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Ladies and gentlemen, good day, and welcome to the Orient Cement Limited Q2 FY '23 and H1 FY '23 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Mittal from ICICI Securities. Thank you, and over to you, sir.
Thank you, Melissa. Good afternoon, and a warm welcome to everyone. On behalf of ICICI Securities, we welcome you to the Second Quarter and First Half of FY '23 Earnings Call of Orient Cement Limited. On the call, we have with us Mr. Deepak Khetrapal, MD and CEO of the company. At this point of time, I will hand over the floor to Mr. Deepak Khetrapal for his opening remarks, which will be followed by an interactive Q&A session. Thank you, and over to you, sir.
Very good afternoon to everyone, and I join Harsh Mittal in extending a very warm welcome to all of you. Thank you for sparing the time. Thank you for investing your time with us. And for those of you who are invested with us even financially, thank you for investing in us and believing in us. Thank you so much.
Where do I start this call, in the sense that we all know the kind of quarter we've had. But even then let me at least start with some of the positive things that have happened during the Q2, and I'll obviously come to the hard numbers in a minute, I won't take too long over it. But a few good things that I certainly want to point out to people who are interested in us. One, for those of you who've seen that in social media and all, Deloitte does run a global program called Best Managed Companies All Over the World. And in India, this was the second edition.
And they have a very robust process through which the best managed companies are actually selected and they take us through a 4-stage evaluation cum screening process in which we need to make detailed presentation of our strategy and communication and implementation capabilities, and innovation is one other pillar, culture and commitment is one pillar, and obviously, governance and then the financials. So based on that, after the 4, we finally were selected amongst a handful of companies to have the title of Best Managed Companies. That's something that we are very proud of because it was a fairly tough competition and a very robust evaluation process. Otherwise, all of us are aware these days how awards are actually being given out or how they are being received. So this one is special because it's actually come through a very, very professional evaluation process. So that's something which I thought some of you would be interested in knowing.
The other very important thing is that in this quarter, which actually was a lean quarter, we managed to actually migrate from SAP ECC version to SAP S/4 HANA on cloud. So we are using Google Cloud as the platform to host our data. And we are told that we are perhaps the first cement company to have done this migration. And also, we take pride in the fact this migration, which typically is considered a 6- to 9-months project, we did in an insanely short time of just 3.5 months. 3.5 months is what it took us from starting the work to going live.
So again, a very important step, not in terms of just how quickly we did it, that we are the first cement company who have done it, we also have done it to keep our progress on the digitalization and to become more and more a company which is driven by data and data analytics, and decision-making, which will be largely based on the data that we have with us. So it's not just technical migration, it's a complete migration, and the reason to choose Google Cloud as a partner along with SAP S/4 HANA is because Google Cloud has the reputation of offering the best analytics capabilities in the way we can create our data lakes and data oceans and things like that. So we are all set. And so that's another, I would say, positive in terms of building the backbone of the company. So that we managed to complete.
And the third important thing I would like to just mention -- again, it's been there in social media -- for some of the people who might be in the market, we will launch. It's a very small launch as of now. But we actually launched a new brand. As most of you would remember, our StrongCrete as a brand has really been doing well and we are very delighted about this performance. We've actually launched another premium cement where we actually have launched it with brand name Orient Green. And why we are calling it Orient Green is simply because this cement has about 15% less carbon footprint than the industry norm. And obviously, we are positioning it as a green cement, as an environmentally responsible cement, and the byline also is, a responsible cement for the responsible you. That is you could be a house builder, you could do the contractor, you could be, let's say, a consultant or an architect. So responsible cement for the responsible you. And the brand is Orient Green.
It's priced at -- like if you remember, our StrongCrete is today priced at INR 45 higher than our PPC. Orient Green is priced at INR 23 higher because some of the customers have been telling us they're finding INR 45 premium to be a little too steep. That's why we are right now at where we are, I'll do the numbers. And Orient Green is another option from our stable, where we are offering something which is in the middle of our PPC cement and StrongCrete and leaving the choice to the customer how much more they want to pay. But we are sort of -- strictly speaking, Orient Green has been focused on that segment of the market where people are actually becoming environmentally conscious. And not just environmentally conscious in the simple way of how we produce it, also, for example, in the amount of water they need to do while curing the slabs that they cast and things like that. So there are obviously benefits for the consumers there.
And the price, as I mentioned, is INR 23 higher than our PPC. So that's the other launch and initial response has been rather good. We're very happy I think almost every day. We have currently launched it only in a few districts of North Karnataka. Largely, we're sorting out the availability of bags. You know, when you start launching a product, lots of things need to come connected. So we started with North Karnataka, which is as it is a little more difficult market, but it's closer to our Chittapur plant where we are producing this cement for now. And we plan to roll it out.
But within the North Karnataka market, our average per day, we are actually casting 3 to 4 slabs every single day from the time we've launched it. So for a small market, for a product which is completely positioned differently, we are happy with the initial response. And we will obviously keep supporting our customers, who buy this product, with our technical services, to actually train them how to use it to have the full benefits of the product. So these are, I would say, the good things from the recent past that I wanted to sort of place before you.
Now coming to Q2. As I'm sure all of you have seen that, Q2 actually has been, I'm naming it as brutal year for the industry. It's really been brutal on us. We too have had our own share of grief. And the grief has come more from the fact that we had absolutely unprecedented rains in our catchment areas. To give you an example, and as you know, we would be selling cement in 300, 400 kilometers around our plants. So our mother plant, which is Devapur in Telangana, that plant, as it is, it's a very high rainfall area, about 900-millimeter is the rainfall that we receive every year. This year, we've already crossed 1,550 millimeters. And the rain obviously is not happening only on our plant, it's happening in the entire region there. Just to give one data point of how heavy the rainfall is. And when rainfall happens, not only does the construction slows down, also the mining of coal slows down, the gypsum availability goes for a toss, you get fuel which is wet.
