Heidelberg Cement Q3FY18 Concall Summary

Heidelberg Cement.png

Financial Performance

HCIL Q3FY18 Financial Highlights.png
  • Increase in EBITDA by 73% on a YoY basis
  • At present EBITDA stands at Rs. 680 per tonne, i.e., almost 49% increase
  • Major benefit came out of GST
  • Almost Rs. 32 crore PAT
  • Depreciation as on 31st December is Rs. 500 crores

 Volume and Price Development

Heidelberg Cement Q3FY18 Volume and Price Development.png
  •  Increase in volume by 16.4% on an YoY basis
  • Increase of 7% in terms of gross realization per tonne on a YoY basis
  • 85% capacity utilization
  • Trade and non-trade mix is 80:20
  • Price range will remain the same but there will be some increases in February and March
  • Price increase of about Rs. 200 per tonne till now from the December quarter

Cost Development

Heidelberg cement Q3FY18 cost development.png
  • Marginal increase of 5% in cost on a QoQ basis
  • Costs increased by 12.1% in a YoY basis mainly because of increase in fuel related costs
  • Costs excluding logistics is less by about 1.6% on a YoY basis
  • Rail and Road mix is about 50:50
  • Lead distance continues to remain below 400 kilometers
  • Power cost id Rs. 6.25 per unit
  • Pet coke price for current quarter is Rs. 9,500 per tonne
  • Fuel mix is 70% pet coke and 30% domestic coal
  • Stabilization of WHR plant has allowed to operate on maximum loa
  • 20% share of the WHR in total power consumption
  • Improvements and tweaking on the equipment, plant and machinery front
  • Resolved the demand charges on the grid which has given benefits on account of lower power cost in the year 2017
  • 50 paisa per unit power generation cost savings from the WHR plant


  • Rs. 60 crores of interest free loan by the Uttar Pradesh government
  • Net debt is Rs. 500 crores
  • Three tranches of non-interest bearing loan from UP Government which amounts for Rs.170 crores
  • Net interest rate on interest-bearing debt will be around 10%
  • This quarter they have made one repayment of one tranche of $10 million
  • Going forward the run rate will be slightly higher than Rs. 12 crores


  • Sand and aggregate issue resolved in Uttar Pradesh
  • Some movement in the affordable housing in the rural market as money put in by Government
  • In the Tamil Nadu case, the Supreme Court has stayed the order of High Court saying that they cannot ban the limestone or sand
  • Capacity of close to 88% with a headroom for additional 7% by tweaking and optimization
  • 5% growth rate expected from market
  • 12% to 14% market growth in the last quarter
  • UltaTech capacity of 3 million tonnes to come up in Dhar in two to three years
  • A little pressure in the market due to UltraTech’s volume
  • Non-availability of rakes in the railway paving opportunity for the domestic players to sell a little better volume
  • But the evacuation of material from the plant to long distances is a problem because the wagons are not available adequately
  • Growth has picked up post sand mining resolution in UP because of higher pickup from UP
  • Momentum is picking in the low cost housing projects and the private projects of IHB
  • Road projects are also going on which requires OPC
  • A category pricing premium in the central India in most of the markets and B+ in some
  • For the nine months period the growth has been almost about 4% on year-on-year basis
  • For the nine months period the growth has been almost about 4% on year-on-year basis
  • Industry capacity utilization of about 73% to 74% in the central region
  • As of now Holcim is the only stand out brand in terms of premium brand in Uttar Pradesh