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Operator: Good afternoon, and welcome to the Ilika plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Graeme Purdy, CEO. Good afternoon, sir. Graeme Purdy: Good afternoon. Many thanks to everybody for taking the time to dial into Ilika's half year results presentation. So we're going to have a quick drop through the presentation, and apologies to those long-term followers of the company who know some of the back story here, but I will go over some of the basics just to make sure that for any new investors who are joining this presentation, they get the full picture. And then we'll go into a detailed overview of the principal milestones that the company has hit and things to look forward to in the coming period. And then, of course, we're going to tackle some of the interesting questions that are coming in. And I can see there's quite a collection of questions already. So I look forward to addressing those after we finish going through the slides. So let's crack on. First of all, for the avoidance of doubt, Ilika is a solid-state battery developer, and that's what we're going to be talking about over the coming hour or so. We're going to talk about the state of the market and the state of our technology to address that opportunity. We've got two product lines with different end markets in rapidly growing sectors in both cases. On the one hand, we've got our Stereax miniature solid-state batteries, which are primarily designed to power active implantable medical devices and also wireless industrial sensors, sometimes called IoT. And then on the other hand, we've got our large-format solid-state batteries, which have been developed for the automotive industry and also for cordless consumer appliances. We have an asset-light business model with these products proven on pilot line and up to gigafactory scale in the case of Goliath on equipment that's relevant to gigafactory deployment. We've got a long track record of R&D with 78 patents now in our portfolio that are granted and more applications coming through. So we're ready for commercialization. And we've also had a significant amount of capital invested in the company to date, not only via grant and commercial funding, but also equity investments to put us in a position to be able to deliver our commercial objectives. In terms of the status of the two product lines, on the one hand, Stereax has been licensed to a manufacturing partner already, a company called Cirtec Medical, headquartered in the U.S., and I'll come back to the state of that relationship during the presentation. And on the other hand, our Goliath product line has reached product prototyping stage. So first of all, a bit of a review of some of the key announcements from the first half of this year. Well, the year started well with a successful equity raise that provide us with a stable platform for running the business with contributions from both existing and new investors. So many thanks to those of you who participated in that placing an open offer. In terms of Stereax, we qualified the manufacturing process at Cirtec for our Stereax micro batteries. We then followed that up by commencing production for product testing and the initial deliveries to customers. Those batteries were then delivered to customers before the end of the year. That was a post half 1 event. Actually, you can see a box there of deliveries going to one of our customers, Lura Health, who were actually kind enough to be able to give us a supportive quote on the press release that we issued when that happened in December. And just yesterday, for those of you who follow our news flow on a regular basis, we were able to announce that we've received the first purchase order for the initial commercial batches of the cathode deliveries. So actually, that's the Stereax electrodes that we supply to Cirtec to be able to enable them to make larger volumes of product. So that's an early indicator that volumes of commercial products are starting to ramp. Focusing now on some of the Goliath milestones that we hit. We started the year with a validation of 2-amp-hour Goliath prototypes, which was really great. I'll come back to that in a moment. We secured some grant funding for Goliath industrial prototyping. And also, we've got key automotive support. We finished commissioning the automated pilot line that we've got at our facility, which is a real strengthening of our ability to make 10-amp-hour cells, 10-amp-hour batteries. And we initiated the shipping of those prototypes to customers as we had suggested we would in 2025. So here, you see an overview actually of some of those milestones. And then some insight into what to expect in terms of further commercial progress in 2026. So on the left-hand side, we've got Stereax milestones on the top in blue, and we've got Goliath milestones in green underneath that, and they go from left to right across this plot here. So on Stereax, in terms of following up on our initial delivery of product, the bit in the hashed green box, which covers this year now, 2026, you can see we started in style actually by delivering that first milestone. That's the one I've just been mentioning that we started just yesterday, actually, we announced receipt of the purchase order for those electrodes. The next stage really is going to be an announcement about integrating the Stereax product in the Cirtec power management offering. So one of the big advantages of working with Cirtec Medical is that they've got a number of different technology platforms that they offer to their OEM customers. And they're able to offer a full solution for neurostimulation and integrating our Stereax batteries into that really provides a powerful route to market for that particular component. And then, of course, later in the year, we can expect to announce some initial application design-ins. So this is where the end customers, so our customers and Cirtec customers, large companies and some of the technology developers that we're working with to, take that platform and perhaps just the Stereax components themselves and then design them into products that are taken to market. On Goliath, having shipped those 10-amp-hour prototypes at the end of 2025, of course, we're on tender hooks waiting for some of the feedback from third parties who are testing those prototypes using their own duty cycles and sometimes they are proprietary, and we don't get full insight into the test regimes that they get subjected to. And we will have conversations with those potential customers and talk about how we can convert those 10-amp-hour prototypes into the initial minimum viable products, which really are a samples in the context of the conversations we're having for the EV and automotive sector. And then we will use that as a springboard for securing a commercial scale-up partner or partners in the same way that we've done for Stereax with Cirtec. Just a reminder of our business model here. Ilika sits at the center of an asset-light licensing model where we demonstrate our product capabilities and our process on an industrially relevant pilot line. And actually, in the case of Goliath, we work closely together with the UK Battery Industrialization Centre or UKBIC, where they have much larger scale equipment that actually there's a picture of some of that later on in this presentation. And we'll just remind you of the scale that, that facility operates at, very useful that we have access to that here in the U.K. But essentially, Ilika is an IP generating engine. And that IP, which includes materials, battery architecture know-how and process know-how is licensed to either an OEM or a Tier 1 manufacturing partner, like you see in green and blue circles, respectively, on this diagram. And in return, we receive licensing fees and royalties. And of course, where we're working with a Tier 1 manufacturing partner, they then sell our batteries and perhaps an assembly through to the OEM for final branding and commercialization. So we believe that this is a capital-efficient strategy suited for the type of business that we are and supports rapid industrial adoption of our technology. So let's talk in a bit more detail about Stereax. Stereax, as I explained, is for active implantable medical devices primarily. And there are some of the applications, which are really exciting applications ranging from orthopedics, so smart hip replacements, knee replacements, shoulder replacements where you can use this technology to track the physiotherapy that a patient undertakes and make sure that, that recovery is as efficient as possible. Neurostimulation or neuromodulation, sometimes actually called nerve stim as well, so stimulation of the peripheral nervous system. The most basic application here is where you actually offset some of the pain that you may get, for instance, lower back pain with a stimulation of the nerves that are involved, and this gives the patient some relief from that pain, but also some very broad applications in cognitive disorders and also strokes and even stimulating some organs through the vagus nerve. So really exciting applications there. Then some implanted sensors for people who struggle with chronic conditions that need regular monitoring for the health of the patient. They could be oxygen pressure in blood or some cardiovascular complaints, often high blood pressure is monitored using these sensors. Then we've got some ophthalmic applications. So various conditions of the eye that can be monitored. And then finally, orthodontic, so mouth guards and salivary monitoring applications such as what we highlighted with Lura Health in our release just before Christmas. So some exciting applications. A lot of the customers actually for these applications are based in the U.S. Some of the largest medical device companies in the world are headquartered in the U.S. And so having a relationship that is based over there for manufacturing the product is a really great fit with that geographic location. And this is what the product looks like. This is our M300. You can see it's a tiny little battery, 300 micro amp-hours of capacity. The big attraction of that is how small it is and how easily it can be integrated into some of these tiny little implantables. The fact that it's got a long cycle life and also a high pulse current, so it can be used to drive Bluetooth chips and send data from the device outside of the body and to often, frankly, a mobile phone where it is relaid onto a database or an app to manage the health condition. So the big advantage of these cells really is that you can reduce surgery time. And this is absolutely critical to reduce the cost of these implants because most of that cost is driven by time in the operating theater and the time of the surgical team that is carrying out the operation. So if you've got a small implanted device that can be inserted easily into the body, then you reduce the amount of time that's required in the theater. So this Cirtec Medical partnership is really going from strength to strength. Just before Christmas, of course, we shipped those M300s to customers that had largely been made at the Cirtec facility across in Lowell in Massachusetts. And we're now starting to register those commercial revenues from wafer processing. So that's the positive electrodes that we manufacture here in the U.K. and we send over to the U.S. We've got a strong licensing agreement in place there to the mutual benefit of both Cirtec Medical and ourselves, providing the product at an affordable price to end customers. We believe that this relationship really demonstrates industry validation of the product and the process. It gives us really important access to manufacturing scale. So that's often the question that we got when we were manufacturing at pilot line scale here in the U.K. These big med tech companies would say, great that you've got a pilot line, how do we get to the much larger volumes of production that are required. And of course, we can do that through a company like Cirtec Medical. They've also got a fantastic business development team. And actually, one of my colleagues, Denis Pasero, who you might have seen in some of the videos and publicity that we have created, is across in California at the moment with the Cirtec business development team at the NANS show, the North American Neurostimulation Society, and he is working closely together with them to interact with some of the potential partners and customers who are interested in our neuromodulation capability. There's also a really strong technology focus at Cirtec that matches our own road map. So the two are very closely aligned. And this, of course, is really enabling that fast adoption of the Stereax product. So how does that all translate into revenue that we as a company and you as shareholders can benefit from? I'm going to let Jason say a few words about this chart. Jason Robert Stewart: Thank you, Graeme, and thank you to everyone who's attending today. This is designed just to give a better understanding of how the different layers of revenue will come for the Stereax side of the business. So this is purely as an indication rather than any specific numbers. But to help give some explanation for the different layers that we have. So as you can see from the slide, we've got four different layers of income that will feed through on the Stereax side of the business. The first of those, Graeme has already touched on that, relates to that cathode deposition process. So covered within our contract, we will be providing that on a regular basis, and the contract does stipulate the lead time for delivery. And that will progress from now onwards. So that gives us a good drumbeat of low tens of thousands of income that will be coming through for each of those batches that we deliver across to feed into that production process as we go forward. And that's a really, really important point for the business as it gives a good baseline of income to start with even before we start to get products into people's hands, and we start to see the really fantastic growth from product royalty revenue, which obviously follows on after that. Underneath that in the green section, we do have expectations around nonrecurring engineering, so NRE. This is a big element within the med tech sector. And actually, Cirtec drive a large piece of their own revenue from this and have guidance around what we should be expecting as we work with end customers either to validate our Stereax batteries in their particular application, and they would pay for that validation and support through their certification process or if they have a specific need for a size or shape of a variation of our Stereax MVP to suit their particular application. Obviously, some of these in-body applications have very precise needs in terms of where they can be located and therefore, the shape of the device, and that plays back into the strengths of Stereax and how we can adapt to that. Underneath that, obviously, we're