The alternate fuels that we are using more and more during monsoons, it's very difficult to use them when they become wet. As it is the calorific value is low and when they come in the wet form to you, it becomes very difficult to use them. The liquid hazardous waste that we've been consuming became very short supply in these 3 months of monsoon. People are talking only about sales being hit, but I think equally important is the impact on the availability of various materials and costs. So that's been a negative for us for sure. Overall on this, for example, for our Devapur plant, we always buy our coal from Singareni coal mines for the domestic coal. And when we're buying that coal, this particular quarter, we've seen a very strange phenomenon of the rakes being not available. So we are having to transport coal from Singareni mines to over plant using trucks by road. And obviously, that adds to the freight cost, the input cost of domestic coal itself goes up, not because the coal itself is that much more expensive, but also because the freight costs have gone up.
So these are the impacts of, I would say, the heavier than normal monsoon that we've felt. So first, we were betting for, as I say, cover from the rains that we were getting, and now I think when we have declared the results, I'm betting for cover from our investors, because obviously, they are unhappy with the results and I can assure all of you and all of the investors that we are very, very frustrated because no matter what we've tried, we still are, let's say, significantly lower, more than 70% drop in EBITDA, whether on absolute terms or per tonne basis.
At the PBT level, we actually have gone minus, although it's a small loss, but frankly, having red at the PBT level is a matter of great embarrassment to all of us. But since I don't have the luxury of hiding, being a listed company, here I am talking to all of you and trying to explain as to what all hit us.
So disappointing as they are, there are the hard numbers. Most of you have seen it, but I will perhaps have a little more detail on the numbers that you've seen so far. Our net sales, as you've seen, are down 1% Y-o-Y. And sequentially, they're down 14%. I'm talking rupees crores. The volumes in this particular quarter have been at 12.36 lakh tonnes, INR 1.24 million, as many of you would be quoting, which is nearly 3% down over last year. But if we remember that last year in Q2, we had sold about 24,000 tonnes, 25,000 tonnes of clinker. And this year clinker sale was out of question because the coal supplies were so uncertain, we would never use our coal and make another cement manufacturer have our clinker. So we didn't sell any clinker at all.
So If we exclude that, purely in cement, the drop is 1.4% over last year. And sequentially, the drop in our cement sales in volumes is about 10%. On H1 basis, on the face value, it seems that we are flat, 26.37 lakh tonnes, with 26.29 lakh tonnes last year. But again, last year had 24,000 tonnes. So from that perspective, perhaps we will have nearly 1% growth in H1 over last year.
Realization in Q2 has been somewhat better, we have a realization which is 4% higher year-on-year. But on a sequential basis, it's down 4%, which is, like I said, not something that we have liked, but between Q1 and Q2, which is a heavy monsoon season, the drop in price perhaps was far from course, accepting that the costs behaved very differently. So that's where the pain is, not so much in the volumes, per se. Like I said, volumes would be lower by 1.4%, and let's say, the prices being higher than 4% year-on-year, it won't look so bad, but the results are bad purely because of the costs that we've had to incur to produce the cement.
So heavy rains and the slow markets all across in our markets at least. The markets are not supportive with all the increase in cost that I'm going to narrate to you. The ability to pass on these costs to the markets have not been fruitful at all, and that's where the pricing has really, really hurt us, or rather the costs have hurt us because we couldn't pass it on to the markets. In the market that we are operating, especially when we talk about Telangana and especially when we talk about Karnataka, there are no mega projects. In any cement cycle, we do need the support of some large government-sponsored projects in our area of operation to maintain the volumes. Now they have not happened. Despite that, the volumes that I'm quoting are where they are, which I believe are not so disappointing, although we wish they could be better.
In the absence of demand from South, we actually have done somewhat better. Actually, Maharashtra has supported us rather well. So as a result, our sales, if I look at Maharashtra and the rest as a whole, they're close to 55% against the normal 50%, 51% that we have. So Maharashtra, we've been able to sell more because demand was there. The other impact of heavy rains is that the larger projects, who have the infrastructure to continue construction despite rains, because they have more mechanized equipment, they have better labor camps, they have everything. They consumed a lot more of cement. And this particular quarter, our B2B sales or the nontrade sales, as the industry calls it, have actually risen to 55% from what I said that we normally used to be doing about 40-odd percent there, so 55% in this particular quarter. What that basically means is when you actually move more towards -- sorry, sorry, my apologies. Non-trade is 45%, not 55%. 45% from old 40%, and my apologies, please make the correction, which was 39% in the same quarter last year, which has gone up to 45%.
What that does is that basically, because B2B market is a lot more, I would say, favored towards the customer, because they're all large customers who negotiate very, very hard and with the volumes being attractive, almost every cement manufacturer tries to book that order. So we get prices which are challenged. And also, they consume more of OPC, which as you know, being unblended, costs us more to make. So the impact on cost if you see higher, it also takes into account the higher proportion of nontrade sales and higher proportion of OPC sales.
