Operator: Ladies and gentlemen, good day and welcome to the UltraTech Cement Limited Q1 FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand the conference over to our CFO, Mr. Atul Daga. Thank you, and over to you, sir.

Atul Daga: Thank you, Ray. Good afternoon, ladies and gentlemen, and a very warm welcome to this earnings call. One big theme for us quarter-after-quarter is demand. If the demand is good, everything falls in line, and I'm delighted to report that the first quarter of fiscal 2027 has reaffirmed that conviction emphatically. The quarter began with the shadows of West Asia conflict, ended with a de-escalation, and now we know where we are. Situation is still fluid, but with a double-digit volume growth and a demand pipeline across infrastructure, housing, and urban real estate is as rich as it can be. UltraTech has kicked off fiscal 2027 with a very strong capacity base ready to serve the country, and we intend to grow like a challenger and not an incumbent. India's macroeconomic engines continue to demonstrate remarkable resilience. Even as global energy market endured one of the most disruptive supply cycles, India's domestic consumption and investment flywheel kept turning. The Indian government is managing and planning its strategies, supporting the industry at large in the country. Benchmark lending rates have remained attractive, improving housing affordability and lowering the cost of capital for infrastructure developers like us. There are near-term data points we watch very candidly. Core sector growth slowing down in the month of May, lower coal and refinery output, and aggregate state CapEx in April-May, growing a modest 2% year-on-year. These are, I believe, timing effect and not any change in trends. To give you a perspective of what is being announced and executed across the country, because that is tomorrow's cement demand. First and foremost, if I were to call out, Maharashtra is planning a INR 20,000 crore greenfield shipbuilding cluster anchored around Mazagon Dock. Odisha has announced a deep seaport at a place called Ganjam, a shipbuilding cluster at Paradip with investment of over INR 50,000 crore. Tamil Nadu has signed INR 18,000 crore MOU for data centers and shipbuilding projects. Ports, shipyards, data centers are among the most cement-intensive asset classes in the economy. The Cabinet has approved INR 20,000 crore plus Ahmedabad–Dholera semi-high-speed rail corridor. Metro programs continue to expand across Ahmedabad, Bangalore, Mumbai, Pune, and Uttar Pradesh. There is additional INR 30,000 crore infusion into NIIF with private capital across roads, ports, and urban infrastructure. India's CapEx revival is also being propelled by power and data centers, both concrete-hungry sectors. Housing and urban real estate, roughly 55%-60% of India's cement consumption, has a very strong start to calendar 2026. Mumbai, the heart of construction activity in India, property registrations grew about 6%. Across India's top eight cities, the quarter one 2026 saw a very big growth in the number of units sold as per the data available from registry records. Prices have remained strong for the real estate market, which means it's a structurally mature end user-driven-market where the adoption is keeping pace with supply. Bangalore stood out on the strength of GCC and technology sector employment. Redevelopment space is equally significant for cement industry. Mumbai's Slum Rehabilitation Authority is set to redevelop about 850 acres of land. Developers are still land banking aggressively. Private sector real estate companies continue to acquire land parcels in various cities across the country. Commercial real estate is not getting left behind. India's Grade A office market opened up with a very strong first quarter, I understand. Net-net premium housing, redevelopment, office towers, hotels. This is urban India building upwards and outwards simultaneously, and every square foot of it is built on cement. That gives us the confidence for cement demand growth. Let me now turn to our own scorecard. Q1 was the highest ever first quarter performance for UltraTech across volumes, revenues, EBITDA, and profit. In volumes, you've seen our presentation. We grew about 13.1% in volume terms for the domestic markets. Capacity utilization was stronger at 81% as compared to 76%. EBITDA of INR 5,146 crores and PAT of INR 2,604 crores, which was up 17.2% over the last year, same period. Interestingly, very proud to tell you, we have converted the Kesoram and India Cements brands to 100% UltraTech. They were operating in B or C category space. We did not vacate that space. Post-brand conversion, the true performance of UltraTech is visible. In fact, if you look at the brand growth, the brand has grown 21% over the same period last year. Our team has been successful in converting the customers who were buying a B or C category brand of cement into an A category brand of cement, willing to pay a price premium. Our domestic grey cement volumes growth of 13.1%, I believe will be well ahead of industry's growth, translating directly into market share gains. Capacity utilization of 81% in a seasonally transitioning quarter on an enlarged 200 million ton base speaks to the depth of our demand pipeline. This is the most important feature of UltraTech, the power of our brand. Revenues grew 16%, EBITDA rose 12% ever highest, INR 5,000 crore plus EBITDA for April-June quarter. Profits rose about 17%. Operating EBITDA per ton has been steady above INR 1,200 this quarter as well. I want you to appreciate the stability that it represents. We have absorbed and are absorbing the sharpest imported fuel cost shock in recent memory during the quarter. On a volume base enlarged by acquired assets that are still ramping-up to system profitability, we held per ton earnings essentially flat while growing absolute EBITDA 12%. That is cost discipline and operating leverage working exactly as designed. We hope that fuel prices will normalize in the near future. The acquired assets improvement CapEx led cash flows through the P&L over fiscal 2027 and 2028, which will result in the per-ton-EBITDA trajectory only moving in one way in a sustainable direction upwards. The discussion will not be complete if we don't talk about prices. Cement prices have been constructive during the quarter in the report. Our All India exit prices improved through June, even as the monsoon now sets in. East and South led price improvements, Central and West were steady. North was more or less a consistent performer. Industry expects prices to hold broadly steady through the monsoon quarter due to the impact of increase in costs, which frankly is a constructive outcome for this time of year. With cost escalations of the past two quarters still to be fully passed through and demand momentum of the kind we are witnessing, we see a supportive price environment as the busy season approaches. Our premiumization engine and blended cement in the trade mix continues to do quite a compounding work on blended realizations regardless of headline price movements. This is why our retail focus matters so deeply to us. The retail market is built around the individual customer, IHP, the person who decides what their house will be built with. For that customer, a home is a once in a lifetime investment, representing a large part of their life's wealth. Hence, I believe cement is not just a commodity purchase. The customer does not shop for the cheapest bag. They reach for the brand they trust, the quality they can stake their family's future on. That is the premium and that is why it endures. As India urbanizes, last data I have is about 35% of India is