expecting royalty to come through as specified within our contract with Cirtec. In the short term, up to a volume breakpoint, that's actually a profit share. So we will get the larger proportion of any profit that's coming through from those batteries from an agreed price and -- sales price and cost price that we have within the contract. Unfortunately, that's covered under NDA. So we're not in a position where we can share the precise details of that, but that certainly protects us at those low-volume initial orders as they come through to make sure that we are getting a good return back. And then beyond that, at the very bottom, we actually have some carve-outs within the contract to make sure that we can offer the Stereax product to other markets or to very high-volume applications. That means that we won't lose out on any opportunities if they come along. And for any reason at all, Cirtec are not able to scale as quickly as that product demands, we do have the ability to issue additional licenses, and we would expect those to come with upfront license fees that would feed through. So giving lots of different opportunities, but really, that revenue starts from now with those first purchase orders as we announced yesterday for the cathode deposition process. Graeme Purdy: Great. Well, that covers the update for Stereax. So let's talk a little bit about Goliath now. Contrary to a lot of the media headlines which you may be misled by, actually, the sales of EVs have continued to grow in 2025 as the sales of traditional vehicles, ICE vehicles, so internal combustion engine vehicles continue to decline globally. Here in the U.K., and I know a lot of our shareholders are based here in the U.K. last year, 23% of new car registrations were for EVs. In December, that had actually peaked at 32%. And the majority of new vehicle registrations, if you combine hybrid electric vehicles, so mild hybrids and plug-in hybrids and full EVs, actually, the majority of vehicle sales were made up by those different categories. So continuing to grow. And also on this slide, you see the forecast from the Office of Budget Responsibility, OBR, here in the U.K., expecting despite some of the maybe slightly confusing legislation that was brought through in the budget, still an expectation of the rise of electric vehicle penetration as we go forward in time. And by the time you get to 2035, actually the majority of vehicles on the road, so total car stock then being EVs. However, we should also recognize that there are some headwinds, and they're particularly strong in the U.S. where the current administration isn't offering the same level of incentives for EVs as we've seen with the previous administration. And that's led to some turbulence in the market. But the longer structural growth drivers remain intact. And I think the key thing here to recognize is that Goliath technology offers a differentiated approach for European and North American manufacturers who are looking to differentiate the product that they're making from the dominant Asian offerings that are out there at the moment. So the reality is a lot of the people who are building gigafactories at the moment have taken a license to established Asian technology. And I think that's an entirely rational approach when you first want to set up a gigafactory. You want to make sure that the technology is stable and that you can then use it to good effect, but that's not a sustainable business model because actually, you're reliant on tariffs in order to protect your business from low-cost efficient Asian competition. And if you want to differentiate your offering, you have to look to new technology. And that's really the USP for working with companies like Ilika is that you can come up with an offering that gives you a sustainable competitive advantage. Now in addition to that, I also wanted to mention European demand in aerospace and defense. You're seeing substantial growth in this sector for related battery technologies. And that's really driven by increased defense spending where budgets have been ramped up, the remorseless electrification of defense platforms. Just in the same way that we as consumers are seeing the electrification of a lot of our domestic appliances, you're also seeing that in the defense industry. There is a need for portable power, i.e., being able to use these devices in the field. And of course, there's a strong argument for having some strategic autonomy where perhaps some of the alliances that there might have been historically are not looking as strong and dependable as they might have been. So some interesting non-EV applications for the technology. Just to reiterate why anybody should be interested in using Goliath in an EV. We've done some great modeling work together with a company called Balance Batteries here in the U.K. They are pack designers. And they looked at putting in Goliath batteries into a state-of-the-art EV and seeing what the effect would be from an economic perspective and also a performance perspective, and they calculated a reduction in the cost of the battery pack of GBP 2,500 relative to the battery technology that's used currently. So those of you watching in color, about $3,000, a weight saving of up to 20%, and that correlates to a range extension of that order of magnitude because, of course, the light of the vehicle, the further it will go for a given amount of energy and 1/3 of the charge time. So a drop from 18 minutes to 12 minutes on a 10% to 80% state of charge. So a saving of 6 minutes there, which makes a big difference. And there's a reiteration on this slide of that validation that we got of our 2-amp-hour prototypes that we'd sent out last year for validation. They performed to specification, putting them in that leading cohort of solid-state batteries. So that supports the further engagement that we've had with that particular Tier 1 and others with our latest release of 10-amp-hour prototypes. So I promised you a picture of what some of the equipment looks like at UKBIC. There's actually a photograph of an operator maintaining an impeller on one of the mixing vessels. So you see the massive scale at which this equipment operates. Really important that we can demonstrate that our technology is compatible with that scale of equipment, and that gives our customers a lot of comfort that the process technology that we've developed is easily deployable in an existing gigafactory. So as part of the work that we did with UKBIC, we successfully coated an electrode electrolyte composite. So the way that our solid-state batteries work is that we have a coating of our electrolyte on the anode. We got a higher manufacturing yield than we saw on our own pilot line. Sometimes the reverse is true in other technologies, but not here. We've seen actually that as you go to a larger scale on this quite sophisticated equipment, you actually get an improvement in yield. And also, when we tested the batteries, we actually found that, that increase in quality gave them a higher capacity and the faster charging protocols. So very broadly positive outcomes from that scale-up work. And the fact that standardized gigafactory equipment can be used, it means that there's no real demand for replacing the existing manufacturing equipment that's used there. You've got a reduced risk when you deploy our technology. And you've got that yield increase and cost reduction and yield is so important in this sector to make sure that you've got a sustainable economic model. So in terms of what you could expect going forward, I mean, there's been a whole raft of milestones that we have achieved in 2025 that gave us consistent and regular news flow that we could use to keep our shareholders apprised of progress. But it's given us a strong platform for more news to come in the second half of the financial year through this year and onwards. We're waiting for that customer feedback on the 10-amp-hour cells for the applications that we have distributed these batteries for, so EV and non-EV. So samples went out to a broad range of different companies. We expect actually to get some further grant support for testing and validation of our technology. So that goes a long way to offset some of the ongoing R&D costs that we've got. And then once we've got that validation of our products, we're in a position to progress the discussions with our target customers about what their minimum viable product might be for a generic A sample in the case of the automotive industry, that's what they're called, to define that, get them shipped and evaluated and then in due course, to allow us to enter into exactly the same sort of manufacturing relationship that we've got for Stereax. And this is what the scale-up story looks like. Just to reiterate that we do not anticipate manufacturing Goliath cells at a larger scale than pilot line scale. We believe that, that larger scale manufacturing is better done together with a manufacturing partner because, of course, if you're a big automotive OEM, you really want to make sure that you've got a low-risk supply chain. So it's far better that we partner with a manufacturing-focused organization that's got an established relationship with an OEM so that we can leverage their expertise and give them comfort that the technology is being delivered, the product is being delivered in a reliable manner. But of course, that opens the licensing opportunity window for us. Now that we've started shipping these 10-amp-hour cells, we're in that green zone that's pictured at the top there as we go through the next stages of scale-up and development together with one or more partners and then transfer the technology into a gigafactory environment. So Jason, perhaps talk through how we've built up that revenue projection with an increased number of customers relative to the last time that we spoke. You can see that we've now got 27 NDAs evaluation agreements in place. Jason, over to you. Jason Robert Stewart: Thank you, Graeme. A very similar story to the Stereax side of the business and the revenue buildup that we looked at slightly earlier. So made up of four different elements. Here, once again, we -- the first element has already commenced, and that's grant funding, so that's that top section. And grant funding has been a really important element for us, not just because it is non-dilutive share funding. So for every pound that we can deploy, half of that cost on average is covered by grant where we've been able to secure grant funding to be able to support that particular work package. And we'll touch on the financial results in a moment, but we have continued to secure new grant funding projects as we have gone through the first half of this year, and we'll continue to do so. So we see that as a continuing point. The other element around those grant-funded projects is they are also an incredibly good way to engage with the automotives and Tier 1s because they are also looking to collaborate through those grant-funded projects as a way to evaluate new technologies. So as we move through the cell design, that MVP section and start to look at the benefits and delivering those in the pack and module, as Graham touched on earlier, where some of those benefits for ourselves really come out, we've got good interest from automotives and Tier 1s in doing grant-funded projects around that type of activity. So it's a really important way for us to engage with those key potential customers as we go forward. Underneath that, there's a very small element of nonrecurring engineering for the Goliath product. The reason for that is that while we've designed a format of pouch cell, we designed that really around a commonality with the UKBIC so that we could scale up using the equipment that the government has got in place and Graeme talked about earlier to prove that our cells work at giga scale. However, each individual auto company or Tier 1 manufacturer may have slight variations to fit their pack and module designs. So we expect that if we are to change our design slightly to fit their particular needs as we enter into that licensing point that we would be able to receive some funding from them to be able to do that piece of work. Obviously, we then have battery works revenue. Now that does take a little bit of time to start building through in volume with the automotive side of the business, very much because of the time to build through that demonstration of A, B and C samples that Graeme showed on the previous slide as the automotive or Tier 1 deploys that in their own gigafactory and gets that into their vehicle platform and on to the fore. But really, as you can see, towards the end of the period, as volume picks off, that's where really large volumes of income start to come through. And underneath that, the last point then, but potentially the largest income generator in the short to medium term is licensing income. So as Graeme talked about, we're in that green window for licensing discussions. We would expect those licenses when we secure them to have a number of stage payments against performance. And the expectation there is that will be tied to those A, B and C sample points that we showed on the previous slide. So really, that's around looking for an option to evaluate at that A sample point. So when we lock down our MVP, which we're looking to do in the near future and look for those partners, then as we transfer that same sized product into the automotive's own pilot line, that would be classed as that B sample and they produce it under that license, that would trigger another stage payment. And then finally, as it goes to what's called a C sample, and that's the point when it's made at gigafactory scale that would deliver a final stage payment on those license. I would expect a couple of licenses in the automotive sector, but also opportunity for licenses outside of that, along with those other applications that you can see in the top right-hand corner, so potentially supporting defense or consumer electronics. So that gives a real buildup of how we expect Goliath to develop some revenue as we go forward. In terms of the half year results that were in the announcement, our turnover is GBP 0.6 million. Now that is down from the previous year. And really, that's to do with the timing of the grant funding. So for those that have followed the business, during this point last year, we had two grant-funded projects, that was HISTORY and SiSTEM, which were coming to the end, and they had finished by January 2025. So you saw more of the revenue in the first half of the prior year. And this year, you're seeing the commencement of our PRIMED project, which we secured. So there's more to come from that revenue as we go through into the second half. So you'll see that equalizing and then moving ahead as we move into the second half. So those secondary bullet points there just confirm that, that really is the grant funding movement that you've seen coming through. The EBITDA loss has increased year-on-year at the half year