Another dynamic which is important to remember is, as I mentioned, the markets in South have been a little soft. So the impact has been that the capacity utilization in this quarter at our Chittapur plant has been a lot higher than the capacity utilization at our older plants at Telangana. Now what that does is, now as I think most of you would again know, our Telangana plant uses domestic coal, which we buy some Singareni coal mines. They may become a little more expensive because of the freight cost by road. But petcoke costs have been at a completely different level.
And for Chittapur, even at the cost that we've incurred, Chittapur's lowest cost fuel even today is petcoke. Because from Singareni or elsewhere, if you transport coal all the way, the landed cost of coal at Chittapur will become unaffordable. So we've been using more of petcoke. And petcoke, as it is, has suffered the highest inflation. So in the overall fuel mix, one is overall clinker production mix, Chittapur's contribution for the company is a lot more than Devapur. There we use more expensive coal. So the entire fuel mix for the company as a whole has got driven in a way where the heavy cost or high inflation in the cost of petcoke has hurt the overall power and fuel costs.
And if you actually look at now all these dynamics, more OPC, more production at Chittapur, even then when I'm sort of looking at my power and fuel costs, I'm sure you would agree, although they look 61% higher than last year at INR 1,647 per tonne of cement, to my view, from whatever results I've seen, they're still amongst the lowest power and fuel cost in the industry. Maybe just 1 or 2 other companies would have a slightly lower power and fuel cost. And all the negative factors I've already accounted in front of you. And this is despite the fact that Chittapur actually is a more efficient plant, but it's dependent on petcoke purely because of the landed cost there.
The other element in power and fuel cost also which has hurt is that at Devapur, we did not get enough of the higher-quality domestic coal. And for running the production to the extent that we ran, we had to use some of our very expensive imported coal, which normally we use only as a sweetener to the domestic coal. To make sure that we keep producing and keep delivering to the markets, we also had to use some of our inventory of sweetener coal, which is a lot more expensive, our imported coal is so much more expensive. We had to use more of that at Devapur also.
But the aberrations, I'm calling them aberrations, and hopefully, they're just transitory, that when the capacity utilization at our Devapur plant starts getting better in terms of how it used to be in the past and Chittapur sort of keeps producing well. So all these aberration in terms of higher OPCs than our norm, higher utilization of capacity at Chittapur compared to Devapur, hopefully, they should grow over and we should sort of get back to normal fuel mix for the company as a whole. Just to give you -- I know last year -- sorry, not last year, in the previous quarter, when I was doing the investor call, some investor had asked me for the fuel cost on a million calorie basis. So I can give you some idea of how the costs have been.
So in Q2, petcoke for us, our consumed cost has been INR 2,568 per million kilocalories. Just to set the perspective, from INR 1,500 last year, it's INR 2568, that's the petcoke cost at Chittapur. You can see the difference. The domestic coal also, for various reasons, including the fact that the Indian miners also have been getting up the price. Those of you who could see the profitability of Coal India Limited, if you saw, given the increase in their volumes and sales, increase in their profitability obviously means that they have jacked up their prices. Obviously, taking advantage of the fact that international prices of coal are very, very high. So in domestic coal, in this quarter has been around INR 1,900 per million kilo calories from about INR 1,330 year-on-year.
In this atmosphere when the other fuels are expensive, even the alternate fuels, they've nearly doubled in cost over last year. Because everybody saw opportunity. The irony is that even when you go for renewable power, because coal in expensive and power is expensive, even the renewable power generators, they have increased their prices of renewal power, although there was no cost escalation at all, but taking advantage of the higher price of other power sources, they've also increased the prices. So there has been a beating from all possible quarters. I would say, overall fuel cost, actually, if you want to know -- so I've given you how each of the fuels was there, but overall for us in the last quarter, we've had the fuel cost at INR 2,379 as the weighted average cost per million kilocalories of fuel that we have had, which is up from INR 1,336. I'm giving you now blended costs after having given you the petcoke and domestic coal and those costs. And for the H1, the blended fuel cost for us is INR 2,358 per million kilocalories versus INR 1,296 of last year.
So that gives you some idea of inflation in the fuel cost. The savings grace, quite honestly, for us, has been the renewable power that we've used, which actually has reached, in the overall mix, 18% of renewable power, both at Jalgaon and at Chittapur, where we are buying renewable power at these plants. Telangana even today makes the renewable power a lot more difficult to use because of the statehood, as you know. So outsourcing power from elsewhere is driven by states the way they want their grid and their power generation companies to perform.
With the waste heat recovery project at Chittapur, which is under construction, which as I said earlier, we will be commissioning towards the end of this financial year. When that comes in, obviously, our -- and waste heat recovery, again, is more or less a renewable power because we are not burning any fuel to generate that, so obviously this percentage will go up even further. We continue to be extremely efficient as we've always been. There's no gap there. And as a result of that, if you see, despite the fact, I'm telling you how much is the increase in fuel cost, and this fuel cost I'm talking about, it has increased both for fuels and also for our CPPs, but the power and fuel cost per tonne is not looking as high simply because we managed to increase renewable power, we managed to increase to the extent possible. I mean, we've been handicapped a little bit by availability challenge on the alternate fuels, but even when we have used alternate fuels. And therefore, the overall cost is not looking as high as perhaps the landed cost of fuel is. So that's, again, I would consider an achievement. So what next. I can give you all the reasons, but at the end the fact is that I'm feeling extremely frustrated and disappointed, as all of you would be with what we have had, as a result of which EBITDA is, as I said, from INR 137 crores in the quarter last year, we are down to INR 37 crores. And per tonne basis, we've come to about INR 300, which is, again, more than 72% drop over last year. I can't see anything which is more frustrating, but we have to live through these times and hope that some of the transitory challenges will get over.
