Q Earnings Call - India Cements

Transcription

1 Q Earnings Call - India Cements Dt-6 Feb 12 Ladies and gentlemen, good day and welcome to The India Cements Q3 FY12 Results Conference Call, hosted by Tata Securities Limited. As a reminder for the duration of this conference all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Please note that this conference is being recorded. At this time I would now like to hand the conference over to Mr. Niraj Agarwalla. Thank you, and over to you sir. Niraj Agarwalla Good evening, everyone. I welcome all the participants to the Q3 FY12 results conference call of India Cements Limited. We have with us Mr. N. Srinivasan, Vice Chairman and Managing Director of the Company; Ms. Rupa Gurunath, Whole time Director; Mr. T S Raghupathy, Executive President and Mr. V M Mohan, Joint President, Corporate Finance. Good evening ladies and gentlemen, this is Raghupathy from India Cements. First a quick comment on the all India consumption pattern for the quarter, before I take you through some of the highlights of the company's performance. During the quarter ended December 31, all India demand grew by about 10.5%; North by 15.6%, West by a very impressive 23.7%, Central region grew by 11.5%, and South by 3.3% and East by 2.3%. For the nine months ending 31, December, all India is 5.11%, North is 10.1%, West is 16.6%, Central is 7.6%, East is 3.2% and South is 4.3% % negative. Now what is very encouraging is in the months of October, November, December, particularly in November and December, the Southern region has picked up very smartly. Andhra has grown by about 12%, Tamil Nadu by about 18%, Karnataka by 8% and Kerala by 15%. Normally the period February to September is the best season that is available in this part of the country, and with this -- on the back of this very encouraging growth in November and December, going forward we believe that the growth will be in two digits in South for the next four to six months. Now the capacity utilization of the industry as a whole on all India basis was 72%, and it was 60% in South. We have clocked the capacity utilization of 66% for the first nine months period. On specific numbers, the volume during this quarter was lakh tonnes, up by about 7% as compared to 20.4 lakh tonnes year-on-year. The net plant realization increased to 3,461 per tonne against 2,904 last year the same quarter, it increased by 20%. Also the variable cost was up by about 14% primarily on account of increase in price of fuel and increase in price of domestic coal, higher usage of imported coal and on account of cost of fly ash et cetera. And the increase in power tariff by TNEB, by Tamil Nadu Electricity Board and also by Andhra. Now, thanks to better selling prices, the EBITDA for this quarter was 199 crores as compared to 133 crores during last year same quarter. EBITDA per tonne this quarter was 910 as compared to 650 in the same quarter previous year. Interest charges were higher due to replacement of FCCB with debt, and also on account of provision for ForEx fluctuation with regard to LC and pending payments which resulted in additional transaction cost. Freight and handling was also impacted by about 4% on account of increase in price of petroleum products and also the railway freight. By and large, these were the highlights in respect of volume and EBITDA and little bit on the cost. And on the power plant and the project, the power plant at Sankarnagar was lighted up the last month and it is going through trial runs and we expect in the next couple of months it should stabilize fully. And as far as Indonesia is concerned the construction of road has been completed. The bridge work is going on, but it's been raining incessantly in Indonesia and we are able to take up work only when there is no rain. But all the same, we are through with about 60% of the bridge construction and we are hopeful that the construction will get completed towards the end of February, where after we'll be able to enter the mine. And as I said overall market we believe that going forward from this month the market will be brisk. And by and large, to start with, these were the highlights I would like to capture and we'll be quite pleased to clarify any details on the specifics. Thank you. Questions And Answers

2 Thank you very much. We will now begin with the question-and-answer session. [ Instructions]. Our first question is from the line of from Edelweiss Securities. Please go ahead. Yeah. Good evening sir. Good evening. Right. Sir my first question as you said demand seems to be like appearing brisk for the coming six to eight months. So how has been the run rate for January both for the industry as well as for India Cement sir? January figures are yet to come in, but January is a month in South where we have this Sankranti holiday. Sure. And generally I believe it should be around 8% to 10%. 8% to 10% year-on-year growth? Yeah. And -- okay fine. And sir second you mentioned that the Tamil Nadu and AP grid, AP SEB basically have increased the rates further. So how much has been the increase? I believe they're proposing to increase, has it already got implemented, sir? Last year, what was the increase? Sure. The further increase, what has been proposed has not yet been implemented. So but...