point, and that really is a reflection of two elements: one, that reduction in turnover, but also on the Goliath side of the business, as we've ramped up from those P1 2-amp-hour products into the P1.5 10-amp-hour items, 5x energy. There's 5x as much active material going into those. We're consuming much more from a materials point of view as we produce those prototypes, and we expect to do that as we go through. We have to make these larger sales for the potential licensees to evaluate. So that's part of the journey that we're going on, which then leaves us with a cash balance at the half year-end of GBP 6.9 million versus GBP 10.1 million. But I would point out, as you can see in the accounts that were published, we have a significant R&D tax credit that is paid out through the latter half of the calendar year. And that was received shortly after the close of the half year results. So that helps to bolster the cash position up further and give us a longer runway. Graeme Purdy: Thank you, Jason. So just to wrap up the formal part of the presentation, I think five great reasons to think about continuing to invest in Ilika. First of all, we have a really strong patent portfolio, a lot of know-how in the business about solid-state battery technology, which is a really exciting deep tech sector to get involved in. We're diversified across multiple markets, so two main market sectors with a near-term route to commercialization. We've got a set of fabrication facilities, so pilot lines that are able to support technology licensing and partnerships and validate scale-up plans. We've already got a licensing and royalty agreement in place with Cirtec to deliver economy of scale and our ability to ramp production to feed product to customers of Stereax. And finally, we've successfully shipped Goliath prototype batteries to OEMs and Tier 1s who are interested in the product as an early indication of adoption of that technology and commercial rollout. So many thanks, and we will shortly move over to Q&A. Operator: [Operator Instructions] I'd like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed by our investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Graeme Purdy: Thank you. So first of all, many thanks for such an array of questions. We've got a really interesting set that we are going to do our best to answer as completely as we can. So the first one is, who do you see as your biggest competitors? And what is the risk of superior innovations taking market share? Great question to kick off. So there are two types of competitors, really. The first one is incumbent battery manufacturing companies who are innovating their existing traditional lithium-ion technology and trying to improve that, either with a solid-state alternative or perhaps just a better liquid electrolyte-based lithium-ion cell. And then on the other hand, there are technology developers who are similar companies to us who are looking to either enter the market with a new manufactured product or to license the technology in the same way that we do. So biggest companies, well, look, the incumbents in this sector for manufacturing batteries are Chinese and Korean and Japanese companies like BYD, CATL, SK On in Korea, Samsung SDI, LG Chem and Panasonic. And so you see these guys being very active in the sector. And then technology innovators, technology developers, you've got some highly valued U.S. competitors such as QuantumScape and Solid Power and also some privately held companies. And what I would say is that a lot of these offerings are differentiated from each other. So the solid-state umbrella term is very broad. And just as you get quite a bit of diversity in standard lithium-ion cells, you've got different types of solid-state batteries. And the choices that you make around the materials combination for these different types of batteries have a direct impact on the performance of the cells and therefore, the benefits that they give the end user. And there's actually quite a bit of diversity in normal lithium-ion battery technology, the batteries that go into consumer electronics and consumer appliances are often very different to the batteries that might go into stationary storage or EVs. And even within the EV sector, there are different types of chemistry that are being used there. So what I would say is that although there are different offerings, there will be applications for the different types of solid-state battery that are developed. And so because it's a rapidly growing market, I expect that most of the technologies that have got merits and unique properties that differentiate themselves will be adopted for different applications. So I'm not worried too much about market share. I don't think there's going to be one battery to rule them all. I think there are going to be different segments where these batteries can be deployed. Jason Robert Stewart: Okay. We've got a question here. When will the company start making money? Well, as I've already talked to, certainly revenues from commercialization on the Stereax side of the business will flow almost immediately as we start that cathode deposition process. And that really is, I can't stress enough, an important inflection point for Stereax side of the business as that really rings the bell to say we're making product and that's feeding through into the various different processes that Cirtec now completes through on the back of that before product then comes out through that. Now as with all of the batteries that we are developing and producing, part of the success of those is underpinned by having a data set that really displays that those batteries can be proven to do exactly what we say on the tin. So it will take some time for us to have all of the data required to support that as we go through. But we do expect certainly on the Stereax side once again, that we'll start to see low volumes of product sales, so actual battery sales starting to come through before the end of the 2026 calendar year. So really then we've completed that commercialization of the product, and then it is about supporting Cirtec and the ultimate end customers as they get those batteries into their devices and ramp up their own development processes and whatever verification and validation process they need to go through, depending on the class of device that those go into. On the Goliath side of the business, obviously, we've talked about revenue coming from grant funding, but that isn't really commercialization of those batteries on the Goliath side. And that really comes down to as we move through this year, we will settle on that MVP that we talked about and look for how we can get those into production with partners. Now as Graeme has talked about, although the automotive sector has some headwinds against it, those other markets that are opening up may give us a much shorter window in terms of being able to get some commercialization happening with those 10-amp-hour cells, which are the perfect size for some of those ancillary applications that Graeme talked about. So really, this year gives us a great opportunity to start seeing money coming through on both sides of the business. Graeme Purdy: So the next question is with the development of M1000 cells, so this is a larger capacity design of Stereax cells that we've talked about previously, will Cirtec be able to produce these on current equipment alongside M300? Or will new equipment have to be installed? So this is a great question. The prototyping work that we've done so far has indicated that it is possible to make M1000 cells using the same process that we currently deploy for M300. So effectively, these are larger capacity, more energy dense cells. So they have more appeal for certain power-hungry applications. However, we are still reviewing whether there are process changes that would give a more price competitive product based either on operational yields because we can get a higher yield using a different process approach or whether the actual process itself is intrinsically cheaper than the process steps that we've defined for M300. So we haven't yet finalized the process flow sheet for M1000s, and that's an ongoing piece of work. But our game plan is to commercialize and roll out M300s first and make sure that we capture all of the learnings from that product launch before we invest further in any changes to the process for M1000s. Jason Robert Stewart: Okay. We've got a question here. Are Ilika in discussions with any companies about using Stereax for AI glasses? Well, as I'm sure you can imagine, any sort of deep technology development for a consumer product is covered under nondisclosure agreements. So we can't specifically talk about anyone that we are talking to. But we can say that we have lots of interest about a range of applications and not all of those are just in the med tech space. Some of those are in the small consumer electronics space. So there is definitely interest in the size, shape and power of the Stereax batteries for being able to supply those small devices that you can imagine might suit that application. So it's a difficult one for us to give any information on as it's tightly covered. But it's safe to say we are exploring as many opportunities as we can with companies, and we have some strong relationships in those sectors. Graeme Purdy: Then the next question is, are Ilika in discussions with any companies about using SSPs in mobile phones or as portable battery packs? So just for clarity, the technology platform that's relevant for these applications is Goliath. Of course, we have focused the Goliath development on the EV objective, which is what we receive grant funding to deliver. However, we have talked about some ancillary markets that we can address. And mobile phones is an example of consumer electronics, which would benefit from having solid-state batteries. And perhaps more pertinent to defense applications, portable battery packs are definitely an application area, too. So it's absolutely key to make sure that the USPs, the unique selling points for our solid-state batteries are relevant to these applications, and we believe that they are in some respects. And therefore, we are validating the commercial opportunities for these deployments as part of the overall commercialization strategy that we're rolling out. Jason Robert Stewart: Okay. For the next -- I'm actually going to take the next two questions as they're almost identical, one for Stereax and one for Goliath. So I shall attempt to cover them both off with one answer. So the first of those two questions is, what has been the initial feedback from Cirtec customers using Stereax? And the second question is, what has been the early feedback from customers about the 10-amp-hour Goliath batteries? So both of these relating to the deliveries that we announced just before Christmas at the end of December. And the answer for both is very much the same in that batteries need to be assessed over a period of time by the people that are evaluating them. So there's no immediate answer other than the thanks for fulfilling the backlog to get those cells, Stereax or Goliath, into their hands. But we are in close communication with the companies that we've delivered those to, and we will gather that feedback as they have worked to integrate them into their own testing systems and then as they cycle and run them through. And once we get that information and get that feedback, then we will look for the appropriate way in which we can feed that back to the shareholder base and to the wider market so that people can understand what that feedback is because it's always great to get external feedback and validation for our products rather than just our own information, which we can share. Graeme Purdy: The next question is, how confident are Ilika of agreeing licensing deals for Goliath during 2026? Well, look, the licensing window for the technology is now open. I think really the delivery of our 10-amp-hour prototypes fired the starting pistol on that particular race. We haven't just limited ourselves to saying that, that licensing deal is going to be concluded in this year. As you can see actually from the slide where we cover that, we would expect discussions to go on for the next 30 months or so. And obviously, we would push for an early licensing deal where possible. But for a deal of this magnitude, there's due diligence that's required. And so we expect that we will continue working on this opportunity throughout this calendar year. Jason Robert Stewart: Okay. The next question is, can you confirm the external pressure needed for your sales? For those that maybe don't understand that question, there are some circumstances where external pressure can be applied to cells, either cylindrical cells, pouch or prismatic cells to aid in the performance of those, and that varies based on the format of the cells and the chemistry within them. Unfortunately, we're not in a position where we can share that information. We're in discussions with the order customers around what they're looking for. And actually, some of those have differing needs around pressure for their different applications and how they put together their pack and module and part of our own development plans are pulling together lots of information to support those various different applications to help guide our customers and to gain better feedback on what works best, not only for our own chemistry set as we develop that, but also for the customers and how they wish to integrate that within their packs and modules. Graeme Purdy: Mindfully done, Jason, I'd maybe just add to that response that the application of external pressure can improve the cycle life of both lithium metal and silicon anode-based designs, they're aware of that. But of course, the downside of applying too much pressure is that it becomes a difficult engineering challenge. You don't really want to have a battery pack in your vehicle that needs a substantial amount of external pressure applied. So we are optimizing our cell architecture to try and keep that pressure to a level which is economically viable within the context of mass production vehicles. The next question is an interesting one. What do you make of recent claims by Donut Lab? Well, this is a question that we've had quite a lot actually since CES. Congratulations to Donut Lab for managing to monopolize the conversation in the battery sector over the space of a few days. Look, I mean, there were some fantastic claims. It felt a bit like the clock had been rewound to 2019 when a lot of companies were claiming spectacular performance for their technologies. I think if you read a lot of the industry analysis and informed commentary on the technology, that it is unlikely that all of the claims will be substantiated and it appears to be more a technology which is derived from capacitor technology rather than straightforward what we'd consider to be battery technology. So capacitor technology is capable of delivering large pulses of energy