Heidelberg Cement (HEIM IN) - Q3 FY18 Conference Call Summary - No more issues with Sand availability in Uttar Pradesh, Expect Price Increase in Central

·          Demand: Q3FY18 market growth of 12-14% on back of low base in Central. HEIM reported 16.4% YoY in Q3

o    Expect 6-7% volume growth for HEIM (5-6% for market) in next two quarters driven by government spends in UP (more than MP) & MP. Low cost housing, pending construction, IHB are key drivers

·          Sand: UP government has auctioned land for sand mining. HEIM doesn't expect any major hurdles in near term (NGT orders remain a risk)

·          Price: Marginal price increase of Rs200 per ton in January (versus Q3FY18). Expect price increase in February

·          Ultratech Cement: Market is marginally under pressure due to volume ramp up by Ultratech Cement

·          Cost: Per ton cost excluding logistics declined by 1.6% YoY to Rs2750. Logistics cost increased by 12.1% YoY to Rs605

·          Power & Fuel: WHR has resulted in cost savings. HEIM working on cost optimization for power & fuel

·          EBITDA: Per ton EBITDA increased from Rs457 per ton in Q3FY17 to Rs680 per ton in Q3FY18 driven by increase in realization

·          Pet Coke: Rs9500 per ton in Q3. Slight increase in January. Pet coke still at par with domestic coal

·          Expansion: Current utilization of 88%. HEIM can add 7% more capacity through de-bottlenecking (can be done in 5 months). No plans to add major capacity yet

·          Central Capacity: 3.5mn tons of Ultratech cement's Dhar project

·          Loan: Third tranche of interest free loan of Rs694mn from Uttar Pradesh government