3 Another Rs.0.50 that has been proposed which has not yet been implemented? The Rs.0.50 proposed is by only Andhra Pradesh or even by Tamil Nadu because I believe they also have made a proposal. Tamil Nadu is Rs.1. Tamil Nadu is Rs.1? Proposed increase to Rs. 5 per unit. So Tamil Nadu is Rs.1 and AP is another Rs.0.50? Yeah. That has been actually put for opinion and then there will be some hearing and all that. Then only it'll come into, because this has gone to the regulatory commission. Sure. Sure. And just one housekeeping question if you could just share the revenue and EBITDA of the other businesses, IPL and freight and others? IPL, the revenue was practically nil -- 4 crores was the income and EBITDA was also 4 crores. 4 crores EBITDA also? Yeah. There are practically no expenditures. And for the other businesses sir?

4 That is shipping was 10 crores of turnover and EBITDA of 1.6. EBITDA of? 1.6 crores. 1.6 crores. And windmill sir? 80 lakhs. 80 lakhs? 87 lakhs. 87 lakh revenues. Yeah. And almost entirely is the EBITDA there? Yeah, yeah. Fine. Thank you. Thank you very much, sir I'll come back for other questions. Thank you very much. Our next question is from the line of Sonali Salgaonkar from CRISIL Research. Please go ahead. Sonali Salgaonkar Good afternoon, sir. Hello?

5 Yeah, good afternoon. Yes. Sir, how much -- just wanted to understand how much of the coal requirement is imported and how much is through domestic linkage coal for India Cements? Normally it used to be around 55% to 60% of imported coal, 40% will be domestic coal. But during this quarter, because of the disruption in the availability of coal. Sonali Salgaonkar Yes. We had to use 67% of imported coal and 33% of domestic coal. Sonali Salgaonkar Sir, once your power plant gets commissioned, just needed a sense as to what percentage of the total power requirement will be met through captive power? I think as far as Tamil Nadu is concerned, the entire requirement will be through the captive power. Sonali Salgaonkar Sir so, of India Cements as a total, how much percentage of your power will be met through captive? See practically, we require around 170 megawatt of power for India Cements as a whole. Sonali Salgaonkar 170 megawatts, of which this will be around 48 megawatts. Sonali Salgaonkar About 70%, 72% is by road, balance is by rail. Sonali Salgaonkar Sir, just one last question, of -- in South India of the four states like Karnataka, Tamil Nadu, Kerala and Andhra Pradesh, could you give us a sense of any ballpark number of the nine monthly demand which has come by?

6 You mean for the first nine months, what the demand looks like? Sonali Salgaonkar Yes, and growth? Okay, give me a minute. Sonali Salgaonkar Sure. See for the first nine months, Andhra was negative 14%. Sonali Salgaonkar Tamil Nadu was practically flat. Karnataka was minus 1.9%. Kerala was 2.15% plus. Overall South was minus 4.28%. As I said in November and December the growth has been very, very encouraging and very impressive. Sonali Salgaonkar We believe that this trend will be sustained from now on till the next monsoon. Sonali Salgaonkar Sir, thank you so much. And all the best. Thank you. Thank you very much. Our next question is from the line Rajesh Kumar Ravi from Karvy Stock Broking. Please go ahead. Rajesh Kumar Ravi Good evening, sir.