Then the relation, I've already told you, where there've been total cost per tonne are obviously largely because of it. One thing which I certainly want to highlight to you, one is the variable cost of power and fuel costs? Some of you would obviously be seeing our total cost, I'm now talking about fixed costs, looking a little bit higher than what perhaps they should have been, given our track record. And on that, again, I'd like to just share a little more information with you, which is that when we compare our fixed cost in Q2 this year vis-a-vis Q2 of last year, there are a few things which are, I would say, distorting the equation.
To begin with, for example, last year, in Q2, we had reversed some of the provisions which had been made earlier for variable pay to our employees. And last year, after seeing how the year was progressing, in the second quarter itself we had seen signs, so some part of the variable pay we had actually reversed in Q2, which obviously depressed our people costs last year, which was not really a reduction, just a provisioning. In the previous quarter, we were little higher than last year, this quarter they got little. So that is nearly INR 4 crores of impact of reversal of provisions of variable pay last year in Q2.
We had some very old cases, when I'm talking about old cases, these go back to year 2005 and before, sales tax cases on the freight costs, which were in dispute with the state government because that time sales tax used to be a state subject. With that many years gone, I think even government was a little bit keen. So they had -- Telangana government, I'm talking about -- Telangana government had actually floated a onetime settlement scheme saying you pay -- I think, they were saying 40% of the total claim and no penalties, no interest, nothing. I'll just close all the files rather than having to go through the suspense all over again.
And we took advantage of that. So these costs pertain to very, very old times. So we have taken a hit of about INR 1.8 crores on account of onetime settlement of the old sales tax cases, but to that extent, the balance sheet becomes more clean. When I mentioned to you that we also migrated to the next version of SAP and incurred all the cost, that cost itself was about INR 2 crores, which obviously had to be incurred when we were doing the project.
And also in this quarter, we quite didn't expect the range to be as heavy as they are. So we had already planned out some campaigns on our brand building, which again, compared to last year, we spent about INR 2 crores more. So nearly INR 10 crores in fixed costs, which are looking, let's say, higher than last year same quarter, they are more a distortion rather than an apple-to-apple comparison. So I just thought I'll explain that for you in case that provides you a little bit better insight into why the results are where they are. They could -- I mean, perhaps if this INR 10 crores is not there on the balance sheet, there obviously could have been INR 70, INR 80 per tonne difference in cost. Coming to the balance sheet now. Obviously, we have paid another INR 37 crores to our project debt in this quarter. Total in H1 becoming INR 74 crores. And today, our, let's say, the project debt is now down to INR 236 crores. And our working capital borrowings at the end of the quarter are at INR 172 crores, which makes it a total debt of INR 408 crores. The INR 408 crores is debt, which I would call interest bearing debt. But this also has been helped by the fact that in the quarter we managed to achieve INR 38 crores from Karnataka government under their industrial policy where we were supposed to get interest-free loan against the earlier VAT and then after that GST.
So we got INR 38 crores interest-free loan. If you add that also, then the total debt will look like INR 446 crores. But that debt is, like I said, interest free for 10 years. And after that also, it's payable over 4 equal yearly installments. It's nearly a 14-year debt, which is coming to us interest free, so we use that. Including that will be INR 446 crores, but the debt bearing, as I said, is INR 408 crores, for those of you who would like to estimate our financing costs.
Other things we continue to do, accepting 1 more negative in this particular quarter has been that, rake shortages has been a big program. And not just rake shortages, also the railway authority, I think, to manage their shortage of rakes, they have actually been very, very, I would say, unfair to the industry by increasing their demurrage charges to 400%, 500%, if it crosses a certain number of hours. And when we started seeing that, that was beginning to hurt us, we obviously rearranged our logistics. So as a result of that, from 20% share of our volume that we moved using rakes last year has actually fallen to 15% in this quarter this year. So there's been a drop. Even in the preceding quarter, it was 19%, but this quarter it has just fallen to 15%.
The CapEx obviously has been slow. We haven't started -- beyond the waste heat recovery plant and the fly ash handling system, we've not started any major expansion plan, brownfield or anything. And we will see the need, because the demand is so low, capacity utilization is so low, there's no urgency in the company to start construction and get capacity, because we still are at rather very low capacity utilization compared to, let's say, what we need to have. So those are, I would say, other things I'll keep reporting to you. We keep redefining our customer base, channel base, brand presence. As I said, even in a poor year, poor quarter, we still invested more to create the awareness of our brand. And our ground services and delivery, I think we'll keep improving them almost every day that we work. So that in a nutshell is the complete summary of Q2 as I see it, but I'm quite conscious of the fact that no matter how much detail I share, there will still be more questions. So here I am. Thank you.
[Operator Instructions] We have the first question from the line of Abhishek Maheshwari from Sky Ridge Wealth Management proprietorship.
Sir, you've very beautifully explained what the previous quarter and H1 has been like. Sir, could you give some prelims about H2 also and how the Q3 is progressing? Because we are hearing that coal and everything is coming down and all the price rise and all.
Yes. So in terms of cost prospects, it does seem that the costs are beginning to see some softening for sure. The good news that we have is that we already have bought and the ship -- actually, we're just offloading our petcoke, we've imported 1 shipload of about 55,000 tonnes of petcoke, which is beginning to now reach our plant. And obviously, if I told you that in Q2 our cost of petcoke was above INR 2,500 per million kilocalories.