urban, we will reach about 39% by 2030. This compares to countries like Indonesia, which are already 59% urbanized. There is a long way to go for construction, development, and urbanization. We should quickly touch upon the West Asia crisis. Q1 2027 opened with the most disruptive situation. The Strait of Hormuz effectively closed. Nobody knew what Strait of Hormuz was before the war. Crude crossed $100 and our coal cost hit the roof. Things are still uncertain, we are focused on achieving our targets. Through the crisis, our structural buffers did their job pretty well. Structural buffers, what I mean is our green power of about 1.897 MW met about 47% of our total power requirements at the end of this quarter. For the quarter, it was a lower number, we have exited the quarter with 47% of our power being met by renewable sources, which are cheaper also. We continue to ramp-up our AFR substitution and cement lead distance for this quarter has come down to 360 km. We absorb the shock better than any peer, we will harvest the relief faster than any peer. Permit me briefly to be slightly modest, because the data that I want to talk about clearly shows UltraTech's power. UltraTech's volume and profitability trajectory over the past few quarters has consistently outpaced the industry. June 2022 quarter, UltraTech grew 17.7% in volume terms, EBITDA of INR 1,230, whereas rest of the cement industry grew about 15.5% and INR 800 EBITDA per ton. The numbers continued like this. June 2023, 20% volume growth and 15.4% volume growth for rest of the industry. Our EBITDA was higher by 25%. June 2024, 6.5% volume growth and rest of the industry de-grew. Our EBITDA was 26% higher. June 2025 and September 2025, we had a bit of a shock in our volumes where we de-grew. We came back with a bang. December 2025 quarter, we grew 15%, industry growing less than half our growth. March 2026, we grew 9%, industry growing again less than half our growth. June 2026, we have grown 13%. Wait for the results to come out for rest of the industry. We'll know where the market share gains are. CapEx is something which is at the heart of our growth story. Fiscal 2026, we completed the year with about INR 9,500 crore deployed on the CapEx program. This journey will continue in April 2026 or in this quarter, around 12 million tonnes of new capacity has got commission in the country, out of which 8.7 million tonnes is by UltraTech. Shahjahanpur 2.7 million tonnes, Visakhapatnam, Patratu, which is Jharkhand. Jharkhand, tweaking our domestic capacity to 200.1 million tonnes and total capacity to 205.5 million tonnes. Projects under execution for capacity growth are backed by a CapEx of about INR 17,000 crore in the next two to two and a half years, will take our consolidated capacity beyond 242 million tonnes, with grey cement capacity to reach 212.7 million tonnes by the end of fiscal 2027, and further balance will be completed in the next year. Every tonne of committed expansion at UltraTech is fully backed by secured limestone. There is no raw material constraint anywhere on this growth trajectory. Alongside capacity, we continue to invest in structural cost advantages. Green power, which now stands at 1.897 MW, close to 2 GW of green power. Out of this, 71 MW was of renewables and 19 MW of WHRS was commissioned in this quarter. We believe we will reach anywhere between 2.5 GW to 3 GW very shortly. All these growth, CapExes, the cost improvement initiatives are all being funded with internal accruals. We had started the year with a net debt-to-EBITDA of 0.94x, and the quarter we have ended with 0.87x net debt-to-EBITDA. Our belief is, we are confident that this year also we'll end the net debt-to-EBITDA below 1x. The call will not be complete if I don't speak about India Cements. What a turnaround story it has been for us. There has been small murmur around the revenue numbers. Let me clarify. Whilst the printed number speaks about INR 1,013 crore of revenues as compared to INR 1,021 crore of revenue same period last year. There's an accounting adjustment, because if you look at net of freight cost, since we have started reporting ex-factory sales from Q1 2027, knocking off the freight cost, the revenues were INR 993 crore as compared to INR 821 crore on a like-for-like basis, which is a 21% growth in revenues, backed by a 19% growth in their volumes. This is the clearest illustration of a principle this management, UltraTech's management holds sacred. We deliver what we commit. When we acquired ICL, we told you it was a turnaround waiting to be unlocked. Sound assets in strong markets, held back only by years of under-investment and subscale operating discipline. One year in, that turnaround is no longer a promise on the slide. It is a trajectory you can read in the numbers. The improvement has been sequential and unbroken. India Cements EBITDA per ton has climbed from roughly INR 386 per ton in Q2 2026 to INR 400 to INR 509 and INR 603 this quarter. Gain, which is quarter-after-quarter, exactly as we said it would be. Every lever behind that number is one we own. Brand migration to UltraTech is 100% complete. Premium and trade volumes are rising. Cost improvement CapEx of about INR 2,000 crore is being deployed into waste heat recovery, preheater upgradation, cooler upgradation, et cetera, and a step change in their green power trajectory from around 3% of their power requirements to about 86% of their power requirements by the end of fiscal 2028. You should also notice the rapid improvement in conversion ratio for India Cements. Today, we are already at 1.5x conversion ratio for India Cements production also. Q2 fiscal 2027 may look optically softer as the seasonal monsoon slow down and the cost effects of West Asia disruption weigh on the quarter. I would like you to look through that noise. The direction of travel is unmistakable, and the destination is unchanged. An EBITDA of INR 1,000 per ton for India Cements remains very much in sight with the full benefit of the CapEx program flowing through the P&L from Q4 fiscal 2028. Cables & Wires, the project is on schedule, on budget. We had approved an investment program of INR 1,800 crore. Till the last quarter, INR 888 crore has been spent or committed. Channel partners onboarding is rapidly moving at a frantic pace. Facility set up is complete. Trial runs have commenced. Key regulatory approvals are in place. Leadership team is on board. The SAP systems, ERP systems are in place. CRM will be live and is under testing and will be live before the launch. We reaffirm commissioning and product launch in Q3 fiscal 2027, October-December 2026 quarter, precisely as committed to you when we announced this investment. We will be within our CapEx program, which we had announced earlier. Let me close where I began. Demand is strong and broadening. Fuel cost storm is a yo-yo we have to keep an eye on and wade through it. The West Asia crisis, I don't know when it'll end. Our acquired assets are turning from integration effort into earnings engines. A growth to 240 million tonnes is funded and under construction. This year we launch a new growth business in terms of Cables & Wires. We said we will cross 200 million tonnes, we did a year early. We said we would complete brand migration of India Cements and Kesoram, we did a quarter early. We said Cables & Wires would launch in Q3 fiscal 2027, and it will. That consistency of delivery quarter-after-quarter is our foundation and commitment. We remain very confident of a very bright future for the next quarter, the quarter after that, and the quarter after that. Thank you for your continued trust in UltraTech, and with that, I hand over the call for questions.