of electricity. But typically, capacitors are not capable of storing energy over long periods of time. So there may be downsides, which become apparent in due course once you get external validation by independent authorities or potential customers of this technology. And I would say that to all appearances, it appears that there is quite a long time line between now and such technology being commercially ready. So probably not one to worry about too much in the short term. Jason Robert Stewart: Mindful of time left in the broadcast. If I handle the next one, which I think might give us a sort of a suitable landing point, there's a question here, what's your commercial plan for '26 for Stereax and Goliath. And I've also seen another question later related to what milestones should we be looking out for if you're monitoring the company and what we're doing in 2026. And if I just take you back almost to the beginning of the presentation to when Graeme started, if I can get us back to the beginning. And really, it's the section here in the dotted line. Those are the milestones. Those are the things that you should be focusing and looking for us to deliver against to show that we are delivering continued steps against our plans for rollouts, both at the top there for Stereax in terms of getting integration into the Cirtec development board. And that really unlocks our ability to work with Cirtec for some of their bigger customers that perhaps we haven't been able to interact with before because that gets the Stereax battery integrated into an electronic evaluation board that eases its adoption and evaluation by potential customers through to then revenue starting out from deliveries by customers. And then on the Goliath side, those other steps that Graeme once again talked through in terms of feedback from those 10-amp-hour cells that we talked about that we delivered and will continue to be delivered, landing on the feedback from that and how that feeds into the MVP as we go through the second half of the year. Graeme, I don't know if there's anything you wanted to add. Graeme Purdy: Thank you very much, Jason. No, I think we've had our allotted hour. I see that there's still some more questions that we haven't yet had time to address. What I will do, though, is go through all of those questions with Jason and if there are any that cover aspects that we haven't covered verbally, then we will draft an answer, and they will be published along with the rest of our answers in due course. So many thanks for your time today, guys. Operator: That's great. Thanks for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Ilika plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.
Operator: Good afternoon, and welcome to the Ilika plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Graeme Purdy, CEO. Good afternoon, sir. Graeme Purdy: Good afternoon. Many thanks to everybody for taking the time to dial into Ilika's half year results presentation. So we're going to have a quick drop through the presentation, and apologies to those long-term followers of the company who know some of the back story here, but I will go over some of the basics just to make sure that for any new investors who are joining this presentation, they get the full picture. And then we'll go into a detailed overview of the principal milestones that the company has hit and things to look forward to in the coming period. And then, of course, we're going to tackle some of the interesting questions that are coming in. And I can see there's quite a collection of questions already. So I look forward to addressing those after we finish going through the slides. So let's crack on. First of all, for the avoidance of doubt, Ilika is a solid-state battery developer, and that's what we're going to be talking about over the coming hour or so. We're going to talk about the state of the market and the state of our technology to address that opportunity. We've got two product lines with different end markets in rapidly growing sectors in both cases. On the one hand, we've got our Stereax miniature solid-state batteries, which are primarily designed to power active implantable medical devices and also wireless industrial sensors, sometimes called IoT. And then on the other hand, we've got our large-format solid-state batteries, which have been developed for the automotive industry and also for cordless consumer appliances. We have an asset-light business model with these products proven on pilot line and up to gigafactory scale in the case of Goliath on equipment that's relevant to gigafactory deployment. We've got a long track record of R&D with 78 patents now in our portfolio that are granted and more applications coming through. So we're ready for commercialization. And we've also had a significant amount of capital invested in the company to date, not only via grant and commercial funding, but also equity investments to put us in a position to be able to deliver our commercial objectives. In terms of the status of the two product lines, on the one hand, Stereax has been licensed to a manufacturing partner already, a company called Cirtec Medical, headquartered in the U.S., and I'll come back to the state of that relationship during the presentation. And on the other hand, our Goliath product line has reached product prototyping stage. So first of all, a bit of a review of some of the key announcements from the first half of this year. Well, the year started well with a successful equity raise that provide us with a stable platform for running the business with contributions from both existing and new investors. So many thanks to those of you who participated in that placing an open offer. In terms of Stereax, we qualified the manufacturing process at Cirtec for our Stereax micro batteries. We then followed that up by commencing production for product testing and the initial deliveries to customers. Those batteries were then delivered to customers before the end of the year. That was a post half 1 event. Actually, you can see a box there of deliveries going to one of our customers, Lura Health, who were actually kind enough to be able to give us a supportive quote on the press release that we issued when that happened in December. And just yesterday, for those of you who follow our news flow on a regular basis, we were able to announce that we've received the first purchase order for the initial commercial batches of the cathode deliveries. So actually, that's the Stereax electrodes that we supply to Cirtec to be able to enable them to make larger volumes of product. So that's an early indicator that volumes of commercial products are starting to ramp. Focusing now on some of the Goliath milestones that we hit. We started the year with a validation of 2-amp-hour Goliath prototypes, which was really great. I'll come back to that in a moment. We secured some grant funding for Goliath industrial prototyping. And also, we've got key automotive support. We finished commissioning the automated pilot line that we've got at our facility, which is a real strengthening of our ability to make 10-amp-hour cells, 10-amp-hour batteries. And we initiated the shipping of those prototypes to customers as we had suggested we would in 2025. So here, you see an overview actually of some of those milestones. And then some insight into what to expect in terms of further commercial progress in 2026. So on the left-hand side, we've got Stereax milestones on the top in blue, and we've got Goliath milestones in green underneath that, and they go from left to right across this plot here. So on Stereax, in terms of following up on our initial delivery of product, the bit in the hashed green box, which covers this year now, 2026, you can see we started in style actually by delivering that first milestone. That's the one I've just been mentioning that we started just yesterday, actually, we announced receipt of the purchase order for those electrodes. The next stage really is going to be an announcement about integrating the Stereax product in the Cirtec power management offering. So one of the big advantages of working with Cirtec Medical is that they've got a number of different technology platforms that they offer to their OEM customers. And they're able to offer a full solution for neurostimulation and integrating our Stereax batteries into that really provides a powerful route to market for that particular component. And then, of course, later in the year, we can expect to announce some initial application design-ins. So this is where the end customers, so our customers and Cirtec customers, large companies and some of the technology developers that we're working with to, take that platform and perhaps just the Stereax components themselves and then design them into products that are taken to market. On Goliath, having shipped those 10-amp-hour prototypes at the end of 2025, of course, we're on tender hooks waiting for some of the feedback from third parties who are testing those prototypes using their own duty cycles and sometimes they are proprietary, and we don't get full insight into the test regimes that they get subjected to. And we will have conversations with those potential customers and talk about how we can convert those 10-amp-hour prototypes into the initial minimum viable products, which really are a samples in the context of the conversations we're having for the EV and automotive sector. And then we will use that as a springboard for securing a commercial scale-up partner or partners in the same way that we've done for Stereax with Cirtec. Just a reminder of our business model here. Ilika sits at the center of an asset-light licensing model where we demonstrate our product capabilities and our process on an industrially relevant pilot line. And actually, in the case of Goliath, we work closely together with the UK Battery Industrialization Centre or UKBIC, where they have much larger scale equipment that actually there's a picture of some of that later on in this presentation. And we'll just remind you of the scale that, that facility operates at, very useful that we have access to that here in the U.K. But essentially, Ilika is an IP generating engine. And that IP, which includes materials, battery architecture know-how and process know-how is licensed to either an OEM or a Tier 1 manufacturing partner, like you see in green and blue circles, respectively, on this diagram. And in return, we receive licensing fees and royalties. And of course, where we're working with a Tier 1 manufacturing partner, they then sell our batteries and perhaps an assembly through to the OEM for final branding and commercialization. So we believe that this is a capital-efficient strategy suited for the type of business that we are and supports rapid industrial adoption of our technology. So let's talk in a bit more detail about Stereax. Stereax, as I explained, is for active implantable medical devices primarily. And there are some of the applications, which are really exciting applications ranging from orthopedics, so smart hip replacements, knee replacements, shoulder replacements where you can use this technology to track the physiotherapy that a patient undertakes and make sure that, that recovery is as efficient as possible. Neurostimulation or neuromodulation, sometimes actually called nerve stim as well, so stimulation of the peripheral nervous system. The most basic application here is where you actually offset some of the pain that you may get, for instance, lower back pain with a stimulation of the nerves that are involved, and this gives the patient some relief from that pain, but also some very broad applications in cognitive disorders and also strokes and even stimulating some organs through the vagus nerve. So really exciting applications there. Then some implanted sensors for people who struggle with chronic conditions that need regular monitoring for the health of the patient. They could be oxygen pressure in blood or some cardiovascular complaints, often high blood pressure is monitored using these sensors. Then we've got some ophthalmic applications. So various conditions of the eye that can be monitored. And then finally, orthodontic, so mouth guards and salivary monitoring applications such as what we highlighted with Lura Health in our release just before Christmas. So some exciting applications. A lot of the customers actually for these applications are based in the U.S. Some of the largest medical device companies in the world are headquartered in the U.S. And so having a relationship that is based over there for manufacturing the product is a really great fit with that geographic location. And this is what the product looks like. This is our M300. You can see it's a tiny little battery, 300 micro amp-hours of capacity. The big attraction of that is how small it is and how easily it can be integrated into some of these tiny little implantables. The fact that it's got a long cycle life and also a high pulse current, so it can be used to drive Bluetooth chips and send data from the device outside of the body and to often, frankly, a mobile phone where it is relaid onto a database or an app to manage the health condition. So the big advantage of these cells really is that you can reduce surgery time. And this is absolutely critical to reduce the cost of these implants because most of that cost is driven by time in the operating theater and the time of the surgical team that is carrying out the operation. So if you've got a small implanted device that can be inserted easily into the body, then you reduce the amount of time that's required in the theater. So this Cirtec Medical partnership is really going from strength to strength. Just before Christmas, of course, we shipped those M300s to customers that had largely been made at the Cirtec facility across in Lowell in Massachusetts. And we're now starting to register those commercial revenues from wafer processing. So that's the positive electrodes that we manufacture here in the U.K. and we send over to the U.S. We've got a strong licensing agreement in place there to the mutual benefit of both Cirtec Medical and ourselves, providing the product at an affordable price to end customers. We believe that this relationship really demonstrates industry validation of the product and the process. It gives us really important access to manufacturing scale. So that's often the question that we got when we were manufacturing at pilot line scale here in the U.K. These big med tech companies would say, great that you've got a pilot line, how do we get to the much larger volumes of production that are required. And of course, we can do that through a company like Cirtec Medical. They've also got a fantastic business development team. And actually, one of my colleagues, Denis Pasero, who you might have seen in some of the videos and publicity that we have created, is across in California at the moment with the Cirtec business development team at the NANS show, the North American Neurostimulation Society, and