10% kind of a growth, so would be 1.5 million tonnes, 1.6 million-odd tonnes. So even if I just do the math, so next year, we should be doing a minimum 5.5 million tonnes to 5.7 million tonnes, which should be kind of closer to a 20% growth, but we were saying just a 12% kind of a growth. So...
20% growth.
20, because we will be considering maybe at least whatever we are projecting 12% to 15% growth over the next year we are projecting, we will be targeting. If the market grows better than this, then obviously, because then it may increase. But we are targeting 12% to 15% for the next year. Maybe this year, we will close down to 4.7%. Then you can take it 15% from here. So 5.5%, 5.4%, 5.5%.
The next question is from the line of Milind Raginwar from BOB Capital Markets Limited.
So essentially, the headroom that we have [Technical Difficulty] around 4.7, 4.8...
Can you repeat...
Yes, your voice is very low.
Hello?
Yes. Please proceed, sir. You are audible now.
Yes. So 4.7, 4.8 of the kind of capacity utilization at that level would be still much lower than what our capacity currently is for FY '24 at around 7.7. Now we are taking 2 big leaps in FY '26 and '27. We move to around 2 million tonnes each in FY '26 and '27. So can you just call out on the kind of the growth scenario, demand scenario or major CapEx program of the government as well as some private CapEx that's happening so that we can get some fair idea on how the demand would be in the region?
Yes. Actually, you might have seen that the kind of budget allocation the central government is doing for Northeast infrastructure development. Very recently, I had a meeting in government last week only. And we have been given to understand that their infrastructure projection of -- for the Northeast is INR 1 lakh crores. So -- and the kind of development, it's not only the numbers what they are saying. We are also witnessing on the ground projects coming out and getting rolled out. So we are expecting a good growth in infrastructure sector. And that is why we have planned 2 grinding units looking at the growth prospect, one in Silchar and one in Jorhat.
Let me add here that Jorhat is a kind of location, it is called Upper Assam. So Upper Assam, Jorhat, the lead distance from Guwahati to Jorhat is around 300 kilometers. So that will give us an added advantage in the catchment area of Jorhat markets, where we can push directly our brand to the catchment area of Jorhat. And lot of infrastructure projects are coming in Jorhat side also and in this proposed grinding unit at Silchar side also. So we are expecting a good growth in non-trade segment. And that is why these 2 projects have been planned and now in the process of getting rolled out one after another.
So we are not expecting -- we are -- coming to your question, that sudden jump in capacity. So we are expecting that we should be able to utilize the capacity of both the plants gradually. And in 3, 4 years, I think from now or -- and by the time this capacity will be commissioned, Jorhat in FY -- sorry, Silchar in FY '26 and Jorhat in FY '27. By that time, growth will -- some growth will always be coming. And then after that, in next 2, 3 years, we'll be able to utilize the capacity fully. That is what we expect as of now.
And one thing to add because the cement is -- which kind of seasonality is there. So at time, you can use 100% because even if you are yearly, you are still adding 70% capacity. But in season time, you're using it 100%. So that is the thing -- in the industry we're working only 75%.
Unless you have I mean, surplus capacity, you won't be able to serve the increased demand during the season time post October or from early November till April. So to take care of those demands, you have to have the capacity.
Okay. That was quite helpful, sir. The second thing I wanted to understand was you had given -- you had called out on the other expenditure one-offs and also on the RM cost. Similarly, the freight, anything that you would like to call out on the savings that you would be having in the fourth quarter over third quarter.
Freight cost, 2 things are there. One is there because we have added 120 vehicles, okay, for -- because the new plant -- clinker plant because we have a requirement of more trucks. So we have been using our own fleet for carrying of clinker, so that only -- not only we have a flexibility of using our fleet utilizing, but it's still because we can take on the competitors so that they cannot increase much of the freight. They cannot -- we can bargain better negotiation with the transporters. So that is one plus advantage. And we are seeing is that we are getting a very good what you can say, very good saving in when we are operating our fleet. So that is the one thing which will be -- because the clinker will be -- because now the roads are okay and all this. So we will be getting that advantage -- fleet advantage from using the entire fleet.