Operator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions.

Atul Daga: Sure.

Operator: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Amit Murarka from Axis Capital. Please go ahead.

Amit Murarka: Yeah. Hi. Thanks for the opportunity. Congratulations on a great result. My question is now on capital allocation, actually. You seem to be well on track to exceed INR 20,000 crore OCF maybe next year. You mentioned that the CapEx plan is like INR 17,000 crore over the next two and a half years. How do you think this growing cash flow will get utilized across dividends, cement CapEx, and is there any plan to scale up the Cables & Wires building material CapEx further?

Atul Daga: Amit, as of now, we are fully booked in terms of our cash flows. All the operating cash flows will get plowed back into growth. Beyond that, also, there is dividends for shareholders. As of now, I don't foresee any requirement for further investment in Cables & Wires. They will now first mature and milk their investment that they have done. Capital allocation, to conclude, remains very committed to Cement and shareholders.

Amit Murarka: Sure. Thank you. Just a second question on India Cements. I believe most of the targets you had in mind when you acquired the business is now nearing completion. Just wanted to understand what are the steps that remain before you contemplate, let's say, merging the business into standalone entity itself?

Atul Daga: There is a CapEx program underway which we mentioned has to get completed. There are some non-core assets in terms of land, which we need to dispose off. Q4 2028 or maybe a quarter earlier, we expect to complete our journey. There's a lot of work still happening. When we look at operating parameters, there are certain operating parameters which we still need to bring under control or in-line with UltraTech's standalone performance.

Amit Murarka: Got it. Sure. Thank you. Is this fair to assume this time you've not reported the standalone volumes in the presentation of press release? Fair to assume that the entire volume that is mentioned over there is basically standalone in terms of grey cement?

Atul Daga: Yes, please. As in India Cements volume. No, which volume you're talking about?

Amit Murarka: The standalone, I meant. UltraTech standalone, basically, yeah.

Atul Daga: Yeah. Entire India Cements is part of UltraTech volume. There's no separate. Yeah.

Amit Murarka: Got it. Sure. Thank you so much. I'll come back in the queue.

Atul Daga: Thanks, Amit.

Operator: Thank you. The next question is from Rahul Gupta from Morgan Stanley. Please go ahead.

