Thank you, Anushka. Good evening, everyone.

On behalf of ICICI Securities, I welcome you all to the Q1 FY '27 earnings call of Star Cement Limited. From the management, we have with us MD and CEO Mr.

Tushar Bhajanka and the company CFO Mr. Manoj Agarwal.

Without any further ado, I hand over the floor to the management for their opening comments. Over to you, sir.

Hi. Good afternoon, everyone.

My name is Tushar Bhajanka, and I'm the MD of Star Cement. I welcome you all to the conference call of FY '27 quarter one.

I would like our CFO, Mr. Manoj Agarwal, to give his remarks regarding the numbers, and then we can start with the Q&A.

Thank you. Yeah.

Thank you, Tushar. Hi, friend.

Very good afternoon. I, on behalf of Star Cement, welcome you all to our concall for discussing our numbers of Q1 FY '27.

I would like to clarify that we are discussing on the historical numbers, and there is no invitation to invest. Having said that, now I will just take you through the Q1 numbers.

Starting from clinker production during the quarter ended June '26, we have produced 9.10 lakh ton of clinker as against 8.90 lakh ton same quarter last year. Far as cement production is concerned, we have produced 13.08 lakh this quarter as against 12.31 lakh ton same quarter last year.

Now I will take you through the sales volume. During the quarter, we have sold 13.02 lakh ton of cement and 0.52 lakh ton of clinker as against 12.22 lakh ton of cement and 0.74 lakh ton of clinker same quarter last year.

This is as far as cement and clinker sale is concerned. As far as geographical distribution of cement is concerned, in Northeast, we have sold around 8.71 lakh ton as against 8.67 lakh ton during same quarter last year.

As far as outside Northeast is concerned, we have sold 4.31 lakh ton of cement this quarter as against 3.55 lakh ton same quarter last year. In terms of blend mix, it is almost 15% of OPC and the rest is PPC.

These are the quantity number of this quarter. Now I will take you through the financial.

The total revenue figure this quarter is around ₹902 crore as against ₹847 crore same period last year. As far as EBITDA figure is concerned, this quarter we have done an EBITDA of around ₹203 crore as against ₹230 crore last year.

This is mainly on account of reduced subsidy, increase in packing material cost, and also shut down expenses which we have taken in one of our kiln. Profit after tax is ₹74 crore in this quarter as against ₹98 crore last year.

On per ton EBITDA front, it is ₹1,497 during this quarter as against ₹1,774 per ton same quarter last year. This is what our quarterly numbers are.

Now I request all of you, if you have any query, you can ask the same and I will request Navin to moderate the query wherever it requires. Thank you.

Thank you, sir. Just a couple of data points before question: trade share, premium share, CC ratio, lead distance, and kcal for this quarter.

I think the premium sales is about 15.9% of the overall sales. The lead distance was about 210.

The clinker factor was about 66.5%. What was the fourth parameter that you had asked?

Trade share.

Trade share was about 80%.

Okay. Kcal for this quarter?

It was about 1.55.

1.55, oh, significant jumping back. Now, two things.

First, on the volume, this quarter slightly on the lower side, we were looking at 10-12% cement volume growth and a similar number of the clinker for entire full year versus FY '26. Any change in there?

Can we now see that from Q2 onwards, order volume growth would be slightly better?

In Q2, as we all know that Assam is completely flooded at the moment, I don't see much of a respite in terms of volume in Q2. I think from Q3, Q4 onwards, I think we can see hopefully a double-digit growth.

On the overall year, I think we expect to probably revise our numbers a bit from 11% to 12% to about 8%

to 9%. Understood, sir.

What for the clinker sale for the full year would be the similar of what we have done in the FY '26?

I think the clinker sale in FY '27 would probably be stagnant or may degrow by about 5% to 10% compared to FY '26, because I think the clinker is also coming from outside now in Northeast. It may be a case that there may be a degrowth in the sales of clinker.

Now on the costing front, given the fuel cost has sharply jumped up to 1.55 from 1.24 in Q4, overall this, and even that we heard that some packing bag cost has also recently gone up. Overall, and how do we see the cost moving up in Q2?

Then at the same time, the prices are still holding on versus June average? In

the fuel cost, in FY '26 quarter four was about 1.33, which has gone up to 1.55. We expect in Q2 onwards the cost should come down to about 1.45.

