UltraTech Cement Ltd Q1 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Really commendable delivery, sir. On the -- I had a question specifically on the cost side, and I don't note that in the presentation, you've marked out 10% reduction on the overhead side. Now when I look at the expenses, on the other expenses, it's been a very material reduction. Is it -- and is it -- there's definitely a combination of some deferment of OpEx, like ad spend, which would have been high in this quarter, and some of the cost programs that you're working on. Is it possible for you to give us some sense in terms of absolute savings that we are targeting and what we've achieved on that overhead cost control program?

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Which would be almost about, going by the number, INR 1,200 crores of quarter kind of a fixed expense. It can be close to about INR 120-odd crores a quarter. It includes staff cost? Just a clarification on that.

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Okay. Got it. That's great. And on the fixed -- on the cost side, the other question was on the variable now. And when I look at the comments on the power and fuel, I sense that, directionally, you're not expecting very meaningful savings on that cost item. And on the freight side as well, given where we are -- where the diesel price has been moving, are there any significant savings that you're expecting there or anything from the M&A or logistic optimization?

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Okay. Got it. But lastly, if I can just put one question on the transaction, which you mentioned, which has been concluded in last quarter. Are there any outstanding liabilities to meet? Or the -- it's the net cash flow that comes to UltraTech, that $120 million?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Sir, my first question is, if you could provide some detail on this INR 157 crore of exceptional. For what asset was this? And for what duration was that?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : That's useful, sir. Sir, my second question is on pricing and discounts. I think we've done a wonderful job on the cost side. But specifically, if one looks at the pricing, what should one make of this? Looking at pricing and discounts both in tandem? So other managements, which have come on the call, basically what we hear is there will be a reduction in price differentials between the invoice price and the selling price. They are also talking about stricter working capital when it comes to dealers, more of cash and carry. Sir, your commentary on that side will be quite useful.

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Sir, the question is regarding discounts. Basically the key differential which was a practice which was in the market, I think a few companies which have already reported they have indicated that this is something which is a good lever and we are playing on it, and it actually helps margins. And can we, as of terms, which the companies have with the dealers, it's now more on cash and carry, and there are no more margins which are there at the dealer level. So sir, if one looks at the results overall, we have done a wonderful job on the cost side. But honestly, I was expecting something... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 28, 2020 / 10:30AM, ULTC.NS - Q1 2021 UltraTech Cement Ltd Earnings Call

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Right. Sir, some clarity...

Question: Rajesh V. Lachhani - HSBC, Research Division - Analyst : So 2 questions from my side. One, earlier during the call, I heard that in July, the realizations are down by 4% to 5%. Can you please confirm that? That would be question number one.

Question: Rajesh V. Lachhani - HSBC, Research Division - Analyst : Okay. Yes. And secondly, Atul, we have also seen employee cost decline during this quarter. Even quarter-on-quarter, we have seen a 14% employee cost decline. So just wanted to understand how much of this is sustainable and how much would reverse in Q2 and going forward?

Question: Rajesh V. Lachhani - HSBC, Research Division - Analyst : Okay. So these are successive numbers, okay. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 28, 2020 / 10:30AM, ULTC.NS - Q1 2021 UltraTech Cement Ltd Earnings Call