This ship that we bought, the cost is coming to us at under INR 2,300, which is still much higher than what we are traditionally used to, but INR 2,300 is a lot lower than what we've recently been incurring. More importantly, from the time we confirmed the order, till now, the prices have moved up again. So we had, I would say, we sweet slot which was available to us towards the middle of September. We took a call to book at that time rather than waiting for further fall to happen. And now in hindsight, I can tell you, it seems to be a brilliant call because we booked for us to get the lowest price of petcoke that was available. And after that, the prices have again moved up by $20, $25, $30 a ton.
So certainly, that's one softening. And I'm also hoping that as this softens -- and I'm also hearing in the last 1 week or so, the South African coal, again, due to lack of interest from European Union, lack of interest even from China and all, is beginning to soften. If that softens, then obviously domestic miners, like Singareni or Coal India will also have to, because they all work in line with what the global price standard is. So on price thing, certainly, we believe it will be softening. Our alternate fuels availability will also improve, which will again help our fuel mix towards a cheaper fuel. The big question that I think all of us still waiting for an answer to is how will the volumes be in Q3 and Q4. Unfortunately, the month of October gives no indication because October had a -- we can't make an apple-to-apple again comparison because last year, we had one major customer, which Dussehra in the month of October and Diwali was in November. So the fit on the business, which happens around [indiscernible] Diwali was split over 2 months. So today [indiscernible] that October over last year, perhaps has been subpar for most of the industries because the 2 festivals [indiscernible] will cover all of India. Otherwise, Dussehra in some parts is celebrated more than Divali in some of other parts [indiscernible] began some of the parts. But this October with all the festivals being in 1 month has slightly distorted the picture but October has been subpar in terms of volume.
Although in terms of pricing, we have seen some small improvement with some small -- some improvement over the Q2 prices certainly we've seen in October. In the month of November, we were hoping that the volumes will start picking up post Divali post-October so that [indiscernible] towards the end of October. But as of now, quite frankly, we're still waiting for the pick in the demand that is over [indiscernible] now to come in. And the only reason seems to be for some reason, the availability of labor since seems used to be, I mean earlier due to on Divali, then we can shut [indiscernible]. This time I don't know how you [indiscernible] even in the city like Delhi and I'm trying to get some small repair work and some labor availability, labor is just not there which is for us holding back the growth in demand, which should happen around this time, especially with such extensive range in our traction areas, which from nothing as there very need for cement to do complete the repair works.
Because it seems it become significant demand after very high [indiscernible So are you still waiting for the science to appear. And again, I mean, do we have some improvement in price over October, November, again. Yes, there is some improvement right now, but it's still too small for us to start talking about it. And we don't even know whether this will sustain and build up further, which it needs to gain the cost that we have. So it's a double-edged sword on the cost side. I'm sure there will be some savings.
But unless we get the opportunity to sell, number one: both volumes, and also fell at a better price. The release that we are all seeking in terms of significant improvement, I think is dependent on those 2 things.
And my second question is regarding the future expansion. So balance sheet is in a very good state right now. Then regarding your future expansion, sir, do you have the land and environmental variances already in place? Or is that an [indiscernible] that you'll have to go through before getting to financial closures?
I have the land and environmental approval for my fourth pleasant [indiscernible] that completely have, okay? There you only waiting for the demand to look better before I start putting a Board capacity, but the utilization has been low. Sitapur has all the land and environment approval process on the [indiscernible] environment approval process. So it won't take too long because it's in a middle of so many [indiscernible] through it very quickly. But Devapur, we already have. In Rajasthan, we don't even have the land.
Okay. Because land acquisition has become a very difficult process for any green field expansion [indiscernible]
No, it is difficult. But still, I'm sure we are getting on [indiscernible] green field capacity coming up. And we have to find a way. We have to be smart about how we go about it. But probably, we'll [indiscernible] there is some is still lucrative opportunity for us to pass up develop difficulty. We have to find a way.
Okay. And sir, third question, sir, what kind of savings can be brought about by [indiscernible] in value terms?
As I'm saying earlier also, if you take the ballpark cost of INR 100 crores to put up the 10-megawatt [indiscernible] plant, the payback is just about 3 years, okay? So now you can calculate to see if you are actually talking about INR 30-odd crores of savings on par coming per year from the time we start commissioning. And a part of this is we've been calculating whatever it is that at least such a type of plant, that's the savings that we're going to get because this power comes practically without any operating costs.
[Operator Instructions] We have the next question from the line of Rajesh Kumar Ravi from HDFC Securities.
I may have missed in my opening remarks, but could you share what is the CapEx time line for the -- this timeline for the [indiscernible] WHR and this [indiscernible] unit are expected to be commissioned?
I told you by the end of this financial year, both will be commissioned.
Both will be commissioned, okay. And sir, on the Tiroda, what is the progress?
Tiroda, unfortunately, we still have not been able to make progress there because the -- while the environment clearance application is under process, the one document that we need [indiscernible] is still not come through. But the good part, at least what I can share with you is that all of us have been anxious, and I've been sharing with you my own insight is that Adani now owning both Ambuja and ACC, whether they would still want us to put up a branding unit and compete with their own plants. But fortunately for us, they have once again reconfirmed their intent to have [indiscernible]. So it's a question of now, I mean how quickly can we move the environment application. So it's a bit delayed than more than what we would have liked, but it will happen.
Exact time line at the moment, I have the [indiscernible] the availability of the document based on which we'll move the environment application. I'll let you know. But right now, I have no line of sight even if I say 1 more quarter, 2 more quarters.