he is working closely together with them to interact with some of the potential partners and customers who are interested in our neuromodulation capability. There's also a really strong technology focus at Cirtec that matches our own road map. So the two are very closely aligned. And this, of course, is really enabling that fast adoption of the Stereax product. So how does that all translate into revenue that we as a company and you as shareholders can benefit from? I'm going to let Jason say a few words about this chart. Jason Robert Stewart: Thank you, Graeme, and thank you to everyone who's attending today. This is designed just to give a better understanding of how the different layers of revenue will come for the Stereax side of the business. So this is purely as an indication rather than any specific numbers. But to help give some explanation for the different layers that we have. So as you can see from the slide, we've got four different layers of income that will feed through on the Stereax side of the business. The first of those, Graeme has already touched on that, relates to that cathode deposition process. So covered within our contract, we will be providing that on a regular basis, and the contract does stipulate the lead time for delivery. And that will progress from now onwards. So that gives us a good drumbeat of low tens of thousands of income that will be coming through for each of those batches that we deliver across to feed into that production process as we go forward. And that's a really, really important point for the business as it gives a good baseline of income to start with even before we start to get products into people's hands, and we start to see the really fantastic growth from product royalty revenue, which obviously follows on after that. Underneath that in the green section, we do have expectations around nonrecurring engineering, so NRE. This is a big element within the med tech sector. And actually, Cirtec drive a large piece of their own revenue from this and have guidance around what we should be expecting as we work with end customers either to validate our Stereax batteries in their particular application, and they would pay for that validation and support through their certification process or if they have a specific need for a size or shape of a variation of our Stereax MVP to suit their particular application. Obviously, some of these in-body applications have very precise needs in terms of where they can be located and therefore, the shape of the device, and that plays back into the strengths of Stereax and how we can adapt to that. Underneath that, obviously, we're expecting royalty to come through as specified within our contract with Cirtec. In the short term, up to a volume breakpoint, that's actually a profit share. So we will get the larger proportion of any profit that's coming through from those batteries from an agreed price and -- sales price and cost price that we have within the contract. Unfortunately, that's covered under NDA. So we're not in a position where we can share the precise details of that, but that certainly protects us at those low-volume initial orders as they come through to make sure that we are getting a good return back. And then beyond that, at the very bottom, we actually have some carve-outs within the contract to make sure that we can offer the Stereax product to other markets or to very high-volume applications. That means that we won't lose out on any opportunities if they come along. And for any reason at all, Cirtec are not able to scale as quickly as that product demands, we do have the ability to issue additional licenses, and we would expect those to come with upfront license fees that would feed through. So giving lots of different opportunities, but really, that revenue starts from now with those first purchase orders as we announced yesterday for the cathode deposition process. Graeme Purdy: Great. Well, that covers the update for Stereax. So let's talk a little bit about Goliath now. Contrary to a lot of the media headlines which you may be misled by, actually, the sales of EVs have continued to grow in 2025 as the sales of traditional vehicles, ICE vehicles, so internal combustion engine vehicles continue to decline globally. Here in the U.K., and I know a lot of our shareholders are based here in the U.K. last year, 23% of new car registrations were for EVs. In December, that had actually peaked at 32%. And the majority of new vehicle registrations, if you combine hybrid electric vehicles, so mild hybrids and plug-in hybrids and full EVs, actually, the majority of vehicle sales were made up by those different categories. So continuing to grow. And also on this slide, you see the forecast from the Office of Budget Responsibility, OBR, here in the U.K., expecting despite some of the maybe slightly confusing legislation that was brought through in the budget, still an expectation of the rise of electric vehicle penetration as we go forward in time. And by the time you get to 2035, actually the majority of vehicles on the road, so total car stock then being EVs. However, we should also recognize that there are some headwinds, and they're particularly strong in the U.S. where the current administration isn't offering the same level of incentives for EVs as we've seen with the previous administration. And that's led to some turbulence in the market. But the longer structural growth drivers remain intact. And I think the key thing here to recognize is that Goliath technology offers a differentiated approach for European and North American manufacturers who are looking to differentiate the product that they're making from the dominant Asian offerings that are out there at the moment. So the reality is a lot of the people who are building gigafactories at the moment have taken a license to established Asian technology. And I think that's an entirely rational approach when you first want to set up a gigafactory. You want to make sure that the technology is stable and that you can then use it to good effect, but that's not a sustainable business model because actually, you're reliant on tariffs in order to protect your business from low-cost efficient Asian competition. And if you want to differentiate your offering, you have to look to new technology. And that's really the USP for working with companies like Ilika is that you can come up with an offering that gives you a sustainable competitive advantage. Now in addition to that, I also wanted to mention European demand in aerospace and defense. You're seeing substantial growth in this sector for related battery technologies. And that's really driven by increased defense spending where budgets have been ramped up, the remorseless electrification of defense platforms. Just in the same way that we as consumers are seeing the electrification of a lot of our domestic appliances, you're also seeing that in the defense industry. There is a need for portable power, i.e., being able to use these devices in the field. And of course, there's a strong argument for having some strategic autonomy where perhaps some of the alliances that there might have been historically are not looking as strong and dependable as they might have been. So some interesting non-EV applications for the technology. Just to reiterate why anybody should be interested in using Goliath in an EV. We've done some great modeling work together with a company called Balance Batteries here in the U.K. They are pack designers. And they looked at putting in Goliath batteries into a state-of-the-art EV and seeing what the effect would be from an economic perspective and also a performance perspective, and they calculated a reduction in the cost of the battery pack of GBP 2,500 relative to the battery technology that's used currently. So those of you watching in color, about $3,000, a weight saving of up to 20%, and that correlates to a range extension of that order of magnitude because, of course, the light of the vehicle, the further it will go for a given amount of energy and 1/3 of the charge time. So a drop from 18 minutes to 12 minutes on a 10% to 80% state of charge. So a saving of 6 minutes there, which makes a big difference. And there's a reiteration on this slide of that validation that we got of our 2-amp-hour prototypes that we'd sent out last year for validation. They performed to specification, putting them in that leading cohort of solid-state batteries. So that supports the further engagement that we've had with that particular Tier 1 and others with our latest release of 10-amp-hour prototypes. So I promised you a picture of what some of the equipment looks like at UKBIC. There's actually a photograph of an operator maintaining an impeller on one of the mixing vessels. So you see the massive scale at which this equipment operates. Really important that we can demonstrate that our technology is compatible with that scale of equipment, and that gives our customers a lot of comfort that the process technology that we've developed is easily deployable in an existing gigafactory. So as part of the work that we did with UKBIC, we successfully coated an electrode electrolyte composite. So the way that our solid-state batteries work is that we have a coating of our electrolyte on the anode. We got a higher manufacturing yield than we saw on our own pilot line. Sometimes the reverse is true in other technologies, but not here. We've seen actually that as you go to a larger scale on this quite sophisticated equipment, you actually get an improvement in yield. And also, when we tested the batteries, we actually found that, that increase in quality gave them a higher capacity and the faster charging protocols. So very broadly positive outcomes from that scale-up work. And the fact that standardized gigafactory equipment can be used, it means that there's no real demand for replacing the existing manufacturing equipment that's used there. You've got a reduced risk when you deploy our technology. And you've got that yield increase and cost reduction and yield is so important in this sector to make sure that you've got a sustainable economic model. So in terms of what you could expect going forward, I mean, there's been a whole raft of milestones that we have achieved in 2025 that gave us consistent and regular news flow that we could use to keep our shareholders apprised of progress. But it's given us a strong platform for more news to come in the second half of the financial year through this year and onwards. We're waiting for that customer feedback on the 10-amp-hour cells for the applications that we have distributed these batteries for, so EV and non-EV. So samples went out to a broad range of different companies. We expect actually to get some further grant support for testing and validation of our technology. So that goes a long way to offset some of the ongoing R&D costs that we've got. And then once we've got that validation of our products, we're in a position to progress the discussions with our target customers about what their minimum viable product might be for a generic A sample in the case of the automotive industry, that's what they're called, to define that, get them shipped and evaluated and then in due course, to allow us to enter into exactly the same sort of manufacturing relationship that we've got for Stereax. And this is what the scale-up story looks like. Just to reiterate that we do not anticipate manufacturing Goliath cells at a larger scale than pilot line scale. We believe that, that larger scale manufacturing is better done together with a manufacturing partner because, of course, if you're a big automotive OEM, you really want to make sure that you've got a low-risk supply chain. So it's far better that we partner with a manufacturing-focused organization that's got an established relationship with an OEM so that we can leverage their expertise and give them comfort that the technology is being delivered, the product is being delivered in a reliable manner. But of course, that opens the licensing opportunity window for us. Now that we've started shipping these 10-amp-hour cells, we're in that green zone that's pictured at the top there as we go through the next stages of scale-up and development together with one or more partners and then transfer the technology into a gigafactory environment. So Jason, perhaps talk through how we've built up that revenue projection with an increased number of customers relative to the last time that we spoke. You can see that we've now got 27 NDAs evaluation agreements in place. Jason, over to you. Jason Robert Stewart: Thank you, Graeme. A very similar story to the Stereax side of the business and the revenue buildup that we looked at slightly earlier. So made up of four different elements. Here, once again, we -- the first element has already commenced, and that's grant funding, so that's that top section. And grant funding has been a really important element for us, not just because it is non-dilutive share funding. So for every pound that we can deploy, half of that cost on average is covered by grant where we've been able to secure grant funding to be able to support that particular work package. And we'll touch on the financial results in a moment, but we have continued to secure new grant funding projects as we have gone through the first half of this year, and we'll continue to do so. So we see that as a continuing point. The other element around those grant-funded projects is they are also an incredibly good way to engage with the automotives and Tier 1s because they are also looking to collaborate through those grant-funded projects as a way to evaluate new technologies. So as we move through the cell design, that MVP section and start to look at the benefits and delivering those in the pack and module, as Graham touched on earlier, where some of those benefits for ourselves really come out, we've got good interest from automotives and Tier 1s in doing grant-funded projects around that type of activity. So it's a really important way for us to engage with those key potential customers as we go forward. Underneath that, there's a very small element of nonrecurring engineering for the Goliath product. The reason for that is that while we've designed a format of pouch cell, we designed that really around a commonality with the UKBIC so that we could scale up using the equipment that the government has got in place and Graeme talked about earlier to prove that our cells work at giga scale. However, each individual auto company or Tier 1 manufacturer may have slight variations to fit their pack and module designs. So we expect that if we are to change our design slightly to fit their particular needs as we enter into that licensing point that we would be able to receive some funding from them to be able to do that piece of work. Obviously, we then have battery works revenue. Now that does take a little bit of time to start building through in volume with the automotive side of the business, very much because of