Hopefully in Q3 and Q4, we can hopefully reduce the cost further on fuel. The PP bag prices are completely related to the international turmoil and war situation which is going on, and the raffia prices are up.

That, I think, really is hard to predict of how will it play out. On the prices, if I compare, I think the prices are broadly stable in Northeast as well as in outside Northeast markets of Bihar and West Bengal, even in the quarter two.

Okay. Broadly kind of a ₹1,500 plus kind of EBITDA per ton that we were previously looking at for at least two, three years once our Rajasthan plant comes in.

That we are still seeing that that is kind of still manageable, given whatever the new capacity will come up in the Northeast. Still it will have a time, we should be having the similar kind of a ₹1,500 kind of EBITDA per ton can be doable?

Yeah. Over the entire year, yes, it can be doable.

I think ₹1,500, ₹1,600 is still a good estimate. Only for quarter two, because the shutdown cost also gets added in the cost in quarter two, and also because in Northeast it rains more, fixed cost are getting absorbed by lower volumes.

It may be about ₹1,400 for quarter two, but I think we'll catch up in quarter three and four then.

Okay. Sir.

Thank you, sir. All the best.

Thank you.

Thank you so much for taking my question. Good set of numbers.

I just wanted to understand how does the pricing and demand scenario looks like in the second quarter. What should we expect, given the kind of situation on the APC, and especially roads and highways, do you see demand slowing down in the third or fourth quarter, or it's likely to remain stable in the second half as well?

I think that because of the lack of demand in the first two quarters, like quarter one, quarter two, and because of the floods which have completely engulfed Northeast at the moment, I think that when the floods subside, which is basically quarters three and four, I think there should be some pent-up demand which gets released in those two quarters in the second half of the year. I would expect a bit higher than usual growth in those two quarters.

Of course, the demand in the first two quarters have been quite mute.

Yes, sir. Sorry, I missed you.

Hello?

Yeah. I was just saying that in quarter second half of the quarter, sorry, of the year, we would probably see a pick up because of the pent-up demand.

Right now there's, heavy rain and flooding going on in the entire Northeast. Of course, the demand for cement is quite mute, but as soon as the situation gets better, I'm sure there will be a pickup in the demand as well.

When should we expect the Rajasthan plant to come on stream? By when do you think it'll be, step-up phases, maybe start with 30% utilization level?

Should we expect in FY '28 end?

Basically, we have now gotten the plant land for the clinker and the integrated grinding unit plant. We have applied for the public hearing and for the EC.

By, I think, about September end or October, we should be getting our EC for the plant. Between mid-October to November is when we plan to start our work on ground on the Rajasthan project.

Effectively 26 months for the plant to come up or 22?

It would be about 18 to 20 months from November onwards, I guess. It means about quarter one of FY '29 or quarter four of FY '28.

Okay. Great.

Thank you so much. That's it.

Hi team. Good evening.

Am I audible?

Yes.

Yeah. My first question pertains to demand in the Northeast.

Q1 prices, I understand, we've seen a decline in the Northeast sales. What do we attribute that to?

It's all because of elections which impacted sales in month of April, or also because of the rising competition from Dalmia's capacity ramp-up in the same market?

No, I think it's not because of the competition. I think because in Q1, the best month is of course the April, because from May and June, in Northeast monsoon starts playing a role.

In April, we had the elections in Assam, which is almost 60-70% of the Northeast market. I think that is why I think there is a bit of a dip.

I don't think it's because of the competition and I don't think we've lost any market share in Northeast compared to last quarter or same quarter last year.

Okay. On a full-year basis, what are your estimation in terms of growth in the Northeast sales on a year-on-year basis?

The growth rate in Northeast on year-on-year basis,

just a sec. Rajesh, you're talking about market growth or our growth?

Yeah. Star's growth and both for industry as well as for market FY '27.

Industry is 2%, whereas Northeast our growth is more or less flat or maybe minor growth, sir.

For FY '27, you are saying industry will grow at 2%?

For us, I think the growth was about 0.4% in Northeast, and I think the industry may have grown by about 1% or 1.5%. It was flattish.

No,

for full year, what is the expectations you're looking at?

I think we still are hopeful that, we can catch up in the quarter four and quarter three and quarter four. I think for the industry, I would say that the growth rate should be about 7%.

For us, I hope that we can do about 8% to 9% in Northeast. Okay.

Fuel cost, you mentioned 1.55 was for Q1 or in Q2?

