“Maybe we are entering into demand month, so prices may go up a little bit. But it is not going to be that steep increase in this quarter,” says Arun Shukla, President & Director, JK Lakshmi Cement.

And surely a very good set of numbers, whether you look at it year on year basis or sequentially. But let us talk about realisations is what I want to start with. Because cement prices, they have started seeing a decline since the month of November. Now, what channel checks are suggesting that cement companies may actually take a bit of a price hike as well? Is that something you would concur with? What is your view on this?
Yes, we had a very good set of numbers last quarter and kind of actions which we have taken in the last few quarters, that is getting realised now. We have done better than industry in terms of cost. We have done better in terms of improving our margin as well. As far as prices go, yes I think prices have not been so impressive. If you compare prices last quarter over the preceding quarter, I think increase is about 1 to 2% only. Year-on-year basis also, this is almost flat. But what is helping cement industry to improve the margin is reduction in fuel and power costs. So on an average, reduction has been about more than 20-22%. We have done better than that. Our reduction is more than 25%. And similarly, I think raw material costs and other efficiency actions which we have been driving, I think that is getting realised. So on price front, yes advantage is coming out of the cost reduction only. Prices have not been improved. And I see this quarter also prices are going to be range bound. Maybe we are entering into demand month, so prices may go up a little bit. But it is not going to be that steep increase in this quarter.The management had actually by the end of Q2 actually trimmed the volume growth guidance to about 12-15% or so from 19% earlier for FY24. Are you on track to achieve this revised guidance that you all have set in? And also if you could tell me about any volume growth guidance you have pencilled in for FY25, given that the company is going to undertake very aggressive capex plans, is not it?
Yes, yes. So volume, I think we have trimmed down our focus a little bit. And the reason for that was that we had some tool manufacturing arrangements and we felt that that is not adding much value. So we thought of kind of putting focus in our own installations. So even if you take out that outsource volume, our growth has been quite good. Our sales numbers are up by 8%, which is more than the industry. Last quarter, industry has grown by about 6%. We have grown by 8%. Even our top line also has grown by 9%. So we have done better. Yes, of course, I think we have trimmed it down because of the reason I told.

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Right. So when you will be achieving this 12%?
I had mentioned that we will achieve 1000 rupees EBITDA per tonne. And I mentioned that we are going to achieve this soon. So I think that soon has come, we have achieved more than 1000 rupees EBITDA per tonne last month. And that is what the, first milestone which we have been trying for the last few quarters. And now our endeavour and the focus is to kind of improve from here.

That was my next question. So you will be seeing an improvement in terms of EBITDA per tonne as well, already achieved that 1000 per tonne mark, which you have said. And also just a confirmation, sir, so this 12 to 15% guidance is what you will achieve in FY24, right?

Okay. And so then moving on, then, you also approved a fundraise of Rs 2,500 crores. And one of the objectives, stated is that inorganic growth is something that you will be looking at. Anything concrete so far that you are seeing in terms of an opportunity coming in on the inorganic growth front? And what are the acquisitions on the anvil now?
So right now our focus is on organic growth only. And that is why we have announced a capex of Rs 2,500 crores. We are going to add 4.6 million tonne capacity in phases. First phase is going to be about half of it, about 2.5 million tonne. Second phase is 2.1 million tonne that is what our plan is. As I told before that our plan is to reach to 30 million tonne by 2030. We are well on track with this 4.6 million tonne and other internal improvisation will be about, 22-23 million tonne maybe in the next two to three years’ time.

And with other, mine license which we have got in north and western part of India, where we have already started working on acquiring land and getting all those clearances. And if that come in place, then we are well on track of achieving 30 million tonne. So right now focus is on organic growth only. We are not looking at inorganic opportunity. But yes, if something comes up, which is very impressive, and that is also kind of complementing our strategy, then definitely we will look at that as well.

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