UltraTech Cement Ltd Analyst Conference Call Transcript

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

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Just 2 questions from my side. So firstly, what made you press the start button now? Is it you're feeling so confident about the demand that we had to go ahead with these expansions right now? Or is there a capacity share target in your mind that in 5 years or in 10 years, we want to get to this much capacity share. We've clearly had a great journey going from 10% to 22% odd capacity share. So how should we think about the top-down approach on capacity expansion from your side?

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Has there been any change on the urban housing side in the last couple of months?

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Okay. The second question I had was on the CapEx in East. Now I understand this shortage that is there in that market from your perspective. But it's also been a market where pricing has been very, very volatile (inaudible)? The ROEs that a lot of people make in East are still not -- are not attractive enough. So I'm just thinking the thought process in East. I mean given the pricing pressure, do we -- is that the expansion there also fit the IRR or ROE criteria that you have in mind? I mean I'm just -- just trying to understand your thought process on East because it's been 1 market, which is continuing to see a lot of pricing pressure.

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Okay. Got it. Just 1 clarification, I'll move back in the queue. This INR 6,500 crores, if I just take on 19.5 million tonne grinding capacity that you're talking about, it's about $50 a tonne. So and you mentioned $60. So I'm just trying to think what is the $60 number that there in the... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Gunjan Prithyani - JPMorgan Chase & Co, Research Division - Analyst : Okay. Got it.

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Couple of questions. First is, would we have any targets in mind, specifically for Birla White, RMC and UBS? I think it's for the first time we have detailed out the specifics. Specifically, on Birla White, are we looking to double capacity? How should I look at the market share over here? That's on Birla White. And likewise for RMC and UBS? That's the first question.

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : That's encouraging. Sir, would you like to put some numbers over here given UBS is a big growth option that we have, and we haven't -- I think street hasn't appreciated that. You did indicate like probably you're hinting towards captive manufacturing on construction chemicals, which is quite positive. Sir, would it be possible for you to quantify some numbers over here because it is a big optionality, which as a company UltraTech has, how should one look at it?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Great. Sir, just 2 more questions. We have -- you did indicate WHRS to address 40% of the power requirement on incremental expansions, and you did emphasize on blended cement. Sir, would you like to qualify any emission targets? I know that we have it, but -- but would you like to revise those milestones that we already published specifically given our incremental (inaudible)?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Great. And sir, just last question. You have indicated like 22.3% is a market share. Sir, any sense on how much will be our market share on FY '23 basis, looking at the industry capacity additions?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Yes, sorry.

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Correct. Sir, any targeted number over here?

Question: Ashish G. Jain - Macquarie Research - Analyst : I had 2 questions. One is -- sir, in terms of the clinker capacity, so if I take out the new expansion that we are seeing, you are anyways well balanced on clinker capacity at least at a company level. Now going ahead, at one end, we are looking at increasing our blended cement ratio. And if I look at the incremental clinker and incremental cement, it is pretty much implying a very high clinker factor. Like against 11.4 million tonnes clinker, you have effectively announced 12 million tonnes, 12.5 million tonnes of cement. So what is the thought process?

Question: Ashish G. Jain - Macquarie Research - Analyst : Sir, out of this 19.5 million tonnes, large part of it was anyway, work in progress, for which we were like we already...

Question: Ashish G. Jain - Macquarie Research - Analyst : So what is the thought process behind this? So that was my first question. And secondly, while I understand clinker brownfield is a great thing, very cost effective and all. But on the grinding side also, do you think that we have exhausted opportunity to expand more in terms of geographical footprint because most of our grinding is also brownfield. So we are not kind of diversifying in terms of our locations, which could have been more logistic friendly and all. So I don't know, I mean -- have you kind of exhausted that opportunity or...

Question: Ashish G. Jain - Macquarie Research - Analyst : Okay. And sir, the first question on clinker versus cement, if I look at it on an incremental basis, are we -- will we be short on clinker in East, that's a point I wanted to understand. Because if I see here, we are adding around 3.7 clinker in East, if I put Maihar and Hirmi together and grinding is way more than that, is in multiple times of that, even though as a starting point, we have been highlighting that East, we are bringing clinker from peripheral markets and all. So are we like comfortable in terms of clinker cement ratio particularly for East?

Question: Ashish G. Jain - Macquarie Research - Analyst : Right. And sir, just my last question on WHRS is...

Question: Ashish G. Jain - Macquarie Research - Analyst : And sir, just lastly, on WHRS, are we kind of -- is 40% the best ratio possible for the incremental capacity that you highlighted? Or there is headroom to add more eventually?

Question: Ashish G. Jain - Macquarie Research - Analyst : It is the maximum, okay.

Question: Ashish G. Jain - Macquarie Research - Analyst : Okay. So this 57 that you said is over and above the 245 that's always there in pipeline for us?

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : Yes. In the presentation, the clinker that we are talking of is including the Dalla Super, right, the Slide 21?

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : So the new capacity clinker would be 9.1?

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : No, sir, if you add the total 4; Pali, Maihar, Dhar and Hirmi, the clinker addition is 9.1 million tonnes, so 2.3 million tonnes is Dalla Super.

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : Yes, so, okay, okay. Just wanted 1 thing. Second -- the second thing is, sir, on the slide -- earlier slide, we are seeing that power utilization is coming down to 80 as of FY '20. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : Understood. I understood. Sir, in terms of -- if now we calculate this 9.1 million tonnes of clinker -- yes, 9.1 million -- so the total mix of 11.4 million tonnes to 20 million tonnes of cement. Sir, we will be able to balance this clinker-cement ratio or we may have -- we are still excess in -- I mean, this is going to be balanced within the interim. That's what I wanted to understand.

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : Okay. Okay. And sir, Dalla Super.

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : Yes sir.

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : Okay. And just recent for Dalla Super, we said third quarter of FY '22, is that a safe assumption? December '21 is what you said, earlier mentioned.

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : Yes. FY '21?

Question: Milind Raginwar - Centrum Broking Limited, Research Division - Analyst : And Dalla Super, sir, I'm more interested in the clinker part, 2.3 clinker at Dalla Super.