Rahul Gupta: Hi, thank you for taking my question. A couple of questions. You have talked about you growing faster than industry over the past few years. Not just on volumes you have been outperforming on cement pricing as well. If we look at other large players, they are able to either prioritize volumes or they prioritize pricing. In your case, despite your base, you have been gaining share on both sides. Can you please help us understand what is working for you and not for others? That's my first question. Thank you.

Atul Daga: Thank you, Rahul. I think you already spoke for us. You give the answer. Nonetheless, how should I begin? I think UltraTech is a brand that customers trust. Decades of consistent delivery, bag-after-bag, site-after-site, which has made UltraTech synonymous with reliability. Quality that we swear by. Every tonne that goes out has to meet our quality standards. It's not that there are no complaints. If there are complaints, product complaints, they have to get resolved ASAP. Our complete network of plants, whether it's integrated plant, grinding units, or bulk terminals, everything is focused on meeting the customer's requirements. At Aditya Birla Group and same as at UltraTech, the legacy of governance and ethical conduct is at its highest pecking order. Dealers, institutional buyers, they know when they're dealing with UltraTech, that certainly is assurance for them and it requires and commands a premium. We are able to meet our customers' requirements wherever we are present with today almost 76 operating facilities spread across the country. We are within the reach of a customer with a network of over or nearly 2,000 warehouses, 150,000 channel partners across the country. Our dedicated transporters, almost 50%+ of our transport service providers are dedicated to UltraTech. All these things put together bring forward a power which is very unique to UltraTech. I don't know. I think, Rahul, it can be a commentary or a story which I can tell you over a cup of coffee, which might extend for a couple of hours, my story will not be complete. UltraTech today is in a position with more than 16,000 employees across the country and the network that I spoke about. Our RMC plant network, which has been rapidly growing, 477 RMC plants, 5,000+ UBS stores, which are dedicated dealers, if I can call them, dedicated outlets for UltraTech Cement besides any other building material, clearly brings out a respect for UltraTech as a brand which nobody else can come any close to.

Rahul Gupta: Got it. That's reassuring. Thank you so much. My second question is partly data keeping. The last quarter you mentioned that around INR 20 per tonne impact came in from the West Asia crisis. What would be that number for this quarter? I know things are still volatile, but any guidance for the next quarter that may come up in terms of cost? Thank you so much.

Atul Daga: Yeah. Next quarter, which is July-September quarter, will have a full impact of the war because we'll have all costs coming to a head from 1st of July, plus monsoons. Monsoons are doing all right, if not too bad, but I know there are some pockets in the country which are staring at a very dry spell. Generally, if monsoons are doing all right, maintenance, we would have a large number of kilns undergoing maintenance, so maintenance costs will be there. Fuel is expensive. We are stocked up, but the cost of fuel will go up. I would expect the cost to go up by INR 130 to INR 140 per tonne. All put together. I can't associate one line item with war and other with something else, but all put together, we should be going up around INR 130-INR 140 per tonne.

Rahul Gupta: Got it. What would be one-off cost inflation in the first quarter?

Atul Daga: In the first quarter was fuel cost plus packing bags. Packing bags was the biggest cost impact, and fuel.

Rahul Gupta: Sorry, any way that you can quantify what that number would be overall? Fuel and packing cost.

Atul Daga: Fuel cost, if you look at, it's given in the presentation. From INR 874 it went to INR 915 per tonne, which is a 5% increase. INR 25-INR 40 per tonne was increase in fuel cost alone. Packing bags was full quarter basis, we had seen packing bags from an average cost of INR 9± going up to INR 14-INR 15 also before settling down somewhere around INR 10 a bag. We've still seen an average increase from INR 9 per bag. We had for the quarter INR 12. From a INR 9 for a bag, it went up to INR 12 per bag average for the quarter. Yeah, these two elements. INR 40 per tonne was on fuel and INR 20 on give or take on bags.

Rahul Gupta: Got it. Thank you so much, and wish you all the best.

Atul Daga: Thank you.

Operator: Thank you. The next question is from Indrajit Agarwal from CLSA. Please go ahead.

Indrajit Agarwal: Hi. Thanks for the chance and congratulations on a good set of numbers. I have two questions. My first question has two parts on demand. Part of the demand has been helped by drier weather, particularly in the month of June. Do you think that impacts demand negatively in second half, particularly in rural areas?

Atul Daga: Yeah. There are still some dry states, as I was speaking today. For example, I was speaking to somebody in the morning. Rajasthan is going through a very dry patch right now. That demand impact will be felt next year because they will have water crisis. The usual slowdown in monsoon quarters. June was, of course, as you said, dry, but July onwards we have started seeing wet spells across various parts of the country. Good thing is that barring one or two states, every state has experienced rains, so it is not that bad. It is still the first month of monsoons. We will have to wait for August and September to tell us how the weather progresses and what is the impact of the dry stroke wet spell.

Indrajit Agarwal: Second part of the same question, do you see a step change in demand in East, which has been a laggard so far, at least in the past?

