UltraTech Cement Ltd Q3 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 : Yes. 2 questions from my side. Firstly, on the cost side, there is clearly a huge difference still between the accrual rate and the spot prices for pet coke and international. Also, could you just give us some sense like how should we -- what kind of inflation you further expect, assuming spot sales where it is right now? And along with that, on this WHRS program, which is fairly aggressive for the next 2, 3 years, what kind of cost savings can this yield when it is fully executed?

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Sure. No, that's really helpful. But if I can just have to just put the numbers, if like we are at $74 approval versus $110 at pet coke. Is it fair to say that there is almost INR 120 to INR 150 of incremental cost, assuming spot stays where it is, which is incremental increase that can come from?

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Sure. Before just taking the second question, could you -- would you be able to put any number to the savings from WHRS? Because I mean -- or maybe if I think through it, incremental 20% shifting to the WHRS potential savings can be INR 70 to INR 80.

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Okay. That makes it amply clear. Now just second question is on the industry growth. Now we've done 14%. And if you can share what is your assessment that where industry would have been in December quarter? And to me, it seems there are clearly some market share gains. So what -- are there any specific regions where we have done better than the market or any thoughts you can share around this?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Congratulations on a good set of numbers. Sir, I have 2 questions, one on the ESG side and one on the call that we had earlier during the day. Atul sir, I specifically wanted to check with you...

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Grasim call, sorry group call. The question is specifically for you. How should one look at the incremental CapEx deployment on the distribution network, specifically for White Cement and Putty? I'm specifically asking this given Grasim's growth of INR 5,000 crores over the next 3 years, and they are looking to leverage on our -- on UltraTech's network. So how should one look at this angle or should one expect that UltraTech will get some loyalty from Grasim going forward as they make good of the brand, BIRLA White as well as the network?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : So there won't be any cash flow drag on back of this As Grasim goes aggressive on paints, specifically for UltraTech?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : I hope I understand that right?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : That's useful. Sir, my second question is on ESG side. We have recently placed a voluntary target production of 25% on a new baseline. But if I look at what our target was for FY '21. On a FY 10-year baseline, we have actually relied to what we had stated. So how would you reflect upon that? And given that we have new targets, what we have already laid out, is there a particular road map on cement to clinker ratio or carbon capture or using hydrogen as a alternate fuel? How should one look at that given we are specifically now actually moving up the ladder when it comes to commitments over here? So that's the first thing. And the second thing is, would it be possible for you to classify what percentage of our capacities or plants are in safe semicritical, critical and over-exploited regions, looking at it from a water perspective?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Yes, sir, I wanted specific numbers. Probably I'll come back. I'll take it from market and...

Question: Ashish G. Jain - Macquarie Research - Analyst : Sir, my first question is on the debt risk that you indicated that we have also raised debt at 4.6% last year.

Question: Ashish G. Jain - Macquarie Research - Analyst : Okay, 4.54%.

Question: Ashish G. Jain - Macquarie Research - Analyst : Sir, what is the hedge cost of that debt? And does it still make it attractive versus whatever you're earning on your treasury at this point of time? And another question for the -- in the same context is also that now we're sitting on like a huge INR 33,000 crores of treasury. Our cash flows are fairly strong. We are well covered for our CapEx as well. So is there no thought of actually reducing the gross debt going ahead? Because if you are REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 23, 2021 / 10:30AM, ULTC.NS - Q3 2021 UltraTech Cement Ltd Earnings Call doing more fund base with a longer tenure issuances, which -- does it -- should it be read as a thought that you will not reduce gross debt going ahead?

Question: Ashish G. Jain - Macquarie Research - Analyst : Sorry, I thought that is the dollar bonds.

Question: Ashish G. Jain - Macquarie Research - Analyst : Fine. And sir, secondly, is any part of the treasury invested as intercompany loan or something...

Question: Ashish G. Jain - Macquarie Research - Analyst : Right. And just lastly, on -- in terms of pricing and all, can you give some color how Q3 pricing was at a regional level? Because like sequentially your pricing is flattish, which was much better than my expectation for sure. So can you give some color on where we are on each region in terms