7 Same to you. Rajesh Kumar Ravi Congratulations on the good set of number. Could you share the CapEx like in the terms of the power plant, the upcoming power plant in Andhra Pradesh. When would that get commissioned? Are we seeing any delays over there? See it's likely to be commissioned by March of next year, that is by the end of FY13. And the total cost is expected to be about 250 crores. Rajesh Kumar Ravi 250 crores. So what is the total CapEx that you have done in FY12 and FY13? Sorry? Rajesh Kumar Ravi See '12, FY12 we are likely to end up with around 450 crores, around 450 crores. The next two years, we expect about 500 crores will be the CapEx. Rajesh Kumar Ravi Total? Which is mainly towards this power plant and also the coal concession in Indonesia, and our normal CapEx here. Rajesh Kumar Ravi So this 500 will be total for FY13 and FY14? That's right. Rajesh Kumar Ravi And what is the current cash balance and growth rate? Current cash is 15 crores. Rajesh Kumar Ravi 15?

8 Yeah. Rajesh Kumar Ravi And debt? Rajesh Kumar Ravi Okay, and sir on the, how is the ramp up happening in the Rajasthan plant, Trinetra? Rajasthan plant in terms of production, clinker production we have hit 100%. And cement and cement dispatch also is 1 lakh tonnes plus. The market, the NPR has improved during the current quarter by about Rs. 400 per tonne. Rajesh Kumar Ravi Because last quarter was a quarter when due to heavy rains in Gujarat, the roads were breached and their consumption had dropped considerably. So we hope that we would be able to sustain operations at 100% and we also hope that prices will improve further from now on. Rajesh Kumar Ravi And sir, coming down to the second thing, you said you were expecting to increase your holding into the company. So what is the status on the same? We didn't get the question? Rajesh Kumar Ravi You had earlier said that you wanted to raise your holding in Trinetra, Indo Zinc? Yeah, yeah. I said what we have now done is one portion we have -- I said we have converted one portion into preference capital, the equity is yet to happen, it is getting done, it has not yet happened. Rajesh Kumar Ravi Rajesh Kumar Ravi Thanks for taking my questions. I will come in queue a second time. Thanks. Thank you very much. Our next question is from the line of Rahul Kumar from Jefferies. Please go ahead.

9 Anand Agarwal Yeah, good evening everyone. This is Anand Agarwal from Jefferies. I had a couple of questions. I mean first, I think you had given the volume guidance of flat for FY12 now which means that for the fourth quarter you will literally have to do like a 20% or 19%-20% Y-o-Y growth. So would you want to revise that guidance or you still stick with the flat 9.9 million tonne guidance for FY12? I think so far about 7 million tonnes so we can look at maybe close to 9.5 million, 9.6 million tonnes. Anand Agarwal Excluding Trinetra which will be about 1 million plus. Anand Agarwal Yeah, understand. And second just wanted to get a sense on your foreign currency exposure I mean the one that you have booked the -- I mean the currency movement loss. What is the amount of that? It's about -- what we have charged in P&L is about 14 crores. Anand Agarwal No, but what is the principal amount? Anand Agarwal Correct. And there whatever we've charged to P&L could get reversed assuming that this current rate continues till March. So we believe based on the views that we've got from the experts that since this $60 million loan is repayable from three to nine years we can wait for better levels to cover. So as of now we are unhedged as far as this is concerned. What is getting charged to the P&L is the facility that we avail for by procuring our imported coal which gets charged to the P&L. Yeah that's buyer's credits that we avail for importing coal which gets charged to the P&L? Anand Agarwal Understand. That's it. Thank you. Yeah.

10 Thank you very much. Our next question is from the line of from Emkay Global. Please go ahead. Yeah. Thanks a lot for taking my question. Sir if you can highlight state wise, where have you seen demand traction and what are the underlying factors that have resulted in such an impressive volume growth, if you can give us state wise highlights? At present, we are talking about South? Exactly, all the four states. That's what I am asking, sir. You mentioned November-December put together, AP was 12, Tamil Nadu was 18 and Kerala was 15? Right. So what has picked up on the project side, that's the highlight that I want? Nothing major happening in terms of government spend effect except metro is happening in Tamil Nadu and also in Karnataka. And it's driven basically by the private sector housing, apartments in metros and private residences in the districts and the rural markets. Because in none of the four states there is any major spend on infrastructure or on government housing, reconstruction housing et cetera. But going forward Tamil Nadu government has announced some 1,000 concrete houses for the downtrodden and again nothing major in terms of infra except the metro. Particularly on Andhra if you can highlight, it's a 12% growth? See because the base of last -- when we last September-October-November the base was pretty low.