the time to build through that demonstration of A, B and C samples that Graeme showed on the previous slide as the automotive or Tier 1 deploys that in their own gigafactory and gets that into their vehicle platform and on to the fore. But really, as you can see, towards the end of the period, as volume picks off, that's where really large volumes of income start to come through. And underneath that, the last point then, but potentially the largest income generator in the short to medium term is licensing income. So as Graeme talked about, we're in that green window for licensing discussions. We would expect those licenses when we secure them to have a number of stage payments against performance. And the expectation there is that will be tied to those A, B and C sample points that we showed on the previous slide. So really, that's around looking for an option to evaluate at that A sample point. So when we lock down our MVP, which we're looking to do in the near future and look for those partners, then as we transfer that same sized product into the automotive's own pilot line, that would be classed as that B sample and they produce it under that license, that would trigger another stage payment. And then finally, as it goes to what's called a C sample, and that's the point when it's made at gigafactory scale that would deliver a final stage payment on those license. I would expect a couple of licenses in the automotive sector, but also opportunity for licenses outside of that, along with those other applications that you can see in the top right-hand corner, so potentially supporting defense or consumer electronics. So that gives a real buildup of how we expect Goliath to develop some revenue as we go forward. In terms of the half year results that were in the announcement, our turnover is GBP 0.6 million. Now that is down from the previous year. And really, that's to do with the timing of the grant funding. So for those that have followed the business, during this point last year, we had two grant-funded projects, that was HISTORY and SiSTEM, which were coming to the end, and they had finished by January 2025. So you saw more of the revenue in the first half of the prior year. And this year, you're seeing the commencement of our PRIMED project, which we secured. So there's more to come from that revenue as we go through into the second half. So you'll see that equalizing and then moving ahead as we move into the second half. So those secondary bullet points there just confirm that, that really is the grant funding movement that you've seen coming through. The EBITDA loss has increased year-on-year at the half year point, and that really is a reflection of two elements: one, that reduction in turnover, but also on the Goliath side of the business, as we've ramped up from those P1 2-amp-hour products into the P1.5 10-amp-hour items, 5x energy. There's 5x as much active material going into those. We're consuming much more from a materials point of view as we produce those prototypes, and we expect to do that as we go through. We have to make these larger sales for the potential licensees to evaluate. So that's part of the journey that we're going on, which then leaves us with a cash balance at the half year-end of GBP 6.9 million versus GBP 10.1 million. But I would point out, as you can see in the accounts that were published, we have a significant R&D tax credit that is paid out through the latter half of the calendar year. And that was received shortly after the close of the half year results. So that helps to bolster the cash position up further and give us a longer runway. Graeme Purdy: Thank you, Jason. So just to wrap up the formal part of the presentation, I think five great reasons to think about continuing to invest in Ilika. First of all, we have a really strong patent portfolio, a lot of know-how in the business about solid-state battery technology, which is a really exciting deep tech sector to get involved in. We're diversified across multiple markets, so two main market sectors with a near-term route to commercialization. We've got a set of fabrication facilities, so pilot lines that are able to support technology licensing and partnerships and validate scale-up plans. We've already got a licensing and royalty agreement in place with Cirtec to deliver economy of scale and our ability to ramp production to feed product to customers of Stereax. And finally, we've successfully shipped Goliath prototype batteries to OEMs and Tier 1s who are interested in the product as an early indication of adoption of that technology and commercial rollout. So many thanks, and we will shortly move over to Q&A. Operator: [Operator Instructions] I'd like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed by our investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Graeme Purdy: Thank you. So first of all, many thanks for such an array of questions. We've got a really interesting set that we are going to do our best to answer as completely as we can. So the first one is, who do you see as your biggest competitors? And what is the risk of superior innovations taking market share? Great question to kick off. So there are two types of competitors, really. The first one is incumbent battery manufacturing companies who are innovating their existing traditional lithium-ion technology and trying to improve that, either with a solid-state alternative or perhaps just a better liquid electrolyte-based lithium-ion cell. And then on the other hand, there are technology developers who are similar companies to us who are looking to either enter the market with a new manufactured product or to license the technology in the same way that we do. So biggest companies, well, look, the incumbents in this sector for manufacturing batteries are Chinese and Korean and Japanese companies like BYD, CATL, SK On in Korea, Samsung SDI, LG Chem and Panasonic. And so you see these guys being very active in the sector. And then technology innovators, technology developers, you've got some highly valued U.S. competitors such as QuantumScape and Solid Power and also some privately held companies. And what I would say is that a lot of these offerings are differentiated from each other. So the solid-state umbrella term is very broad. And just as you get quite a bit of diversity in standard lithium-ion cells, you've got different types of solid-state batteries. And the choices that you make around the materials combination for these different types of batteries have a direct impact on the performance of the cells and therefore, the benefits that they give the end user. And there's actually quite a bit of diversity in normal lithium-ion battery technology, the batteries that go into consumer electronics and consumer appliances are often very different to the batteries that might go into stationary storage or EVs. And even within the EV sector, there are different types of chemistry that are being used there. So what I would say is that although there are different offerings, there will be applications for the different types of solid-state battery that are developed. And so because it's a rapidly growing market, I expect that most of the technologies that have got merits and unique properties that differentiate themselves will be adopted for different applications. So I'm not worried too much about market share. I don't think there's going to be one battery to rule them all. I think there are going to be different segments where these batteries can be deployed. Jason Robert Stewart: Okay. We've got a question here. When will the company start making money? Well, as I've already talked to, certainly revenues from commercialization on the Stereax side of the business will flow almost immediately as we start that cathode deposition process. And that really is, I can't stress enough, an important inflection point for Stereax side of the business as that really rings the bell to say we're making product and that's feeding through into the various different processes that Cirtec now completes through on the back of that before product then comes out through that. Now as with all of the batteries that we are developing and producing, part of the success of those is underpinned by having a data set that really displays that those batteries can be proven to do exactly what we say on the tin. So it will take some time for us to have all of the data required to support that as we go through. But we do expect certainly on the Stereax side once again, that we'll start to see low volumes of product sales, so actual battery sales starting to come through before the end of the 2026 calendar year. So really then we've completed that commercialization of the product, and then it is about supporting Cirtec and the ultimate end customers as they get those batteries into their devices and ramp up their own development processes and whatever verification and validation process they need to go through, depending on the class of device that those go into. On the Goliath side of the business, obviously, we've talked about revenue coming from grant funding, but that isn't really commercialization of those batteries on the Goliath side. And that really comes down to as we move through this year, we will settle on that MVP that we talked about and look for how we can get those into production with partners. Now as Graeme has talked about, although the automotive sector has some headwinds against it, those other markets that are opening up may give us a much shorter window in terms of being able to get some commercialization happening with those 10-amp-hour cells, which are the perfect size for some of those ancillary applications that Graeme talked about. So really, this year gives us a great opportunity to start seeing money coming through on both sides of the business. Graeme Purdy: So the next question is with the development of M1000 cells, so this is a larger capacity design of Stereax cells that we've talked about previously, will Cirtec be able to produce these on current equipment alongside M300? Or will new equipment have to be installed? So this is a great question. The prototyping work that we've done so far has indicated that it is possible to make M1000 cells using the same process that we currently deploy for M300. So effectively, these are larger capacity, more energy dense cells. So they have more appeal for certain power-hungry applications. However, we are still reviewing whether there are process changes that would give a more price competitive product based either on operational yields because we can get a higher yield using a different process approach or whether the actual process itself is intrinsically cheaper than the process steps that we've defined for M300. So we haven't yet finalized the process flow sheet for M1000s, and that's an ongoing piece of work. But our game plan is to commercialize and roll out M300s first and make sure that we capture all of the learnings from that product launch before we invest further in any changes to the process for M1000s. Jason Robert Stewart: Okay. We've got a question here. Are Ilika in discussions with any companies about using Stereax for AI glasses? Well, as I'm sure you can imagine, any sort of deep technology development for a consumer product is covered under nondisclosure agreements. So we can't specifically talk about anyone that we are talking to. But we can say that we have lots of interest about a range of applications and not all of those are just in the med tech space. Some of those are in the small consumer electronics space. So there is definitely interest in the size, shape and power of the Stereax batteries for being able to supply those small devices that you can imagine might suit that application. So it's a difficult one for us to give any information on as it's tightly covered. But it's safe to say we are exploring as many opportunities as we can with companies, and we have some strong relationships in those sectors. Graeme Purdy: Then the next question is, are Ilika in discussions with any companies about using SSPs in mobile phones or as portable battery packs? So just for clarity, the technology platform that's relevant for these applications is Goliath. Of course, we have focused the Goliath development on the EV objective, which is what we receive grant funding to deliver. However, we have talked about some ancillary markets that we can address. And mobile phones is an example of consumer electronics, which would benefit from having solid-state batteries. And perhaps more pertinent to defense applications, portable battery packs are definitely an application area, too. So it's absolutely key to make sure that the USPs, the unique selling points for our solid-state batteries are relevant to these applications, and we believe that they are in some respects. And therefore, we are validating the commercial opportunities for these deployments as part of the overall commercialization strategy that we're rolling out. Jason Robert Stewart: Okay. For the next -- I'm actually going to take the next two questions as they're almost identical, one for Stereax and one for Goliath. So I shall attempt to cover them both off with one answer. So the first of those two questions is, what has been the initial feedback from Cirtec customers using Stereax? And the second question is, what has been the early feedback from customers about the 10-amp-hour Goliath batteries? So both of these relating to the deliveries that we announced just before Christmas at the end of December. And the answer for both is very much the same in that batteries need to be assessed over a period of time by the people that are evaluating them. So there's no immediate answer other than the thanks for fulfilling the backlog to get those cells, Stereax or Goliath, into their hands. But we are in close communication with the companies that we've delivered those to, and we will gather that feedback as they have worked to integrate them into their own testing systems and then as they cycle and run them through. And once we get that information and get that feedback, then we will look for the appropriate way in which we can feed that back to the shareholder base and to the wider market so that people can understand what that feedback is because it's always great to get external feedback and validation for our products rather than just our own information, which we can share. Graeme Purdy: The next question is, how confident are Ilika of agreeing licensing deals for Goliath during 2026? Well, look, the licensing window for the technology is now open. I think really the delivery of our 10-amp-hour prototypes fired the starting pistol on that particular race. We haven't just limited ourselves to saying that, that licensing deal is going to be concluded in this year. As you can see actually from the slide where we cover that, we would expect discussions to go on for the next 30 months or so. And obviously, we would push for an early licensing deal where possible. But for a deal of this magnitude, there's