Atul Daga: Yes. Very much. Multiple states which have gone through elections, the land reforms which is about to come in place in one of the eastern states. The structural change which will be visible in the next, it is not next quarter story, but it is next two, three, four years story. East will witness good demand upcycle.

Indrajit Agarwal: My next question is on the fuel mix. Given that the correction we have seen in petcoke that is in the past month or so, is it still more favorable to buy coal or do we see the mix shifting more-

Atul Daga: No. Petcoke is now expensive, no? Petcoke has become more expensive in energy terms than coal. Yeah, coal becomes more attractive to buy. Domestic coal becomes more attractive to buy.

Indrajit Agarwal: Sure. Lastly, the INR 130-INR 140 per tonne impact that you mentioned, does it also include the impact of operating deleverage, given that 2Q is generally a low volume quarter?

Atul Daga: All in I am looking at. Maintenance cost, operating deleverage if you want to call it, fuel costs. Packing bag luckily is not moving haywire. It's a usual July, September quarter impact. Whether we cannot really say it's happening because of the war, let's be honest with ourselves. It's a usual July-September quarter.

Indrajit Agarwal: Yeah. Because the quantum looks much lower than the seasonality. Congratulations on that as well. Thank you. That's all from my end.

Atul Daga: That's UltraTech for you, my friend. Thank you.

Indrajit Agarwal: That's all from my side. Thank you.

Atul Daga: Thank you.

Operator: Thank you. The next question is from Prateek Kumar from Jefferies. Please go ahead.

Prateek Kumar: Yeah. Hi, good afternoon, sir. Congrats, hope great results. My first question is on, can you revisit your cost-saving numbers? I think the last quarter, they were like for the next two years, we had talking about further 200 million tonnes.

Atul Daga: Yeah.

Prateek Kumar: How do you see that number?

Atul Daga: Prateek, what I had said also, instead of looking at it quarter-by-quarter, we should look at it on an annual basis because this quarter I show you something and I'll have to show a negative performance in July-September quarter. Lead distance has come down further from INR 367 to INR 360 per tonne now. Seven km of lead has come down. If you annualize it at at least INR 2.5-INR 3 per tonne per kilometer, that's a saving which is visible upfront. The clinker conversion has improved to 1.5. That's a small improvement. Other than that, I think we would want to call the number. Power consumption has gone down, which is visible in my presentation. Power rate has gone down because of our power mix changes, which is visible in our presentation. At the end of the year, we will give a comprehensive number that will make more sense to do a comparison.

Prateek Kumar: Sure. Thank you. On war impact on cost curve, it was expected that the impact of cost would be, and you also, I think, presented in a slide last time, further of 250 million tonnes to maybe a higher number. Including this INR 130-INR 140 per tonne cost impact next quarter, all of it is in the cost now by the end of 2Q for the company.

Atul Daga: Prateek, what I talked about 250 million tonnes would be expecting for the industry, generally was not a very thorough number. As I mentioned now, from where we are, we might see INR 130-INR 140 per tonne. Now I'm thinking about UltraTech Cement. INR 130-INR 140 per tonne further increase in cost, we would trigger measures to absorb these costs. We'll see what we can achieve. Cost increases could be anywhere between INR 130-INR 140 per tonne in the July-September quarter, I cannot alienate what is because of war and what is the normal maintenance quarter.

Prateek Kumar: Last question on your capacity utilization of 81%. Can we split it region-wise? As you said, East region is impacting, any specific demand trend on regional basis?

Atul Daga: One second. If I look at my— Is this the growth number? Yeah, 13.1% growth that we talk about. East was the slowest in April-June quarter, partly because of the elections, labor availability. Central was the highest, growing above 15%. South and North were a shade below 15%. West and Central were above 15%.

Prateek Kumar: Sure. Thank you. I will get back to the queue.

Atul Daga: Thanks, Prateek.

Operator: Thank you. The next question is from Siddharth Mehrotra from Kotak Securities. Please go ahead.

Siddharth Mehrotra: Thank you for the opportunity and congratulations on a good set of numbers, sir. Given the backdrop in which we are now almost 30% of the overall market, and we seem to put no foot wrong. Just wanted to know, what do you think are, say, the top three challenges for our company, say from a five-year horizon?

Atul Daga: The challenge. I am trying to think. I will think and come back in the queue. I really do not know. I am not being hoity-toity over here, but the biggest challenge for the industry and for us would be if demand slows down, which I do not foresee happening. From that point of view, I think we are in a very good situation where we have 200 million tonnes of capacity utilized at 81% this quarter, 200 million tonnes going to 240 million tonnes, and further there will be growth further very soon. We will come back with our growth plans. As long as I think fundamentally we believe as long as demand is there, everything else is immaterial. As I mentioned, the urbanization factor, which is 35% in India, might reach about 39% by 2030, which is still way below as compared to most of the other markets. If something were to happen structurally to demand growth, suddenly people are not buying houses and industrialization is not happening, data centers start vanishing from India and being done in Pakistan, or anywhere else, that could be an issue which I do not think is going to happen. Demand remains strong. The challenge will be that we do not have capacity. We have to expand.