11 So that's why I said it's encouraging that the base has been breached and in spite of no major government expenditure happening, it's nice to see the growth. Sir on your CPPs I think the 50 megawatt at Sankarnagar, you're saying you will start in about a quarter or so. So what is the rate of power there as of now and what it would be once the CPP commissions? Actually we have lighted up already. What I tried to say -- what I was trying to say was that it will get stabilized in the next couple of months and we should be able to operate it near full capacity. We expect saving to be about -- around Rs. 1 per unit. And this is assuming that the present rate continues. Present continues. Since there is a proposal to increase it to Rs.5. Yeah. If that is increased that is additional gain, whether it is 5 or 4.5 that will be in addition to the Rs. 1 saving that we expect. So this is at what coal cost, Rs.1 saving? This would be at around $70 landed. $70? At $70.

12 At $70 landed. So you're presuming that this would be used, the coal would be from Indonesian mine, right? That's right, yes. Actually this coal is high moisture, low calorie coal which is why the rate is 70. Currently it is around this level. But that's the market rate or the one which you'll get from? That's the market. Around $68. Is the market rate but normally for cement, we use high calorie coal, where the cost is around $110 to $120. So this is a low grade coal which will come landed at plant at about $70? No. Hello? Yeah, yeah. This is FOB sir? No, no, this is -- landed at the plant.

13 And the same would be the savings at Vishnupuram also? Vishnupuram... Vishnupuram, so from the -- I mean external transport cost from the port will be more. So it will be another $10 will be more. But saving will be more or less around Rs. 1 per unit. And one last question sir. What is typically the limit of buyers outstanding that you have, this buyer's credits limit that you have outstanding? Sorry? This buyer's credit limit, you know which has resulted in this loss of about 12 odd crores, 12, 13. See, that is again notional as we tried to tell you that was notional. Actually if we take the same number today, it would have reversed the whole amount. And if you want the amount we have, the outstanding as of December is about $32 million. Yes. That's it from my side, sir. Thank you very much. [ Instructions]. Our next question is from the line of Jaspreet Arora from Anand Rathi Financials. Please go ahead. Jaspreet Singh Arora Hi, sir. Good evening and thanks for taking my questions. Sir, interest cost on absolute basis has gone down from 65 crores in September quarter to 59.3 crores now. Has there been any change in debt position or some other reason behind this? Hello? This also includes other than interest cost, this also includes certain other financial charges. That must be a difference in the other financial charges, the LCs and other opening charges, so it will be because of that. Otherwise the loan -there is no reduction in the loan.

14 Jaspreet Singh Arora Alright. And next question sir on what's the current status with regards to the coal pricing mechanism from Singareni and other collieries. And what is the outlook according to your analytics? See Singareni was impacted because of the strike in the month of October. Jaspreet Singh Arora Right. Now it's business as usual. I mean there is nothing to -- so we are getting full output. Jaspreet Singh Arora And outside Singareni, do we source from anywhere? I beg your pardon? I think you are speaking little close to the mic, so it's little bit of sync here. Jaspreet Singh Arora Beside Singareni sir, the other collieries that we buy it from? We buy only from Singareni. Jaspreet Singh Arora And Rajasthan we don't have the linkage? We don't have any linkage, except in Singareni. No, no Rajasthan he is talking. We have no linkage in the Rajasthan plant. Alright, and sir just last question on the cement prices. Where do the realization stand as of today versus the last quarter? And what's your outlook going forward? I think more or less at the same level as the last quarter. And outlook going forward is surely we will be able to pass on any cost increase. And if the demand is at the current level, I mean the growth is at the current level it will certainly give us an opportunity to increasing the