Agree, sir. And coming to demand and the competitive intensity, sir, with 3 companies ramping up volumes, Birla Corp, Dalmia and Shree Cement in your markets. How is that impacting you volume core the incumbent players?
Well, again, Rajesh, it's a function of -- well, is the impact there? Certainly, it is there. Because obviously, when more capacity come, every new incumbent who put up a large CapEx in an area, they will want to do something. So Dalmia has invested money, as we said, Birla Corp invested money. So we are beginning to push volumes.
The challenge that we're having is do I start matching the low pricing that they're offering in the market to defend my volumes? Or do I defend my brand for the longer term saying, I am not going to match your prices. I'm going to stick to my brand positioning and [indiscernible]. It's a toss-up.
Currently, our Board who I brief every quarter, currently, our Board is saying, no, keep staying on with your branding because in terms of -- if you see with, as I mentioned earlier, narrowing the price gap between us and the market leader because I'm not benchmarking myself with other brands, accepting the market leader.
If I start sharing every new competition comes in [indiscernible] matching the prices, my brand strategy negotiably will go in for toss. So currently, we are suffering. And that's why I mentioned that our Chittapur capacity utilization has been a lot higher than our Devapur, it's largely because the new capacities that you're talking about are coming around the older plant. We are still sort of believing that the way we have introduced branding and the power of branding to a small manufacture like our company is the right way for us to survive because if we remain the commodity forever with these kind of capacity, we'll never, never, never be able to sort of get going. We are sticking to our prices right now, not reducing them at all. When competition starts selling product at INR 20, INR 25 for that lower than [ yours ], I'll rather nor sell.
Okay. It's a good strategy rather.
Yes. In the short term, it will cost [indiscernible]
Correct. Correct.
And that [indiscernible] we need to have -- and let's see how it all pans out. But currently, you're right, we're there. And mind you, the new brands which are coming up, the brands that you named and I have named, they're largely hitting the B2B market with very good prices, right? So which is not a game that we, at Orient Cement, would want to play anymore. We've done that in the past. We don't want to do it anymore.
Sir, would you share what was the clinker production in 1H?
I don't have the number in front of me. Can I share that separately? But like I told you, [indiscernible] more or less at par in terms of volumes of Cement. And clinker, because of the adverse product mix towards OPC, obviously, clinker production for us will be in the [indiscernible] than when the sales reflect, right, because the clinker is more in OPC. But that's not too big a difference between that number.
Okay. And sir, the cost metrics, if I look at quarter-on-quarter on a per kilo [indiscernible], could you share how much was the cost in June quarter per kilo [indiscernible]? Blended total would be more...
I'm just trying to look for my paper. My memory not that sharp. I'm an old man. The -- in the previous quarter -- blended is not in front of me right now. I have to -- so H1 is 2 3 5 8, that I have.
And Q2 you said was how much?
Q2, I had told you the blended [indiscernible] 2 3 7 9.
Sorry, 2 7...
Last year, I gave you [indiscernible] [ 13 36 ].
Q2 -- sorry, I couldn't get your numbers. .
2 3 7 9.
2 3 7 9.
23 79.
So H1 then -- and H1 is also 2 3 5 8, right?
Yes.
So your fuel cost is broadly stable quarter-on-quarter. Is that understanding right?
Yes, yes, yes.
Okay. And in this quarter, you are looking at some...
It's about 1% more.
Yes, this is okay. And given that players are reporting 10%, 20% surge in fuel cost quarter-on-quarter.
But this is the cost. Don't forget that a mix has [ staged ] for me, right? Because I've used more [indiscernible] capacity using more pet coke and things -- and more OPC has been sold than normal. Some impact will be -- these are very small [ division ]. But broadly, you're right. 2 3 7 9 for the Q2 and 2 3 5 8 for H1.
And there would be slight moderation, which you are expecting for Q3 from these numbers.
Yes. And I told you the new pet coke, which has just about started arriving, will be 2,300. Against the pet coke -- only pet coke was [ 2,566 ] in Q2. It will be at least a 10%-plus saving.
And sir, with 1.5 months almost complete, how has been the pricing in your markets quarter-on-quarter?
Again, we come back to the same questions. I said in October, we gained something over last quarter. In November also, we gained some small. I mean I'm talking with just a few rupees for that. In November also -- so October had a slight gain over last quarter. In November, further slight gain as of in the first few days in the month of November also.
So from a quarter-to-quarter, do you expect that realization should improve?
It should. They must. Otherwise [indiscernible].
No. I agree. They much, obviously. But so far, have you seen any improvement quarter-on-quarter if prices were to stay where they are currently?
I've just answered that to you, Rajesh. I don't know how much detail can we share on one call where lots of people are waiting for the questions. I have already said there is some improvement in October over last quarter. In November, there's further improvement. [indiscernible]
[Operator Instructions] We have the next question from the line of Uttam Srimal from Axis Securities Limited.
Sir, can you please tell me what has been our blended ratio this quarter? And premium cement sale, [indiscernible]?
In this quarter, yes, I forgot to give you the number. 15%. That's the highest ever.
That is of a premium cement?
StrongCrete. On the StrongCrete.
On the StrongCrete. And what has been total [indiscernible] total premium cement and out of [indiscernible] sale?
The brand -- the other brand, we all launched very, very early in this month. It was not there last month.
Okay. And sir, what has been...
15% cement sales.
Okay. And sir, what has been a blended ratio this quarter?
Lending?
Blended ratio.
I mean [indiscernible] how many details every time somebody will ask me a question, which -- for which I don't have [indiscernible]. I'll get back to you.