Siddharth Mehrotra: Got it, sir. This is well understood, sir. Sir, just wanted to check. There is a slide we have presented on raw material cost index, I noticed that our limestone raising costs have gone up significantly, almost 13%, 14% on a quarter-over-quarter basis, and they are at the highest level in the past two years. Sir, can you just tell us what has happened there? Why is this cost suddenly spiking?

Atul Daga: I do not know what kind of vehicle you drive, petrol or diesel, you did not pay any higher price for fuel, industrial diesel went up almost 50%, from INR 100 per liter to INR 157 per liter is what it had peaked at, right? From a INR 78-INR 80 per liter, my colleagues correct me, from INR 78-INR 80 per liter pre-war, it went up to INR 150 per liter during the war period. They had reduced it, now I believe again prices are going up. Again, it is an upward movement. This diesel is a very big component in limestone raising cost, which impacted our raw material costs.

Siddharth Mehrotra: Understood, sir. This is essentially industrial diesel which is being used. Got it.

Atul Daga: Yes, industrial diesel. Yes. Diesel. Industrial diesel. Yeah.

Siddharth Mehrotra: Okay, sir. Just, sir, one last question. Sir, any sort of guidance or projections or any aspirations we have, say, for example, in the Wires and Cable segment, which is about to come online next quarter?

Atul Daga: Sky's the limit, we don't give any guidance. We would like to be profitable, grounded, and grow with the market.

Siddharth Mehrotra: Got it, sir. Thank you.

Atul Daga: Thank you.

Operator: Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. The next question is from Raghav Maheshwari from Equirus Securities. Please go ahead.

Raghav Maheshwari: Congratulations, sirs, on the excellent results. Sir, just one thing want to understand, as you mentioned in your opening remarks about brand power and premiumization. My question is regarding that. How do you see Indian cement industry as a brand product play versus right now just going into the market as a commodity product play? What is your view on a brand power role in the trade market today and its importance evolving over the medium- to long-term?

Atul Daga: Thanks, Raghav. I think India is a retail market. From any wild stretch of imagination, if you look at the urbanization level in the country, the demand potential that exists, the RMC mix in the country, RMC as a percentage of overall business might not be more than 20%. That clearly says that where is the remaining cement getting sold? It's in the retail market. As long as cement or India is a retail market for cement, it will remain a branded cement play is my view, my personal opinion. There is enough data available for you. As I told you, RMC, for us, it's about 3.5%. 3.5% of our sale is RMC. Our institutional customers would be 35% or thereabouts, give or take. 65%-66% would be retail. If I marry this data point to India as a whole, as the demography of India, the spending habits of India. If you look at the number of cities which are more than a million population, today, we have 50-something cities which will reach to 71 cities by 2030. 63. Sorry, 63 today. 63 cities today which will reach about 71 cities by 2030. The point is there's a huge amount of urbanization required. If you look at cities with vertical housing, they are not too many. You can count them on your fingertips. Now Indian housing is verticalizing wherein corporate real estate is happening, but large parts of the country remains to be individual home builder. As long as India is an individual home builder market, it's a retail market, and that's where the retail markets bring the requirement of brand. Very unique market, India. Not just cement. Steel is also branded. There are several other commodities which if you step outside India, and look at those are commodities. India, for example, TMT, my colleague is telling me TMT rebar. Tatas have a steel, which is a branded product. JSW has a retail brand on steel. Paints in India is a big brand. Cement, because it's a retail market. Why are they brands? Because it's a retail market, and that's where cement also is in the same story. India is a retail market, and that's where brand play comes into picture. I believe given the timelines that we look at least, I don't know, a very long number of years before India is fully urbanized. Till then you will have a brand play. I hope I have answered your question.

Raghav Maheshwari: Yeah. Sir, is it a fair understanding that till then market level we will not achieve almost 70%-80% sales of cement via RMC or for the key customers. Till the brand power will remain in the key focus, right?

Atul Daga: Yes. If I were to correlate this with UltraTech, out of our total sale of 40 million tonnes or last year total sales of 145 million tonnes, 3.5% was RMC sales. This is in spite of the fact that we have the largest number of RMC plants in the country. We have today 477 plants. RMC will be a surrogate. You go to any other market, you step to the neighboring UAE where RMC is the biggest customer for cement. There we don't have a brand play. As long as India is still very in its nascent stages in RMC, India will remain a branded cement play.

Raghav Maheshwari: Got it, sir. Thank you. All the best.

Atul Daga: Thank you.

Operator: Thank you. The next question is from Raashi, from Citigroup. Please go ahead.

Raashi: Thank you. My first question is on pricing. You mentioned that the June exit prices were higher in the south and the east. Are you expecting the overall monsoon quarter to average slightly higher than the prior quarter or flattish?

Atul Daga: Expecting higher is definitely everybody's desire. We will attempt it. We'll see where we land.

Raashi: Okay. Understood. Industry volume growth would be how much during this quarter?