No, 1.55 is the estimate for Q1. I think in Q2, we should bring it down to probably about 1.45.

Yeah.

Understood. Understood.

Sir. I'll come back.

Lastly, on this North project, are equipment orderings already in place, or after the EC is received?

We have just completed the purchase of our plant land. Our public hearing is end of the month in August.

Our EC should come in first week of October. We have already started calling vendors for quotations, and I think we should be able to lock those by I think end of August or start of September, and then we'll start with the engineering work.

Understood. Yeah.

That's all from my end. Thank you.

Thank you.

Yeah. Good evening, sir, and thank you for the opportunity.

My first question was Assam comprises what percentage of our sales volume? Also if you could throw some color on volumes if at all we would have done in Q2 or at least in the month of July.

To just ask, is there a risk of a negative YoY growth because of the flood situation? In quarter sorry,

in quarter two in July, of course, the volume degrowth was about 12%. The reason was because July was completely flooded in Assam and Assam was completely shut down in in in many areas.

I think we are seeing a marginal growth in August. Last year in September, there was GST revision from 28% to 18%, last year September numbers for us were very bad.

This year September, we expect to be without much of floods and without any regulatory changes. I think whatever volume degrowth we have done in July, we hope to catch up in September month.

Understood, sir. My second question then was about grinding units.

Is there a plan that we see some grinding units proposed or planned in West Bengal with the change in government or some industrial policy around it?

We are actually waiting. I think about 15th of August is when the West Bengal is supposed to come up with their industrial policy.

Looking at the industrial policy and looking at the potential benefits that one can accrue, I think we will take a call. Of course, the capex in case the benefits are favorable, I think the capex in West Bengal, especially in the Siliguri plant, may make sense, because it would be a brownfield expansion and will cost much lesser in terms of capex and will also give us benefit of SGST in our existing sales.

Is there a possibility, sir, that we would contemplate or compare it between a Bihar blending unit and West Bengal for us to take a call if the industrial policy is out or as and when whenever we get clarity, we would be able to decide based on that?

I think what we are in the short run at least comparing is West Bengal and Bihar as alternatives that we can probably invest in. If there is a favorable policy in West Bengal, then we may have to reconsider our capex in Bihar and probably may redirect it to West Bengal.

That, I think, we can probably have a longer discussion after the policy is out in the next investor call. I think we'll have more clarity.

Understood, sir.

Regarding the North region, I wanted to understand if there is clarity on the incentives that we will likely or potentially get or what is the status on that front, sir?

Yes, I think we have already gotten the standard approved package in Rajasthan for the Nimboth clinker plant that we plan to set up. I think I will share a slide of those benefits in the next presentation.

It involves a degree of capital subsidy along with SGST benefits. The exact quantum is not in front of me at the moment, but I will just add it to the slides so that everyone can see it.

Sure, sir. Thank you.

Thank you so much, sir.

Thank you.

Sir, just to continuing that, if the West Bengal policy is favorable and if we find fit, we will then entirely 2 million ton grinding that we were looking at Begusarai, Bihar, this entire 2 million ton we will be shifting to West Bengal or it could be a 1 million ton in West Bengal and 1 million ton in Bihar?

We will get back with the details. I do not know if what the policy will be.

I hope it is favorable. I think it may make sense for us to put a plant in West Bengal.

I don't think it makes sense to put 1 million in West Bengal and 1 million in Bihar, because the overall capex of a grinding unit along with a railway siding in a greenfield project sometimes may need a economies which may not come with a 1 million ton grinding unit. That, I think, we'll have to redo the workings depending on the demand scenario.

Right now the demand in West Bengal has been quite good. I think if the demand continues like that, then we'll have to in the next two, three years plan to commission either one of them, for which we'll get back to you in the next call after we have analyzed the industrial policy of West Bengal as well.

In the existing grinding unit in Siliguri, we already have plant land enough for another grinding unit. We also have railway siding in Siliguri, and we have planned to put a wagon tippler for the movement of clinker as well as for the movement of fly ash.

I think the economics of Siliguri grinding unit will be changing, and the capex decision, we'll let you know in the next call.

Okay. Got it.

Understood. In terms of now, I understand this is pending, but broadly in Q1, how much capex we have done?

For full year FY '27, '28, how much capex are we looking at? Out of that, particularly the Nimboth, how much we want to spend this year and next year?