due diligence that's required. And so we expect that we will continue working on this opportunity throughout this calendar year. Jason Robert Stewart: Okay. The next question is, can you confirm the external pressure needed for your sales? For those that maybe don't understand that question, there are some circumstances where external pressure can be applied to cells, either cylindrical cells, pouch or prismatic cells to aid in the performance of those, and that varies based on the format of the cells and the chemistry within them. Unfortunately, we're not in a position where we can share that information. We're in discussions with the order customers around what they're looking for. And actually, some of those have differing needs around pressure for their different applications and how they put together their pack and module and part of our own development plans are pulling together lots of information to support those various different applications to help guide our customers and to gain better feedback on what works best, not only for our own chemistry set as we develop that, but also for the customers and how they wish to integrate that within their packs and modules. Graeme Purdy: Mindfully done, Jason, I'd maybe just add to that response that the application of external pressure can improve the cycle life of both lithium metal and silicon anode-based designs, they're aware of that. But of course, the downside of applying too much pressure is that it becomes a difficult engineering challenge. You don't really want to have a battery pack in your vehicle that needs a substantial amount of external pressure applied. So we are optimizing our cell architecture to try and keep that pressure to a level which is economically viable within the context of mass production vehicles. The next question is an interesting one. What do you make of recent claims by Donut Lab? Well, this is a question that we've had quite a lot actually since CES. Congratulations to Donut Lab for managing to monopolize the conversation in the battery sector over the space of a few days. Look, I mean, there were some fantastic claims. It felt a bit like the clock had been rewound to 2019 when a lot of companies were claiming spectacular performance for their technologies. I think if you read a lot of the industry analysis and informed commentary on the technology, that it is unlikely that all of the claims will be substantiated and it appears to be more a technology which is derived from capacitor technology rather than straightforward what we'd consider to be battery technology. So capacitor technology is capable of delivering large pulses of energy of electricity. But typically, capacitors are not capable of storing energy over long periods of time. So there may be downsides, which become apparent in due course once you get external validation by independent authorities or potential customers of this technology. And I would say that to all appearances, it appears that there is quite a long time line between now and such technology being commercially ready. So probably not one to worry about too much in the short term. Jason Robert Stewart: Mindful of time left in the broadcast. If I handle the next one, which I think might give us a sort of a suitable landing point, there's a question here, what's your commercial plan for '26 for Stereax and Goliath. And I've also seen another question later related to what milestones should we be looking out for if you're monitoring the company and what we're doing in 2026. And if I just take you back almost to the beginning of the presentation to when Graeme started, if I can get us back to the beginning. And really, it's the section here in the dotted line. Those are the milestones. Those are the things that you should be focusing and looking for us to deliver against to show that we are delivering continued steps against our plans for rollouts, both at the top there for Stereax in terms of getting integration into the Cirtec development board. And that really unlocks our ability to work with Cirtec for some of their bigger customers that perhaps we haven't been able to interact with before because that gets the Stereax battery integrated into an electronic evaluation board that eases its adoption and evaluation by potential customers through to then revenue starting out from deliveries by customers. And then on the Goliath side, those other steps that Graeme once again talked through in terms of feedback from those 10-amp-hour cells that we talked about that we delivered and will continue to be delivered, landing on the feedback from that and how that feeds into the MVP as we go through the second half of the year. Graeme, I don't know if there's anything you wanted to add. Graeme Purdy: Thank you very much, Jason. No, I think we've had our allotted hour. I see that there's still some more questions that we haven't yet had time to address. What I will do, though, is go through all of those questions with Jason and if there are any that cover aspects that we haven't covered verbally, then we will draft an answer, and they will be published along with the rest of our answers in due course. So many thanks for your time today, guys. Operator: That's great. Thanks for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Ilika plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.
Operator: Ladies and gentlemen, good evening, and welcome to the UltraTech Cement Limited Q3 FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this call is being recorded. I now hand the conference over to Mr. Atul Daga, Business Head and CFO of UltraTech Cement Limited. Thank you, and over to you, sir. Atul Daga: Thank you so much. Good evening, good afternoon, ladies and gentlemen. Once again, a very warm welcome to yet another call on a Saturday evening for UltraTech for the third quarter results of '26. Before I begin, let me assure you, we will not make this a habit of spoiling your Saturdays, but this Saturday is worth spending time. Let me get on to the main core topic for discussion, which I have in mind today. Demand. That is the most important aspect for our business. Everything else becomes secondary and falls in line. And as we see the progress, government's focus on infrastructure is translating into a robust pipeline of new projects nationwide with several marquee investments announced across every region, translating into solid demand. You must have all read about it in the media in -- at different points in time, but let me put a perspective together in one place, region by region. In the North, Punjab is taking extensive road development initiatives, spending about INR 16,000 crores in its markets. New corridors have been announced in Delhi Metro for about INR 12,000 crores. Uttar Pradesh is developing 1,575 kilometers metro network across major cities. Of course, that goes till 2047. It's a long horizon, multi-city infrastructure pipeline, indicating sustained demand and significant opportunity for cement. Highway projects, continued investment in road connectivity and logistics corridor across the state, like the 4-lane greenfield highway project between a place called Barabanki and Mustafabad. Let's go to West India. Maharashtra is seeing a significant pipeline of large transport and mobility projects, signaling strong multiyear demand for cement and construction materials. Mega projects like the Uttan-Virar Sea Link, about INR 58,000 crores, Mumbai Metro expansions, Pune Metro, multiple lines and road concretization in Mumbai. Center clearance of Pune-Chhatrapati Sambhajinagar Expressway highway spanning 245 kilometers with a particular focus on improving connectivity for rural communities, nearly 350 kilometers of state highways, 2,577 kilometers of rural roads, some rehabilitation initiatives. All of these are going to boost urban cement demand. Expressways and ring roads, Nashik, Vadhavan, Bhandara, Gadchiroli, et cetera, add to further boost for demand. Gujarat's 9 high-speed corridors covering about 800 kilometers are fast tracking connectivity and will add further. Cabinet has approved 2 major highway projects worth INR 20,000 crore plus, Nashik, Solapur and one more, signaling continued momentum in India's integrated high-speed connectivity push under the PM Gati Shakti. Stepping down into South India. Bangalore is undergoing a major mobility transformation with the metro network set to expand from 96 kilometers to 175 kilometers by the end of December '27. Karnataka government has unveiled an urban infrastructure program longest -- which will have longest 40-kilometer twin tunnel, a 41-kilometer double decker metro, 110-kilometer elevated corridors. Center has approved INR 10,000 crore expansion of 4 key highways measuring about 273 kilometers, which will improve connectivity across Telangana. New Mangalore Port has announced capacity expansion to handle 100 million tonnes by 2047. We can't forget the Eastern corridor. West Bengal has its own challenges, but is planning largest road initiatives, about INR 8,487 crores program, 15,000 kilometers of rural roads, 5,019 kilometers of urban roads. All this just goes to say that India is developing very fast. Bihar is rolling out 3 major Ganga Road projects worth INR 70,000 crores. Digha-Sherpur, Bihta-Koilwar, 35 kilometers; Munger, 42, Sultanganj-Bhagalpur, 41. So I'm not advocating or speaking on behalf of NHAI, but this is what the story is surfacing. Chhattisgarh. Center has approved 774 kilometers roads covering 2,000-plus kilometers under the PMGSY-IV. The state has already completed 8,753 roads and bridges are also under the same phase. Major rail expansion across Maharashtra, Chhattisgarh, Gujarat, MP reflect the scale and diversity of investment underway. To give you a perspective, roads and highways require approximately 350 to 900 kilometers -- 900 tonnes per kilometer. With thousands of kilometers under construction or planned across all regions, this is going to be huge. Elevated metro requires 11,000 metric tons per kilometer. Underground metro requires anywhere between 17,000 to 19,000 metric tons per kilometer. Railways, 90 to 100 metric tons of cement, ports and airports go up to 50 kgs per square feet. Housing, if I were to look at low-income housing programs, affordable housing and rural connectivity projects sustained steady demand. With a strong project pipeline, demand for cement will remain very continuous and as strong as possible. Infrastructure is seeing the next big wave of growth. What does that imply? More jobs, more demand for housing and social infrastructure, i.e., schools, hospitals, commercial complexes, office and all. We are present across the country. Just to tell you about our RMC network, RMC network is about 163 cities, which we are already covering and rapidly expanding. UltraTech is so sweetly positioned to meet the demand like nobody else. We are witnessing growth -- unprecedented growth in new areas, new avenue like data centers, GCC, renewable energy projects, you name it, and things are happening. As somebody just said, India has arrived. It's the market with a population of over 1.4 billion people, youngest working class and an opportunity across the land bank for development. At UltraTech, we are fully geared up to capture these opportunities. Our approach remains rooted in disciplined execution, advancing our next phase of capacity expansion while ensuring every investment is backed by rigorous cost control and operational efficiency. In our fourth phase of expansion, large part of orders have already been placed, work has already commenced, and we will be on time. Importantly, we are funding all our growth through internal accruals, maintaining a prudent balance sheet and a healthy leverage profile. This, combined with our pan-India network and deepening retail footprint positions us to capture incremental demand at a very rapid pace while safeguarding our margins. You would have seen our leverage position this quarter end. On a consolidated basis, we are at 1.08x net debt EBITDA. I believe and I'm very confident that we'll reach the mark of 1x and be in 0.8, 0.9x net debt EBITDA by the end of this fiscal year. Integration of recent acquisitions is progressing very well with rapid brand transition. Kesoram and India Cements are ahead of the initial plans with brand conversion at Kesoram having reached 69% in December '25. And today, if we speak, it must have crossed further. India Cements has already crossed 58% at the end of December '25. For both these assets, we have begun our cost improvement CapEx program, which will result in benefits and will start reflecting in the P&L of January-March '27. At Kesoram, we have already spent INR 263 crores, committed about -- out of the commitment of about INR 382 crores. At India Cements, we have committed already INR 601 crores and spent INR 144 crores on the program. Talking about CapEx, the other initiative, cable and wires is progressing as per plan. About INR 500 crores worth of orders have already been placed. We have spent INR 197 crores. Team -- 30% of the team -- planned team is already onboard, civil work has started, and we are on schedule to see the launch of our product in the October-December '26 quarter as was committed earlier. Talking about our efficiency improvement program, we continue to deliver solid and measurable results. In fact, now I am very confident that we should be doing better than what we had committed. We shall give an exact quantification and financial impact with our annual results for the year. However, you would have noticed the lead distance has dropped to 363 kilometers. The clinker conversion factor is down at -- has improved to 1.49. The most important factor, I believe, for us is to have a strong demand pipeline. And you will notice that January-March quarter, God willing, we will operate at more than 90% of our existing installed capacity, clearly demonstrating growth in the trade markets as well as non-trade markets. If the demand is good, everything else falls in line. Ultimately, it is about the bottom line where it comes from, doesn't really matter. Quite often, everybody is focused on cement prices, which has remained subdued post GST change. September -- last week of September, October, November saw some softening prices. But with growing demand, we are witnessing improvement in prices in all segments across the country. There have been cost increases in the cost of pet coke and coal, new labor code will have its own impact, rupee depreciation. All these will have an impact on the cement industry. And obviously, there is reason to pass on these cost escalations into prices. We are very confident of a very bright future for the next quarter and after that quarter and after that and after that. That doesn't mean I'm restricting myself to a fiscal '27, but the story is far longer. As India embarks on the next decade of development, UltraTech is proud to play a pivotal role in building the nation's future. We remain confident that our strategic initiatives in building capacities across