Atul Daga: Too early, but anywhere between 7%-8%. We want to see some more results, but our marketing intel says it should be around 7%-8%.

Raashi: On the capital expenditure, the bulk of your expansion is getting concluded in FY 2028. Beyond that, is there anything on the drawing board yet organic, or is it going to be inorganic if at all opportunities come up?

Atul Daga: Inorganic, obviously, if there are opportunities, we will examine them. Our team has already got onto the drawing board to take us beyond 240 million tonnes. Once the plans are ready, we will come back with absolute micro details.

Raashi: Got it. Just one last question from me. The blended coal cost was how much during the quarter, and how much is it now?

Atul Daga: Coal cost, fuel cost is how much? INR 1.9 per kcal. Yeah, that you are asking was INR 1.9 per kcal.

Raashi: On a coal cost basis, like on a dollar basis, do you have?

Atul Daga: $134 per ton.

Raashi: Where are we at now?

Atul Daga: Would be around INR 2 per kcal. INR 2 per kcal. Next quarter. Current quarter, yeah. Raashi, INR 2 per kcal, I think we won't go beyond that because we are fully inventory loaded.

Raashi: Got it. Okay, cool. Thank you.

Atul Daga: Thanks, Raashi.

Operator: Thank you. The next question is from Pulkit Patni, from Goldman Sachs. Please go ahead.

Pulkit Patni: Sir, thank you for taking my question. Sir, my first question is more a clarification to the question Indrajit had asked. Typically, between first and second quarter, just because of negative operating leverage, you have about a INR 200 increase in cost per tonne. Plus obviously there's increase in power and fuel cost. What you mentioned was the overall increase in cost would be more like INR120-INR 130 per tonnes. I just want to make sure that I get this.

Atul Daga: Yeah. There'll be INR 130-INR 140 per tonne cost pressure. What Indrajit talked about, negative operating leverage, there is a positive in that negative operating leverage also because our size has been continuously going up. Whatever volumes we sell will be significantly higher than earlier periods, which will give us still some advantage.

Pulkit Patni: Sir, still it's a lot. It'll be INR 200 per tonne decline plus the increase in fuel cost. That should be in the range of INR 320-INR 330 per tonne overall, right? Is that not right?

Atul Daga: No. I am looking at not INR 200 per tonne decline, I'm looking at INR 140 per tonne decline in terms of my INR 130-INR 140 per tonne decline because of costs.

Pulkit Patni: Okay. Maybe I'll take it offline just to understand things better.

Atul Daga: Sure.

Pulkit Patni: My second question is on river linking while obviously the.

Atul Daga: Pulkit.

Pulkit Patni: Yes, sir.

Atul Daga: Pulkit, one second.

Pulkit Patni: Yeah.

Atul Daga: What I was talking about is from the previous quarter.

Pulkit Patni: Sequentially.

Atul Daga: Sequentially. Yeah.

Pulkit Patni: Sure.

Atul Daga: I was not commenting on Y-o-Y because I think nobody looks at Y-o-Y these days.

Pulkit Patni: No, absolutely. My question was also only sequentially. Okay. I'll need to get the better understanding. My second question is on river linking. You mentioned Ken-Betwa, which is the first project which is underway. Just to understand, is river linking a very cement intensive project? There could be more coming in India in the next few years. Just wanted to get a broad understanding, how cement intensive. Similar to a hydropower plant, would it be?

Atul Daga: Well, I don't have a comparison with hydropower plants, but river banks have to be done. Tilting has to be done. I don't know whether dams are required or not required, but river banks have to be built, which is concrete. With the river banks being built, you have concrete structures on the either sides as well. We expect it to be very cement happy situation. Vadhavan Port, I forgot to mention, I should have mentioned now I think multiple packages have already been awarded, which means that that work will also commence for the country. A lot of positivity.

Pulkit Patni: Absolutely. No, thank you. Thank you so much.

Atul Daga: Thanks, Pulkit.

Operator: Thank you. The next question is from Ashish Jain from Macquarie India. Please go ahead.

Ashish Jain: Hello. Hi, sir. Good afternoon. My first question is on dividend. How should we think about dividend? Because last year what we paid had a one-off. Should we think it is more per share basis or as a percentage of profits? How should we think about it?

Atul Daga: Percentage of profits. That's the way our Board is looking at it.

Ashish Jain: X of the one-off is the more sustainable one to think.

Atul Daga: I'm sorry.

Ashish Jain: X of the one-off that we paid, like the special that we paid as a one-off.

Atul Daga: Yeah. To call it special, be happy with it. I am expecting good dividends. I am holding my stock.

Ashish Jain: Right. Sir, secondly, in terms of pricing. Let's say in the short term, which is Q2, I understand pricing, we are hoping it to be resilient. Is there something for us to believe is a more structural change and shift on profitability focus, at least for us, and hope that even if, let's say, input cost goes down in the later part, pricing and margins should structurally remain higher? There could be a focus shift to market share much faster with all the capacities that we are adding?

Atul Daga: I don't know. You went too long. I've lost track of what you were saying. Can you repeat?