This quarter we have spent around ₹93-odd crore. Our the our the planning what we have given, ₹500 crore for this quarter that this year, that will continue.

That will still holding on the same.

Okay. Next year FY '28?

That same thing. There is no change as such right now.

So, ₹1,500-odd crore kind of a number we should be looking at in FY '28?

Yeah.

Okay. This would be largely for the Nimboth.

There overall capex what we previously talked about ₹2,400 crore, ₹2,500, so that remains the same.

I think in that, the capex that we have planned for Rajasthan is about 3 million tons of grinding and 3.3 million tons of clinker about, but that we are still finalizing the exact specs of the machine, and 2 million tons in Jhajjar. Overall capex of this thing is about ₹2,600 to ₹2,700 crore is that what we are expecting.

I think we are focusing in the next two years to primarily get this capex going in North. That will be the primary focus of all the capex that we do.

Because of the latest presentation what we have, there we were saying that ₹2,250 crore for integrated Nimboth and ₹650-odd crore for Haryana, so that is close to ₹2,900-odd crore that we were looking at.

I'm also talking about the combined amount. I think it may be about 2,700.

We're still doing the math. It may be ₹100, ₹200 crore up or down.

That I think, once we start finalizing the machinery, we will be able to give clarity in our presentation as well, and I think we'll be able to take a definite budget for the expansion. I think it will be about 2,700-odd.

With the GST, it may be about 2,900. I think the difference in numbers is because the GST, which I may not be including in my number, but the presentation includes.

Got it. For that QIP previously which we were looking at ₹1,500-odd crore, there anything that we are now looking at?

Once we have 1.5 times net debt-to-EBITDA, then we will go for it, or anything change in there?

Right now, because we're only focusing on Rajasthan and North for the next capex for the next two years, and I think if our accruals are healthy, then we should be able to manage it with about 1.5, 1.6 times net debt-to-EBITDA. We are not at the moment actively thinking of QIP.

We will do it at opportune time in case there's opportunities available for which we need to further raise money, that may be organic or inorganic.

Got it. This year for full year in terms of incentive would be ₹130, ₹140-odd crore?

Ideally it should have been, but there is a restriction that the Assam government has come up where they are dividing the overall subsidy benefits across the number of years that the subsidy is valid for. What I expect for this year is not about 145, but about 115 crore.

Got it. This quarter, what was the green share and by this year-end, where we can be reaching?

Green share for this quarter was about 30%. This of course includes WHRS as well.

True.

We are planning to introduce solar as well or some group captive opportunities. That we're evaluating.

I think in quarter three or quarter four, we will also share the details of those contracts.

Okay. Lastly, the fuel mix for Q1 would be in terms of the FSA, AFR, and biomass would be how much?

Fuel mix for FSA would be about 42 40 45% from FSA. The other source was spot contract.

What has happened in quarter one is that all the coal has been directed to the power plant because I think there was a surge of power requirement. All the Coal India coal was diverted.

What we did not have that many rakes come in of FSA, and we had to focus on buying spot contract of coal, which are, of course, at a higher price, and that is why the fuel cost has gone up. Now I think that we will be able to get few rakes from FSA more frequently, and that is why we expect the fuel cost to go down to 1.45.

Okay. I got it.

Still you said the FSA was 45% in terms of the fuel mix in Q1. What was the balance?

The balance about 30% was spot contract of coal, which is basically we're buying off the market, right? Then there was a component of biomass.

I think this was the broad fuel mix.

Okay. Got it, sir.

Thank you.

Thank you.

Good evening, sir. I have more like an industry question.

Can you discuss the cement demand for FY '26 or maybe estimated FY '27, clinker capacity, and grinding capacity for '27, and how do you look at it somewhere in three years?

In FY '27, I do not see any clinker capacity come in. The demand seems to be a bit muted in the first two quarters, primarily because there was election and now there's like tremendous amount of flood.

In the last two quarters, matlab the latter quarters, I expect the demand to improve. In terms of capacity additions, I think in the next three years, I would expect capacity addition of about 1 million each of two players.

Besides that, I am not aware on ground of any other capacity addition happening.

Okay. Clinker capacity you're mentioning, 1 million each of clinker and similar grinding, right?

Proportionately I think grinding.

Okay. What will be the maybe FY '26 ending clinker and grinding capacity of the region?