Okay, sir. Okay. And sir, what has been...
Blending ratios are a function of your OPC mix, right? If I've sold more OPC, obviously, my blending ratio has worsened this quarter. It's a very simple math. Exact number I'm not giving you, but I gave you the number that my -- actually, my OPC from about 39% year-on-year. It's gone up to 45%. That number I've given you. OPC, unblended, right?
PPC, which was [ 61% ] last year, is down to 55%, which has the blending. So basically, that ratio has worsened, although I don't have the numbers right now.
Okay, okay. And sir, what kind of CapEx we are looking for in FY 2023 and FY '24 because, earlier, you had guided for INR 500 crores to INR 550 crores in FY '23 and some INR 900 crores to INR 1,000 crores in FY '24. So is there any change in that CapEx amount?
The fact that in this particular year, we've not been able to start any work at all. So obviously, in this year, we would perhaps be spending a lot less than what we are expecting. But given the fact that we also want to be getting on with our expansion plan, it will get [indiscernible]. So my own guess is at least FY '23, perhaps we would like to spend about INR 850 crores to stay on track with our growth ambitions.
In FY '24.
FY '23. Sorry, FY '24, FY '24. Sorry.
Okay, okay. And sir, can you give the figure for rail and road mix?
I've just given 15% rail high. I said, because of all the reasons of rate availability [indiscernible], railway [ dispatch ] is 15% in the quarter, down from 20% in the same quarter last year.
[Operator Instructions] We have the next question from the line of Dhiral from PhillipCapital.
So for the Q2, what was the fuel mix blended overall?
I know what will you do with it, okay? Because I thought because the cost that we reported to you [indiscernible] fuel mix. Okay. Let me again look at the numbers that are in front of me. [indiscernible] So for Q2, the pet coke has become as high as 58% because more capacity is [indiscernible]. So that's 58%. Domestic coal has actually fallen to 28%, which we used to have between [ 35%, 40% ]. That's 28% in Q2. And as I mentioned, imported coal also, usage has been a lot higher because the good quality domestic coal, we just fully are hands on. So I think 5%, 6% of imported coal would be -- that's the -- mix balance will be here for all put together, right?
Okay. And sir, how many days of inventory we are holding right now?
I've just said, we bought a shipload of coal, which for us [indiscernible] [ nearly 3 ] months [indiscernible]. And we are holding in the sense that we've [indiscernible] to our plant. At Devapur, we have -- we are shipping right now inventories [indiscernible]. So the mines are closed [indiscernible] the pick up from there and in the [indiscernible]. We don't [indiscernible].
Okay. And sir, any volume growth guidance for FY '23?
As your guess is as well [indiscernible] the market starts showing some indication. I can throw any number, but there's no basis that I have. I would -- I mean I can only tell you my ambition, but we are -- as I mentioned, despite the -- all the customers getting [indiscernible], we are still not seeing the demand traction, which we expect [indiscernible] achieve by this time by early November. We thought October has not been [indiscernible] hopefully should start showing some traction because [indiscernible], but we haven't seen that growth as of now. So until we actually start seeing some trends, very difficult to have it, I guess.
[Operator Instructions] We have the next question from the line of [ Bajrang Kumar Bafna ] from [ Sunidhi Securities ].
Sir, can you give us some sense on the Devapur expansion plan? And do we expect this to get completed? You indicated something about Tiroda, but can you guide something on the Devapur also [indiscernible]?
Now -- fair enough. No. I think -- let me clarify because you obviously don't have the information that earlier I was sharing. Devapur expansion is linked to Tiroda branding unit. Unless I have the branding unit, I already have enough clinker at Devapur to keep feeding those markets, right? So until Tiroda construction actually starts, starting Devapur too early would only be locking of the capital with any -- without any prospect of utilizing the capacity, okay? So they're entering Tiroda and Devapur [indiscernible]. Tiroda has to start first and then immediately because Devapur have -- as I said, have land [indiscernible] everything. I can start putting it in 1 year's time. I'll have the clinker ready. But if I don't have a branding unit ready, what will I do with the clinker? So I'm just being same -- just being practical saying unless [indiscernible] to dispose of the clinker on a new mining unit, it may not help us by putting a line floor in Devapur.
Got it. And some sense on the Rajasthan side in terms of regulatory agencies and how do we see that expansion plan goes in the future? .
It is -- I think even to start the construction, there will take about 3 years, quite honestly.
Okay. And sir, is there a possibility that until we start the construction in the Rajasthan site, the limestone that is there with us, can we expect some sales from there, some sort of outright sale? Is it possible [indiscernible]?
I would never do that. No.
We have the next question from the line of [indiscernible], an investor.
Sir, just regarding the demand scenario of what you have printed during your opening remarks, that in your catchment area, so you see lower demand. And you are, in fact, craving for more the government [ opposite ] to come in to [indiscernible] the demand effects that we are currently going on. So in that [indiscernible] I want to understand why we have so much perspective as the retail sales and not happening into [indiscernible], at least to utilize more capacities to enter these markets where the newcomers are coming into our area. So at least to have you [indiscernible], because the [indiscernible], we see improvement in the utilization happening in the Devapur. We do not think of setting up the grinding unit at the Tiroda. And so it is quite linking to this.
So just to understand, what is -- why we are so much protective of the segments [indiscernible] segment? Why we are not opening the [indiscernible]?