Ashish Jain: No, sir. What I'm saying is, near-term, the cost inflation will support pricing is the hope or expectation at least that we have.

Atul Daga: Yeah.

Ashish Jain: In the later part if input cost goes down, should we think that pricing will be at risk or given the industry focus on profit?

Atul Daga: I feel, Ashish, prices move with demand. If demand is strong all India basis, prices can go up. If cost curve comes down, then obviously not necessary to prices to reduce.

Ashish Jain: Okay. Thanks a lot.

Atul Daga: Thank you.

Operator: Thank you. The next question is from Pinakin from HSBC. Please go ahead.

Pinakin: Thank you, sir. Two questions. If I look at the grey cement volume growth, in the fourth quarter it was 9.3% year-on-year. In the first quarter it's 13.1%. Clearly, the market sweeping up. If the industry environment remains as it is, can we expect double-digit demand growth, double-digit sales volume growth for grey cement in FY 2027 for the company?

Atul Daga: Yes, we are targeting double-digit volume growth this year.

Pinakin: Okay. What will you attribute to this acceleration in market share gains quarter-on-quarter?

Atul Daga: Pinakin, we spoke about it. I think the fundamentals of our brand are very strong. Our distribution network, our reach to the markets, our people, our quality, the brand which people trust, everything adds up to. I mentioned about Whatever category you might want to call the old India Cements and Kesoram brands, they were certainly not A category brands. From their own B or C category markets, we have not lost a market share. What does it mean? We have converted that market, the customer who was happy buying a B and C category at a particular price point now has got convinced to buy UltraTech at a higher price. That's where our strength lies, and that is where the whole growth trajectory is. That is where we are able to do better than the industry.

Pinakin: Sure. Thanks. Just on the variable cost, especially packaging and energy. We understand Q2 will have a delayed flow through of the prices that are prevailing in April and May. If we take the spot prices of petcoke, of packaging, should we expect second half variable cost to be lower on a per tonne basis versus the first half?

Atul Daga: Yes. Logically, yes. War has to go out of the way so that oil subsides and coal and petcoke, because ocean trade, my colleague was telling me just today, insurance premiums have gone up to 4%-5% for the ocean route as compared to less than 1%. That is the kind of differences which the war is creating. Once the war is out of the way, things should stabilize, and H2, hopefully, God willing, should be a better place in terms of costs.

Pinakin: Got it. Thank you very much, sir.

Atul Daga: Thank you.

Operator: Thank you. The next question is from Ritesh Shah from Investec. Please go ahead.

Ritesh Shah: Hi, sir. Thanks for the opportunity. Congratulations for good set of numbers. Three quick questions. Sir, first on Cables & Wires, what is the sort of working capital days that we are looking at?

Atul Daga: Working capital days. Initially, we will have a higher working capital because we have to ramp up inventories. Going forward and structurally, we are working on financing our suppliers on Cables & Wires, which should release working capital. Excuse me for having a higher working capital for the next six months, after which we start stabilizing and coming down to 30 days± of working capital. I don't have a number readily, but that's the intent.

Ritesh Shah: Right. Sir, specifically on the inventory days, I think again, we'll be procuring from Hindalco. Given the lead distance, it's quite low over here.

Atul Daga: Four hours.

Ritesh Shah: Okay. Sir, there should be a tangible benefit on the denominator on working capital over here, right?

Atul Daga: Yes, please. That's what I'm saying. I don't have a handle on exact number which we land with, but April-June 2027 should be a period to see a stable number. Right now, it'll be a ramp-up of working capital.

Ritesh Shah: Sure. Sir, my second question is we have already commissioned 55% of what we are supposed to commission for the full-year. We are adding almost 45 million tonnes FY 2027-2028. Would you like to put a certain number, say, for our capacity addition FY 2027-2028? This is like what percentage of the market? Probably you can qualify it from a capacity share or a market share. Either of it will help.

Atul Daga: This, I think we'll have to work out and give it to you. March 2028, we should exit with 235 million tonnes in India. 237 million tonnes. We will end 212 million tonnes March 2027. That's the balance coming up to 22-25 million tonnes the next year.

Ritesh Shah: Sir, as per your estimates, how much is the industry capacity addition in 2027-2028?

Atul Daga: We'll have to again recalibrate it, Ritesh, because whatever I hear, some industry players are wanting to revisit their expansion plans. When we have a firm number there, then only, I think you would be in a better position to tell me what is the industry growth expected. You know my number. We will reach at 235 million tonnes. 237 million tonnes end of March 2028 from 200 million tonnes. Where are we today? 200 point something million tonnes today. We have 37 million tonnes coming in 2027 and 2028.

Ritesh Shah: Perfect. Sir, just last question. You covered most of the variables, we didn't hear magical INR 1,400 per tonne number from you. Would you like to qualify timelines over here?

Atul Daga: I have already called it out N number of times. There's no point in repeating it. January-March 2028 quarter without any war.

Ritesh Shah: Without any more. Okay, cool. Thank you. Thank you, sir.

Operator: Thank you very much. We'll take that as the last question. On behalf of UltraTech Cement Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.