15 prices also. Jaspreet Singh Arora Alright, in Mahi sir, what would be your rough EBITDA per tonne that we would have made in the last quarter? Where? Jaspreet Singh Arora Rajasthan plant sir? It's as I said because of the NPR being only around 2 8 or so, the EBITDA was Rs. 300 to Rs. 350 per tonne but it's not really representative because that was also the month when the power cost increased because of heavy rains and handling difficulties et cetera. Jaspreet Singh Arora I think ideally it should be, we are shooting for at least Rs. 700 to Rs. 800 per tonne which and the power plant, once we commission, which in fact has been commissioned already. Rajasthan, the power cost is almost Rs.6 per unit. Jaspreet Singh Arora So there on saving in power alone we expect at least Rs. 2 per unit. So at least a couple of hundred rupees per tonne we should be able to save on account of power which will help us to neutralize any increase in cost of other inputs. Jaspreet Singh Arora And this coal we would be buying from the open market? We will be importing the coal. Jaspreet Singh Arora Alright. And the production -- sorry the realization that you are referring in Mahi for the last quarter, would it be close to 2,700 at the naked level. Yes, you are right. Around 2,700.

16 Jaspreet Singh Arora Alright. Thank you so much, sir. I will get back if there is any more questions. Thanks so much. Thank you very much. Our next question is from the line of Nitesh Jain from ENAM Securities. Please go ahead. Nitesh Jain Hi sir. Can you tell us is there any price increase, the coal price increase from Singareni coal field because Coal India has recently revised the system, and Singareni has also followed the same. So how much is the increase at Singareni coal field? Nothing sir. Actually Singareni has published a price list also. Nitesh Jain Yeah. Indicating what is the price structure under UHV as well as under ECB. Yeah, yes. There was no increase at all, only Rs. 9 per tonne was the increase in one grade that's all, nothing else. Actually the confusion that prevailed in the other, Coal India was not there in Singareni. Nitesh Jain So you mean to say when they changed to the mechanism, there was no price increase at all? No. Nitesh Jain So there was no question of rolling it back also? That's correct, yeah. Nitesh Jain Thanks sir. That's it.

17 Thank you very much. Our next question is from the line of Prateek Kumar from Religare Capital. Please go ahead. Mihir Jhaveri Yeah. Hi, sir this is Mihir, sir. Just wanted to know more, why the tax rate is so low in the quarter? See it's like, as far as the taxation is concerned you have to take a look at it for the nine month period. Because in September, if you notice, we have made some corrections, the consequence of which the September tax rate was marginally higher. If you look at the nine month period we'll be inline for the financial year considering the adjustment. Mihir Jhaveri Yes. As against that we will be claiming 178 crores, which is a share -- adjustment against share premiums. The redemption premium for FCCB will be claimed as an expenditure. So for the processes of P&L account it has been drawn from the share premium. So we will be left with a MAT situation and considering the MAT provision of 18.5% on the current period tax, it will come to about 55 crores as against which we have 57 crores for the nine month period. Mihir Jhaveri Okay, sir. Okay, got it, sir. Congratulations for good set of numbers. Thank you. Thank you very much. Our next question is from the line of Vivek Maheshwari from CLSA. Please go ahead. Vivek Maheshwari Hello. Thanks for taking my question. Sorry, I missed the numbers of income from different segments which is windmill, freight and EBITDA. Can you repeat it for me again? The income from windmill was 87 lakhs... Vivek Maheshwari For this quarter. The EBITDA from IPL was around 3.64 crores and EBITDA from shipping was 1.61 crores. Vivek Maheshwari And could you also repeat the revenue numbers please?