That number I'll have to get back to you on. I don't have it offhand like that, but I think it should be about 15.5 to 16 million.

That should be my estimate of the clinker capacity in Northeast currently.

Do you have estimate for grinding capacity as well?

Grinding capacity would be about 23 million, 23 to 24 million.

Besides yourself and Dalmia Bharat, like other smaller players have they been able to expand or like most of expansion is from the top two players in the region in past three years?

Besides us and Dalmia, we are the two people who are majorly expanded. I think other companies are doing brownfield expansions and they're trying to debottleneck of about 0.5, 0.6 million.

I don't think there's anything significantly that they're expanding at the moment.

Sure, sir. This were my questions.

Thank you.

Thank you.

Yeah. Thank you for the opportunity.

Good evening, team. Sir, I have only one question.

How have been the prices behaved in the past 1 and 1/2 months, basically post-1Q exit, given the flood situation in Assam? If you can give color on this.

Yeah. I think the prices are broadly been flat.

From Q1 to now, I think there's almost ₹2, ₹3 increase in the price, but it has broadly been flat, because the demand has gone, I don't think there's any reduction in the price, but there's a cost pressure, we had to maintain the price, and that's why the price is a bit flat. I think ideally because of the cost pressures, I think once the demand opens up, I think there will be a requirement to increase the prices a bit to absorb the cost.

This flat prices is in both of your markets, in Northeast as well as in outside Northeast? Is this assumption correct?

I think in Bihar the prices are a bit higher by about ₹10, but in West Bengal and in Northeast, the prices are up by about only ₹3.

Okay. Sir, any number if you can give about what could be the cost per ton reduction in quarter two or you are saying it may be flat?

If any indication you can give on the operation cost per ton?

Operational cost, besides the fuel cost which may go down to about 1.45, I don't see a lot of cost going down, because the bag prices are also high at the moment. I don't see that also going down.

Depends on the war and the crude oil prices and raffia prices. That is beyond our control.

I think, from a longer horizon, we are introducing a few things which should help us in reducing our cost. I think by October, November, we will get a railway siding in Silchar, and we'll start operationalizing our Silchar capacities fully.

I think there will be a lot of operational logistics saving that we may be able to accrue because of that, because that will help us in serving the south Assam market more effectively along with other states in Northeast. We are also planning in the next five, six months to introduce EVs in some typical routes.

I think that would also lead to significant savings. We're planning to introduce wagon tipplers in Siliguri, which will reduce this clinker transportation cost and fly ash cost to Siliguri significantly.

We expect about ₹150 savings from the sales that we make from Siliguri after we introduce wagon tippler there. I think just few cost initiatives that we're taking, which will materialize in the next three to six months basically.

Harsh, in addition to that, because there are some one-off in this payment of donation and some incentive, that will also reduce in the next quarter. By that way, ₹60 to ₹70 saving will be there as compared to this quarter.

Got it. Sir, last question from my side.

Are we staying at our guidance of ₹150 crore of non-cement revenues this year or there is some downside risk on that? I'm

sorry, can you repeat that again?

Sir, my question is, in the last call, we gave a guidance of ₹150 crore revenue guidance for the non-cement part business. Is this guidance intact, or is there is some downside risk to this number?

No, so that 150 was not that 150 was not actually the EBITDA increase, that was the revenue increase that we had suggested, that we will we will do about 150 this year by our building solutions division, right, by AAC and RMC. That is actually a revenue estimate, that's not an EBITDA estimate.

Sir,

I said that's revenue estimate only. I said about revenue.

Yeah. That revenue estimate, I think again, because the demands have been a bit sluggish, we are not right now at the ARR where we'll touch 150, but we are increasing our RMC plants, we are focusing on AAC, and I think we should be able to reach that ballpark figure.

At least on an ARR basis, we should be able to reach that 150 number by the quarter four.

Got it. Thank you.

These were my questions. Thank you.

Thank you.

Yeah. Hello, am I audible?

Hi. Yeah.

Right. Sir, a couple of questions.

My first question was that if North as a project is certain, from a strategy point of view, are we contemplating entering the region with some RMC units? Because you already have some experience for RMC in your home turf.

Given the way North is typically a OPC market, incrementally, I think other companies are also talking about RMC increase. As a strategy, would you be contemplating putting more RMC units in the region to begin with so as to make brand visible or indirectly seed the market, and then probably once your product is launched or once your factory is launched, that could help us gain a better traction?