[indiscernible] to operate my proportion already is 45% from 39%, as I mentioned. Only thing is I'm not wanting to sell my product as cheap as other manufacturers are selling. I never said I'm not being [indiscernible] [ 30% ] of my total volume this quarter has been [indiscernible] selling. But I'm choosing a customer carefully where my prices are good. It does not hurt my brand. There are multiple things that we have to consider. Only volumes, if I want to do, I will never have a long-term strategy to improve from where we are.
[indiscernible] that I'm not selling [indiscernible], providing the prices or the price that I want.
So going forward, if you say we will be looking for more [indiscernible], then obviously, we'll have to sell more of the OPC rather than PPC. So any other [indiscernible] specialized events? So in this case, then our [ completion ] would be to sell more of the OPC [indiscernible] area rather than the [indiscernible] areas. So if you say the realty sector goes for sort of some kind of slowdown because of the interested scenario because this is quite apparent. So that now -- unless we attained capacity utilization of at least 75% to 80% at Devapur, we will not think of expanding the [indiscernible] Tiroda that is linking [indiscernible]. So what is the -- why we cannot think of?
I think there is some confusion in your mind. I never said Tiroda will hold back. I said Tiroda will [indiscernible] Devapur, right? That's a different strategy. Strategy about not trying to sell too cheap around Devapur where some new competition are trying to gain market share in B2B segment [indiscernible]. That's where I'm saying, given my costs that we've had, even as it is our EBITDA is barely INR 300, would you be happy if I sold 20% more volume and incur their loss? Would you be happy with that as a shareholder? You have to answer that question because if I -- and in the previous few quarters, you've seen that more the previous quarter that is all visible. But previous quarter, [indiscernible] sold a lot more volume, and they declared a lot more, let's say, decline in EBITDA and decline in profitability. We want to sell volumes, but we don't want to buy [indiscernible] profitability. It's a slightly different approach.
I think there is some confusion in your mind, which I'm not able to clarify.
Sir, what is the utilization level we are targeting at least for FY '24, FY '23 [indiscernible] nearly similar to last year, what I see around of [ 66% ]. So is there any chance to improve the utilization -- overall utilization of [indiscernible] Devapur and [indiscernible] put together?
Yes, we are very much trying our best to do that without sacrificing [indiscernible]. Please, please, please understand the strategy that we are talking about. I want to sell the volume as possible. We would want to sell 80%, 90% of my capacity and not at the cost of profitability. That's the differentiation I'm making.
But more or less [indiscernible] utilize, we will be able to get [indiscernible] recovery [indiscernible] that is also there.
[indiscernible] recovery is linked to a different investment. I need payback on that investment also. I can't invest INR 100 crores and reduce the cost and pass it on to my B2B customers. Then who will recover INR 100 crores cost? Not coming [indiscernible]. Please understand, [ INR 100 crores ] of investment and all the reduction I'll pass on to the customers, then what does the shareholders do to me?
Please know in the interim 1 to 2 years, we may sacrifice for the sake of obtaining -- utilizing [indiscernible] say 80% or so, so that we can think of -- including the situation or economically. So then...
Yours is not a question. Yours is suggestion to me. I'd take note of that suggestion. [indiscernible]
[indiscernible] because we are actually going so much digital [indiscernible] have gone into [indiscernible] and all. So my request to at least give a detailed presentation after each quarterly result for highlighting all the KPIs. That would be nice, sir.
How many hours do I need to spend on doing this call then, please? If you said detailed presentation? [indiscernible] It takes me 3 hours [indiscernible] the presentation.
I'm not [indiscernible]. I'm talking a detailed presentation. We're not highlighting the KPIs of the company. So that would be...
I don't need to give you a detailed presentation. All I can tell you is after that, you won't ask for it. In the company today, if I just give you how -- indicated KPIs so that your curiosity is satisfied, [indiscernible] detailed presentation here. But all I can tell you is that my total power consumption and tell me another company in the industry does that my power consumption [indiscernible] cement is at [ about 63 ]. My heat consumption is about 6 80. What better can we do than this?
So I'm just taking what [indiscernible] in the industry, the peers are doing. [indiscernible]
In the investor's call, I'm not going to lay out all that I do from my competitor's [indiscernible]. I will not do it. I can give you the number and the outcome, but how I do it, I'm not going to tell. Enough competitors who attend this call. I've given you the outcome. As a shareholder, you're entitled to know the outcome. I'm telling you my power consumption and heat consumption amongst the absolute best in the industry. I've given you the number, [ 63 ], 6 80. Try to find this too many companies who do that. How I do it, I'm not going to make an explanation or a presentation on that. I'm very clear. I do it with a huge amount of hard work and innovation and all kinds of things and certainly to lay out in an investor call for [indiscernible] listen and go and do it. Why would I do it? [indiscernible]
Thank you for your response, sir. Ladies and gentlemen, that was the last question, and we will now close the question queue. I would like to hand it back to the management for closing comments. Thank you.
Thank you, everyone. I hope I've provided enough information. I can never provide [indiscernible] I'm providing all the information that all of your [indiscernible] might have as to -- if I'm doing S/4 HANA, how does it benefit, where did this -- those details obviously are not fair for me to share particularly, especially on these calls. But anything, which is -- which enables you to assess the quality of our operations, the quality of our, let's say, the decisions through the outcomes that we are presenting, we are more than happy. I hope I provided you all the information.
In case there is something missing, do reach out to my colleague, Manish Dua -- sorry, Manish [indiscernible], who is also on this call. Write to us, and if the information can be made public, we will share that with you and put it up on our website. Is that fair?
Thank you, sir.
Thank you very much once again for your time.
Yes. Thank you.
Thank you, members of the management. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.