18 Revenue of shipping was around 10 crores. Windmill was I am sorry -- IPL was 3.6 crores. And windmill would be the same? Wind-mill is 87 lakhs, that's all. Vivek Maheshwari That's all. And second thing, second quarter how much were the NCRs the corresponding number basically for 3,460 for this quarter? Which one? Vivek Maheshwari NCR in the second quarter? It was 3,428. Vivek Maheshwari 3,428. And lastly sir, how do see fiscal '13, now that fiscal '12 has been pretty strong. We started with pessimism and things actually picked up and all that? Here it's... Vivek Maheshwari I mean also in terms of the new capacity that you see, I think there are a few plants which are commissioning there in South et cetera? No, actually, most of the capacities barring JP have been commissioned, including Jindal has also already commissioned. So in terms of supply, I think most of the expansions are already in play. But I mean in terms of demand, everything depends on your guess is as good as mine, in the sense how the economy is going to move forward is something we need to wait and see. Maybe after the budgets we will get the clearer view. All right. Thank you and all the best. Thank you very much. Our next question is from the line of from Edelweiss Securities. Please go ahead. Yeah, sir just a follow-up question specific to your power and fuel costs. When we do a simple arithmetic, trying to calculate the cost per tonne of cement, cement produced, the cost obviously has gone and reasons as you mentioned are because of like say higher percentage of imported coal, the rupee depreciation factor, disruption in Singareni's coal. Today as in, how do you see -- I mean can we assume this

19 cost to have peaked out and will like see a gradual decline in Q4? Or it could be on the higher side, I mean specific for the March particular quarter, sir? Definitely the cost is likely to ease out because the usage of imported coal has come down from 67% during the month of January because of the availability of indigenous coal. So that pressure will definitely will ease out. On the power front, the cost has already gone up because of the revision in tariff of AP SEB and all. Last year, from 1 of April, whatever has happened. No, I am talking sequentially, sir. Like from the December quarter gone, I mean the December month gone by. Yeah. And coming into March or even as we speak. So will the cost be on the low... In the third and fourth quarter, there could not be -- there will not be much change in power. Sure. Between the second and third quarter. It is likely to be around the same level. Whereas coal cost can go down? Coal cost may marginally go down, definitely.

20 Sure, fine. That's it from my side sir. Thank you very much. Thank you very much. Our next question is from the line of Paresh Jain from Max New York Life. Please go ahead. Paresh Jain My question has been answered, thank you. Sure. Thank you so much. Our next question we will take is from Neha Manpuria from JPMorgan. Please go ahead. Neha Manpuria Yeah. My questions have been answered. Thank you so much. Thank you. Our next question is from the line of Jinesh Gandhi from Motilal Oswal Securities. Please go ahead. Hi good evening. My question is on your Rajasthan plant. Can you indicate what would be your current stake and what would be the level after second round of conversion of preference share? It's still at 61%. Once we complete the process of converting our loan, it will be closer to around 90% yes. So currently this is 61%, including preference shares, is it? No, no, no. Equity, I am talking about equity. Is 61%. And once we complete the process of converting our loan into equity preference, it will become close to about 90%. 85% to 90% it will come to. And any timeline for this?

21 Yeah. We are working on it to get it done this year, I mean it should happen. Honestly even as of now, it will be -- we are like that. Because the capital base as of this moment is just about 4.8 crores. We are not able to get the remainder of the shareholders, though we had issued tender offer and tried to get the remainder of the shares. So nevertheless, we will complete this process quickly and we have started the process. We took one route, but since it was taking time we are trying to adopt another route to complete it fast. PAT was crores loss crore loss? for the quarter, nine months is crores loss. EBITDA was 15 crore. Interest was about 31 crores and depreciation 21 crore. Sorry, come again? Can you repeat those? 31 crores was the interest and depreciation was 21 crores. Okay, this was for third quarter? No, nine months. Okay, interest was 31 and depreciation was...?