Is that something on the cards? I personally agree

that's a good suggestion. We had not got down to thinking about that yet.

I think it's a good suggestion. I think I would ask my team to kind of evaluate it, and then probably we can have a discussion about it in the next earnings call.

Right now, I think we've read the market. I agree with you that a lot of cities have the RMC culture, and I think we'll have to eventually get to it.

We haven't really modeled it out and we haven't really explored it in detail. We'll do that and we'll get back.

Sir, will look forward. My second question then was about the incentives.

You mentioned Assam government did some things wherein from the earlier payout, they would now do a much more equated kind of a payout. Two things here.

Wanted to understand what is the amount outstanding and are there any receivables there from the Assam government which will take longer than expected?

Manoj, do you have the numbers?

Currently, we have around this quarter also we have received 50-odd crore. ₹140 crore we have received.

Till June, we have an accrual of ₹165 crore, and we have received 140 out of it, and 25 up to June '25, everything will be cleared. Then after that, just let me give the number, five Then 85 is the accrual till March '26, that is suppose it will be 85 plus 25, this is ₹110 crore is outstanding till March '26.

Further this quarter we have accrued around 40 16 crore, that is ₹130 crore is the outstanding from Assam.

₹130 is outstanding. Sorry, how much how many years now what is the total book size or incentive amount that we can get irrespective of the period?

I believe they've changed the period now. What is the total duration in terms of years and maybe the annual amount?

Total was ₹794 crore, okay, that we will get.

Okay.

Yeah. I think the ₹794 crore that we were supposed to get, earlier there was no restriction of how fast you can get.

It depended on the amount of SGST that you gave to the government. Right?

I think the net SGST used to get deducted from that amount of the overall subsidy, right? Now what they've done is that they've divided the amount of subsidy by 12 years.

Right? Out of that, two years have already gone.

Whatever remaining subsidy was there, they divided it by the remaining number of years, right, as per this new circular. The impact of that is about ₹20-30 crore, which is why I said that the estimate of overall subsidy will reduce from 145 to 115.

Understood, sir. Sir, my last question, because there was a change in the government in West Bengal and whatever local articles that we were reading through some friends maybe, I could just understand that there was a big crackdown on the illegal sand mining in the West Bengal so to say.

Do you have any idea if the upcoming industrial policy is there a proposal by the state to formalize the sand mining, which will also then in a way lay ground for having more organized RMC business in the West Bengal as a state?

I think you're right. In West Bengal, there was problems because of the illegal sand mining and the crackdown on it.

That is also the reason why the demand for cement has also been a bit mute, I think, in that area. I do not know if government is trying to formalize this and what steps they're taking to counter this.

I think that once the rainy season gets over, I think they will, in some form or the other, open the sand mining, because I think it will be critical for them to do that. Right now they can't do it because anyways it's raining, it won't be possible for them to do it right now.

Understood. Thank you so much.

Let me again congratulate you for still being one of the highest EBITDA per ton companies, even excluding incentives. We look forward to similar such leadership or that margin gain going ahead as well.

Thank you.

Thank you so much. Thank you.

Navin, we have to give the closing remark by Tushar, as no participants are there?

I think she said the same. She requested for the same.

Anushka requested the same, but she couldn't There's some

No, I think I'd like to just say that, of course, quarter one was not as per any of our expectations, I think because of unforeseen events globally as well as in the states. I think quarter two seems to have a similar trajectory.

This is also because the GST has been significantly revised. I think first hit on the subsidy side was because the GST had reduced from 28% to 18%.

I think in quarter one alone, ₹40 crore was the hit because of that. If we actually exclude that hit of ₹40 crore, then I think we were positive EBITDA in terms of percentage in absolute terms, which shows that there was resilience.

I think from September onward, anyway, the subsidy impact last year had also already hit us. I think from quarter three onward, we will see that there's not much of a loss that we're making because of the reduction in the subsidy.

That part in the books would seem to be taken care of, and then I think the profitability also in terms of the percentage growth in EBITDA will start reflecting in the books. The first quarter two quarters, because last year till September 20 5, the GST rate was 28% and now it is 18%.

Right now we are absorbing the hit of the subsidy, but I think from September onwards, last year also it came down to 18%. I think the hit that the books are facing because of the subsidy will stop being felt after September onwards and we'll start seeing a growth thereafter.

Okay. Thank you.