In addition to that, because the March, you know because January to March quarter, generally, there is some increase in the freight will be there because everybody has the year-end pressure. But we think that there may be -- might be some increase in the overall number, there may be some decrease, but it is not so significant. It may be nominal thing.
Yes. So I was just coming to now that we are about 5 weeks in the fourth quarter, what would be the pricing over the average of the third quarter?
Average prices was -- what do you want to -- annuity prices?
Can you speak a bit loudly?
Sir, am I audible now?
Yes, please.
Yes. So I was just coming to now that we are under -- about 5 weeks in the fourth quarter, what would be the pricing scenario over the average of third quarter?
As I said earlier, in the markets of Northeast, prices are more or less stable. From here, there should not be any bidding rather we are expecting some growth in prices. Similar is the kind of story there in rest of East also. From here now on in rest of East, I mean, Bihar and Bengal market where we are there, we are expecting a stable kind of concept.
The next question is from the line of Uttam Kumar Srimal from Axis Securities Limited.
Manoj ji, what would be our gross and net debt currently?
Gross and net...
Yes, net, yes.
Gross and net...
Debt.
Sorry?
Gross and net debt in the books.
Gross and net debt, okay.
So we have a total INR 420 crores is -- currently December is around INR 420 crores and net debt is around INR 400 crores.
Net debt is around INR 400 crores.
Yes.
Okay. And sir, in terms of how much Assam -- especially Assam region would be contributing to the Northeast revenue?
Around, it should be around 55% or so.
Ladies and gentlemen, this will be the last question for today, which is from the line of Shravan Shah from Dolat Capital.
Sir, last 2 things. First, currently or maybe for the third quarter average, just if you can tell us in terms of the trade and nontrade price gap in the Northeast.
Nontrade prices are generally INR 25 to INR 30 gap is there.
See, as of now, trade to nontrade gap is INR 25, INR 30 or maybe a bit more also. But with the coming increased capacity of ours, the gap may further increase, but not much. But on a normative basis, it is around INR 25 to INR 30 only.
Got it. And secondly, sir, if you can just help us the new clinker that we have started 3.3. For third quarter, how much we would have produced or entire the production that we have mentioned 6.42 lakh tonnes, so how much from that, the new plant?
I think we should be able to utilize around how much...
Because this quarter because of the stabilization issue was there, but we will be utilizing 70 -- this quarter, we are hopeful that it will be 70%, 75% we will be utilizing this quarter.
No, that I understood that now the stabilization has happened, so the utilization will increase. Sir just trying to understand for third quarter, how much we would have produced. Was it -- some production was there or there was nothing.
Yes, production was obviously there.
Line 3 was actually not much number so far as third quarter.
Because right now, we don't have the number.
Okay. But third quarter actually in the first month itself, this issue came up. And this lingered upon almost 2 months, I believe. So third quarter Line 3 number is not -- I don't -- we don't have separately that number as of now. But...
Directionally, just wanted to understand. But going forward now as we say that we will be using...
70% this quarter we are...
No, no. What I'm trying to...
Plant is performing well now, and we are witnessing a good performance as of now. So we don't foresee any issue here on now so far as capacity utilization is concerned of Line 3.
Yes. Got it, sir. But what I'm trying to understand is that the old one, the 2.8 million tonne clinker at the old plant. So once we use this new one, 70%, 75%, so are we also significantly reducing the utilization of the old one?
No, because clinker is always in demand.
As of now, we are operating all the 3 Lines. So we are not expecting -- we cannot say about the off-season time of rainy season as of now. But so far as season time is concerned, all 3 plants will run.
Thank you. As that was the last question for today, I would now like to hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.