22 Okay and what would be EBITDA for nine months? Oh, nine months 15 crores. Third quarter is Yes. Right. Secondly with respect to your coal prices or effectively your blended average coal cost in this quarter? Our coal cost during this -- average coal cost for this quarter was Rs.6,600. Rs.6,600. And in second quarter this would have been...? 6, Okay so this is what we believe has peaked out. And how would be your realization now as we stand in February versus third quarter average, your NPR? It's more or less same as third quarter. Okay, they are stable. Right. And lastly with respect to demand and supply in South India, while demand we understand is pretty difficult to determine. On the supply side, what would be total capacity now, at the end of March and expected next year? No, as I said, November and December, the growth has been very impressive. I said that Andhra, which was really negative growth has

23 grown by 12% and Tamil Nadu by about 18%, Kerala has grown by 15% and Karnataka by 8%. Right. And so, going forward we believe that this kind of demand will be sustained, because normally February-September is the busiest season for consumption. True, true. On the supply side, barring JP, all other units expansion, greenfield, brownfield, everything is in place already. Right. So when JP is commissioned I take it that given on the back of this kind of growth, their quantity will also get... Absorbed. Absorbed without majorly impacting the price. Right, right. So what would be your sense of capacity at the end of March '12 in South India? See South India, the capacity is about 100 million tonnes. This is including JP? Yeah, give or take, I am just going by a ballpark figure, maybe 100, 105. Okay, okay. So next year we don't expect any meaningful capacity addition?

24 No actually this 100 million tonnes is without taking into account some players who are not in CME but who are large enough to reckon for the purpose of capacity. Sure. Okay, okay. And next year we expect any meaningful additions? No, other than JP, there is no other expansion happening at the moment. Okay, okay. Thanks sir I'll come back in queue. Thank you very much. [ Instructions]. Our next question is from the line of Reena Verma from Merrill Lynch. Please go ahead. Reena Verma Bhasin Yes, hi. Thank you very much for the call. Just two questions. One is that you have done so well in terms of EBITDA per tonne in a seasonally weak quarter, where do you see your profitability let's say over the next two quarters in terms of EBITDA? And are there really any major downside risks from here to worry about? Equally if you can comment on why cement prices shouldn't be much higher over the next two quarters? That's my first question. And then the second one is just a small housekeeping question on Trinetra, when can we expect quarterly consolidated results from you? On the first question as I said, we should be able to pass on whatever cost increase in the cost of administered inputs. And in terms of higher EBITDA et cetera, we definitely expect some saving in cost, on account of commissioning the power plant, which should really flow into -- should contribute to a little higher EBITDA as such. Increasing the price today, the price in Kerala is about Rs. 330 and in Tamil Nadu is 300 plus. And Karnataka is also about 300, 305 and AP is around Rs.270, Rs.280. And which price has been quite well, it's gone down well with the consuming public and they all accept that the reality, that this will be the real price of cement. So some increase based on, if the demand is really buoyant it should give us an opportunity to further increase maybe another Rs. 10, Rs. 15. But it's too early to comment on that because the prices, as it is, pretty healthy. Reena Verma Bhasin Thank you for sharing that. So I mean what really is in your view the key constraint to further hikes in prices? Are you saying it's you are unsure of the demand recovery or is it just government, worries about government intervention? See today price in Kerala, there are not many states in India which have breached a price of Rs And we also need to be little bit careful about too much of publicity on high cement prices when particularly the economy is not doing so well, we can't be, as they talk about high inflation et cetera, we can't be seemed to be contributing adversely to it. Reena Verma Bhasin Sure. Thank you very much. And just on Trinetra, please? On the next question. We normally publish the consolidated results only once in a year. As you are aware, I think we do it. In the last quarter, we published consolidated results on a quarterly basis.

25 Right. I mean is there a challenge to doing that? No, Excepting that we have an option. And we exercised the option to do it once and when SEBI gave us the option last year, so we've been following it ever since. Reena Verma Bhasin Right. Thank you very much. You are welcome. Thank you. Thank you. Our next question is from the line of Ritu Modi from Ambit Capital. Please go ahead. Ritu Modi Hello sir, thanks for taking my question. Most of my questions have been answered. Just one question is that what do you expect the expenses to be for IPL for Q4? Sorry can you repeat the question please. I am not able to get you clearly. Ritu Modi Oh yeah, so you said that this quarter, the IPL there were expenses and the revenue and the EBITDA was equal. So for the next quarter, do you see any expenses coming in and if you could just give any rough assumption or rough figure? Q4? Ritu Modi Q4 yeah. Ritu Modi 4th of April okay. And sir... From the next financial year. Ritu Modi Okay sir. And if you could also help me out with the revenue and EBITDA figures for the last quarter, that's 2Q for IPL shipping.