Yes. Thank you, Michelle. Sir, I have one question, especially for Dilip sir. Dilip sir, I believe you have spent a very long years in the cement industry, and you were at Star Cement in your past also, and then you joined some other cement company and then you came back to Star Cement. And this is your first public appearance after joining back Star Cement. So I just -- you have categorically clarified on this call that UltraTech buyout and 8% buyout in Star Cement is nothing that calls for anything more to think at this point of time. But I want to know from you that because you've spent so much -- so many long years in Northeast cement industry, how do you foresee the Northeast industry in terms of consolidation, do you see that there are other smaller players in the industry who are being targeted by larger players? Or do you think that their promoters might exit or there is something on the cards in consolidation of Northeast? What is your say about broader Northeast market, not just about Star Cement?
See, so far as consolidation is concerned, Vaibhav, you are aware that most of the capacity are there so far as cement is concerned in Meghalaya only because of proximity of raw material. And if you take Star and Dalmia, both taken together in the complete capacity of the Northeast, they fit in around 60% of the total capacity. And there are around 8 or 9 operating plants in -- rest all are very smaller one. So I don't think if anybody goes for consolidation. First of all, I don't think there is any opportunity of buying out or consolidating so far as a smaller -- all of them -- most of them are less than 1 million tonne plant, right?
So that is one. So that kind of opportunity, I don't think that it exists, number one. Number 2, putting a new plant for a new company or outside company, you know that they are -- as compared to rest of India, Northeast causes a lot of challenges in terms of land acquisition, local issues and all. So the things are not on the very brighter side so far as consolidation or putting a new plant is concerned. If you go and put a new plant, if you are able to do it considering all the hurdles also, then also minimum 4 to 5 years is the minimum time line.
So I don't think that in the immediate future or near future, something big is going to happen in Northeast. So far as capacity or consolidation is concerned, Dalmia is already is expanding. We are also -- we have expanded and we are also expanding in Northeast. There is some more little expansions coming up in the existing plant, but not of that great capacities. So I don't foresee any challenge so far as surplus capacity is concerned. As I told you that in infrastructure, there's a lot of infrastructure activity going on. And Government of India is focusing upon Northeast so far as infrastructure growth and budget allocation is concerned. And it's not just for the sake of saying, it's happening also on the ground, and we are able to see the way it has been panning out in Northeast.
So on the demand side also, we are expecting a good number to roll out in coming years, good growth in the demand. So that is what I foresee. I have been working in Northeast market from last 14, 15 years, as you know. So the kind of growth we are able to see now as compared to previous years, it gives a very promising future as far as cement industry is concerned.
I take your point that the capacities in Northeast are quite small in terms of their size. They are mostly 1 million tonnes to 2 million tonnes or maybe 0.5 million tonne kind of capacity also. But having said so, relative to the size of the market, the size of the market itself is quite small versus the rest of the India. So from that perspective, don't you think even if like 1 million tonne or a couple of million tonne capacity is available, larger players might be interested in taking them more or don't you think so?
See, I don't know whether the larger player would be interested in adding up 0.5 million tonne or 0.7 million tonne or even 1 million tonne. There is no cement plant except us and Dalmia. There is only one that is Meghalaya cement, they are having around 1.1 million tonne or 1.2 million tonne capacity. Rest all are less than 0.7 million tonne or 0.8 million tonne. So I don't think any -- even if larger player comes and they consolidate also, then the capacity will remain the same. Installed capacity will remain the same.
If you are going to install a new cement plant of, say, 2 million tonnes, 3 million tonnes, it will take 4, 5, 6 years of time, not less than 4, 5 years, if you start even today from scratch, then there are issues related to mining, et cetera, getting mining clearances. So these are very long time-taking issues. And I -- honestly, I don't see any that kind of growth opportunity so far as capacity addition by some outside player is considered.
Got it, sir. Thank you very much, Dilip sir. And on behalf of PhillipCapital, I would like to thank all the participants joining the call and also thank the management of Star Cement for the call. Thank you very much, sir. Michelle, you may now conclude the call. Thank you.
So thanks to all the participants from the Star Cement side also. Thanks, Vaibhav for moderating and coordinating the call.
Thank you, sir.
Thank you so much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of PhillipCapital (India) Private Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines.