26 Second quarter, IPL? Ritu Modi Yes. 51 crores of income and 33 crores of EBITDA. Ritu Modi And for shipping and windmill, sir? What? Ritu Modi For shipping and windmill? Shipping was 6.7 crores of income and minus 2 crores of EBITDA. That are for Q2. Both the numbers are for Q2. Ritu Modi Right sir. And 6 crores from windmill. Ritu Modi And the EBITDA for that would be same? Same.

27 Ritu Modi Okay, thank you so much sir. Thank you. Thank you very much. Our next question is from the line of Rajesh Kumar Ravi from Karvy Stock Broking. Please go ahead. Rajesh Kumar Ravi Thank you, sir. Most of my questions have been answered. Thank you very much. Thank you very much. Our next question is from the line of V. Srinivasan from Angel Broking. Please go ahead. V. Srinivasan Thanks for taking my question like, could you please tell us like what is the current power tariff rate in Chennai and what is the proposed hike like Tamil Nadu? Current tariff is around Rs.4 on variable plus Rs.300 per kva in extra charges. V. Srinivasan Yeah. The proposal is to increase it by Rs.1. V. Srinivasan Increase it by Rs.1? Yes. V. Srinivasan Okay, sir. Thanks a lot. Yeah. Thank you very much. Our next question is from the line of Kamlesh Jain from Prabhudas Lilladher. Please go ahead. Kamlesh Jain Yeah. Hi to all of you. Thank you very much for the call. Sir, one question on part of this long-term monetary liability where you have told that there was around 12.8 crore of interest cost which has been now paid for in that foreign exchange monetary provision. So we have mentioned that net profit is high by around 12.8 crore on account of that. So how we have done in our P&L sir, is it being netted out

28 from other expenses or how has been the treatment provided to that? No. I think you got it wrong. See as per the circular given by the Ministry of Corporate Affairs, where any foreign currency borrowing has been spent on other than depreciable assets, then any fluctuation arising there from is taken to something like a deferred revenue expenditure, it's called foreign currency monetary translation account. It's absorbed So in our case the total figure that was taken was about 13 odd crores. If you see the note we have written end of that about crores is being carried forward as in the monetary translation currency account and 1.88 has been charged to the P&L account and included under finance costs. Kamlesh Jain Yeah. So in the prior quarter had that been provided in P&L or this is the first time we are doing this treatment? No, in the first quarter it was included in the P&L. Kamlesh Jain So what I mean to say that... Because the circular came only on 29th of December. So in quarter two it was appeared as finance charges in the P&L. Kamlesh Jain So in Q3 there was no charges on that count? It was... It was to the extent of 2 crores. Kamlesh Jain Around 2 crores was there? 1.88 crores to be precise. Kamlesh Jain And sir apart from that on tax side, you mentioned that roughly 175 crore or 177 crore was the premium on that FCCB which has been -- on which we could, we got the credit for our tax provisioning. So for next year, would like -would we be in the MAT or on the regular tax basis? Kamlesh Jain True, true.

29 As regards next year, it depends on the profits. Kamlesh Jain But if say...? And if I mean your question is, whether we have any breaks? The answer is, no, we don't have any breaks. Kamlesh Jain But for our presumption or for our calculation should we take 33% or 30% as the normal tax or...? You should take the marginal rate of tax which is 33.5%. Kamlesh Jain Okay, okay. Thank you very much, sir. You are welcome. Thank you very much. And that was the last question. I would now like to hand the floor over to the management team of India Cements for closing comments. Thank you ladies and gentlemen for the interest shown in our company. And I hope we have clarified most of your points. And looking forward to your participation on our future calls. Thank you. Thank you very much. On behalf of IDFC Securities Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your lines. Thank you.