the country in critical market locations, coupled with sector's positive outlook, we will continue to deliver growth faster than the industry. And we welcome all of you to participate in our journey. Don't miss the bus. Thank you, and over to you for questions. Operator: [Operator Instructions] The first question is from the line of Amit Kumar Murarka from Axis Capital. Amit Murarka: Congratulations, Mr. Daga, firstly, for a great result. I don't think anyone expected both volume and the margin beat actually, which is quite heartening to see. Just on pricing, wanted to get a sense from you, like there is a lot of industry capacity addition that is going to come through this year. What do you think I mean industry's stance will be in this kind of a high expansion scenario? Atul Daga: The reason I talked about all the demand footprint and demand new initiatives, I think cement will easily get absorbed. And if the demand remains strong, we will not see any problem in prices. Amit Murarka: Okay. Okay. Understood. Sure. And just also on India Cements, like in Q3, I see that the EBITDA per tonne was about INR 400. You had earlier guided for INR 1,000 exit in Q4 '27. So most of this improvement will be through cost? Or will there also be some pricing required to achieve that... Atul Daga: One second. Amit so it was Q4 '27, not '26. Amit Murarka: No, no, '27 only. I meant '27 only, so 1 year down the line. Yes, sir. Atul Daga: So what will happen is the brand conversion, which has already taken place, actually, had the brand conversion not taken place, the performance would have been not where it is today. Balance almost 40% or 45% of brand conversion has to be completed and prices are going up in the southern markets as well. Further, as I called out, the CapEx program has begun for efficiency improvement. We will have -- so we have to have all the players playing the match in a positive manner, prices, efficiency improvement and capacity utilization. All of them will deliver as planned. Amit Murarka: Understood. Yes. And lastly, just if you could give the CC ratio for the quarter. Atul Daga: Sorry, what? Amit Murarka: The cement clinker ratio, what was it in the quarter. Atul Daga: 1.49. Clinker cement ratio, 1.49. This quarter, 1.49. Amit Murarka: Okay. That's all from. Best of luck. Atul Daga: Yes. Operator: We have the next question from the line of Pulkit from Goldman Sachs. Pulkit Patni: And I echo Amit's views that these are good numbers. And on a lighter note, your opening remarks sounded a lot like the budget speech. But sir, I don't see the capacity addition plant-by-plant guidance for Q4 and for the next 2 years. Just the numbers around how much capacity would be added in Q4, how much in FY '27 and FY '28, that will be helpful. Atul Daga: So we should have approximately 8 million to 9 million tonnes more coming in this quarter. And the balance, I think, 16 -- sorry, 12 million tonnes in fiscal '27 and then balance remaining will be in '28. Pulkit Patni: Perfect. Atul Daga: And I'm very much -- Pulkit, I'm very well entrenched in the private sector, no -- I'm not ambulating anybody, all right? Pulkit Patni: Sure, sure. Operator: We have the next question from the line of Jashandeep Singh Chadha from Nomura. Jashandeep Singh Chadha: Congratulations on a great set of numbers, sir. And I must start by saying that the information and detail that you gave on the project is much better than most of the department who are actually working on those projects, I must say. So my first question is you have covered most of the demand aspect and in a lot of detail. Just wanted to shift the focus on rural demand. So how was rural -- how has rural demand recovered in third quarter? How are you seeing in the fourth quarter? And what are your expectations for the year ahead? And just related to that, any expectation from the budget for the cement sector or anything? Atul Daga: Okay. The last question first, I don't want any -- I won't comment on that. That's the easiest answer. Rural demand, I think if you -- simple way to look at rural demand is look at our trade ratios. If our trade ratios remain strong, rural demand is equally buoyant. We are not witnessing any depression in rural demand. Q4 also will be solid is what my expectation is. Jashandeep Singh Chadha: Understood, sir. And sir, on the cost saving front, we have -- UltraTech has given a target of INR 300 to INR 350 per tonne over the next couple of years. How is it -- I understand it's very difficult to tell the details quarter-by-quarter, but if you can give us the sense how much of this has been realized? And how much of that will be coming in the coming quarters? And also, apart from the freight and the... Atul Daga: Wait, wait, wait, I'll forget your questions, wait, let me address this question first. So you're asking 2 things in the same question. First, you are saying it is difficult to quantify and then you are saying quantify. So please have mercy. So you will see -- no, it's very difficult and it's not logical, Jashandeep, because July-September quarter will be weak, so costs can go up. January-March will show extraordinarily high delivery. So it is best to see the results on an annual basis. Now to give you directions on how things are moving, and we had given our program with item details and with the targets. I recall we had mentioned with the base of 400 kilometers of lead, a 25-kilometer lead reduction, which would have taken us to 375 kilometers. We have already reached 363 kilometers. So it's not only the lead distance, which helps, there is a lot of other initiatives which the team is taking, which helps to take efficiency improvement. Similarly, we have taken a target of clinker conversion factor of 1.54. We are moving on that direction. In 1.54, we have reached 1.59 -- 1.54, we have reached INR 1.49. So you can see -- you can do your own math, but it will be best that we do this math at the end of the year. All I can say is we are moving and -- in line with the target set. Last year, full year, we had delivered about -- on those quantified measurable targets, we have delivered INR 86 per tonne. My guess is we should be crossing INR 100 mark on those efficiency improvement programs in this financial year. Jhanwar-ji, you want to add. Yes. Kailash Jhanwar: Yes, I think Atul has already explained because it's not item-wise see, we have moved from clinker conversion from 1.45 to 1.49, and we are still away from our target actually. And if you talk about the renewal energy, our renewal energy has gone to almost 41% kind of thing, and it is further likely to go to 60% going forward actually. So I can say that fundamentally, we are by and large, on track because quarter-to-quarter, we have seen in 1 quarter because of the cyclical nature of the industry, we may be up and down. But year as a whole, I think we are very much on the right track. Atul Daga: Thanks, Jhanwar-ji. Jashandeep Singh Chadha: Just one last, if I can squeeze in. Any impact of increasing input costs you are seeing in fourth quarter? Atul Daga: You tell me where the dollar will be in fourth quarter. That is one. So it's very difficult, but I think we are managing our middle line very well. You would have seen our fuel costs have remained at INR 1.8 per kcal in this quarter. I don't expect the cost to go up. Raw material costs are already matured. These are the 2 big cost items, maintenance costs, which spikes typically in July, September will be normal maintenance costs in January-March quarter. Jashandeep Singh Chadha: Understood, sir. I'll join back the queue. Atul Daga: Thank you. Operator: We have the next question from the line of Rahul Gupta from Morgan Stanley. Rahul Gupta: Again, sorry to echo again, a very good set of numbers. You talked about cost inflation and improved demand will support cement prices from here on. Now it looks like the infra demand is coming back, which should drive low pricing non-trade segment higher. Does that mean that even if cement prices move up, realization may remain under pressure over the next year or so? Any color on this will be very helpful. Atul Daga: So firstly, Rahul, I like the echo that you talked about. Always good to hear good performance from as many people. Coming to your first question, even if infra demand is going, non-trade prices will also harden. So I don't see any reason why there should be any problem. There have been -- in fact, if you go back 2 or 3 quarters, the gap between non-trade and trade prices had narrowed dramatically. Rahul, are you there? Hello? Rahul Gupta: Yes, yes. No, this is very helpful. I don't have any other questions. Atul Daga: Thank you. Operator: We have the next question from the line of Pinakin Parekh from HSBC. Pinakin Parekh: Sir, again, many congratulations, very good number. We understand that demand and pricing both have improved in January. But to go back to what happened in the December quarter. Now we understand that in the last 2 years, there have been multiple acquisitions done in Southern India, you and other industry players, expectations of Southern India pricing seeing more stability with upward bias, but somehow that has not taking place. What in your view needs to change in industry dynamics in South for pricing to be more stable with upward bias? Atul Daga: More demand. I think demand is opening up, and I have -- I stand by my statement South will be new north. That doesn't mean North is going away anywhere. North is stronger and stronger. South is witnessing large institutional demand, the Amravati City project, which is going at its breakneck pace, the IT complexes, complexes which are coming up, data centers which are coming up, which are so cementitious in nature, highways, et cetera, that we have talked about. And the young population in these IT hubs will demand more housing and more social infrastructure. So I'm not talking about 1 quarter, Pinakin, but I am -- as we as strategic players are looking at a long-term stability and reliability of the sector. Pinakin Parekh: Got it, sir. Sir, just to follow up in your view and given where -- what the position UltraTech is at, if finally the institutional demand, as you highlighted, starts coming up in a big way in Southern India, can 2026 see a break in terms of South India's historically volatile cement pricing? Or do you see this as something evolving more over the next 2, 3 years? Atul Daga: I think '26 will be a fabulous year. Pinakin Parekh: Got it. Got it. Atul Daga: Thanks, Pinakin. Operator: We have the next question from the line of Ritesh Shah from Investec. Ritesh Shah: Good numbers, congratulations. Sir, 3 questions. One is, would you be able to spell out industry demand growth for Q3 and 9 months? That's the first one. Atul Daga: Don't hold me to it, but we would expect anywhere between 9% to 10% all-India demand. Ritesh Shah: Sir, would you speak for Q3? Atul Daga: I was talking about Q3 literally. Ritesh Shah: Yes, yes. And sir, for 9 months? Atul Daga: 9 months, maths has to be done. 2.5% plus 5%. Kailash Jhanwar: For the year as a whole must be about 7.5% kind of thing. Atul Daga: 6.5% to 7%, 9 months. Ritesh Shah: Sure. Sir, my second question is, basically, if you could provide some detail around sourcing of fly ash and slag. What are the sort of nature of contracts that we have on tenure and how is the pricing that's trending? Atul Daga: So one is there's enough new supply coming up. Power plant capacities are going up, steel plants are coming up. And we have a mix of long-term, short-term domestic and import supply -- import sourcing, fully secured. Ritesh Shah: Sir, so putting this demand aside, if we had to improve a clinker factor, is there any limiting factor? Atul Daga: No. No, none whatsoever. Ritesh Shah: Okay. And sir, when you say imports, it means imports for both fly ash as well as slag? Atul Daga: No, slag. Ritesh Shah: Only slag, okay. That's helpful. Sir, third question on India Cements. Anything on non-core asset sale? That's one. And any thoughts on merger, basically simplifying the structure? Any time lines around that? That would be useful. Atul Daga: Noncore there are land parcels. Essentially, we just sold off the coal mining company in Indonesia. The monies have been realized, and that's how you see the debt remaining under control. There are a couple of big land parcels, which we are discussing with potential buyers. I would expect further generation of up to INR 500 crores minimum, which we should be able to get. We are now getting into the discussion -- not discussion, exploring the legal options in terms of there's an ED case, which is attached to the company -- to assets of the company are also attached. There's a property in Hyderabad and some financial securities, which are attached. We are seeking legal opinion what will be the implications of that case, and then only we'll take a decision further. Ritesh Shah: Sure. Sir, just a follow-up over here. I think just correct me if I'm wrong, for India Cements, you had indicated INR 144 crores spend out of INR 601 crores, are those numbers right? Atul Daga: Correct. Ritesh Shah: Okay. And sir, when we say non-core asset sales, incrementally, it's INR 500 crores. And what has been realized so far? Atul Daga: Close to INR 200 crores or INR 250 crores, close to INR 200 crores or INR 250 crores. I'll give you exact number. That's a very easy number. But INR 200 crores to INR 250 crores that you look at right from the beginning on, Ankit. Yes. If I can't give it on the call, I will -- you can reach out to, Ankit, later. Ritesh Shah: Yes, yes, and this is helpful. All the very best. Operator: We have the next question from the line of Satyadeep Jain from AMBIT Capital. Satyadeep Jain: Just one clarification question on the CapEx. Mr. Daga, you mentioned having 12 million tonne next year and balance in '28. Just wanted to clarify the phased 22 million tonnes that you've announced, all of that is likely to get commissioned in FY '28 given you've already placed orders? Atul Daga: Yes, please. Satyadeep Jain: Okay. Nothing still. As of now, you're not expecting anything to spill over into FY '29? Atul Daga: No, '29 is too far. Satyadeep Jain: Okay. Atul Daga: I would look at -- at best a delay by a quarter. Some project will get preponed and some project could push over to the next quarter at best. Satyadeep Jain: Okay. So in -- maybe in the next one, is it possible like historically, you used to have this quarterly -- or projection for when you expect capacities to commission for the next one that you have since you already have what... Atul Daga: Sure. Sure. Sure, we'll send it. We'll send it. Satyadeep Jain: And on the power cost, I see your captive power cost has been declining each quarter. Just what is driving that? Atul Daga: [Foreign Language] that is the average cost of power. So CapEx on the power, which has gone from INR 7.1 crores to INR 6.5 crores. Look, fuel efficiency is the only reason which I could think of, nothing more. Kailash Jhanwar: Yes. And maybe minus maybe from the coal mix. Atul Daga: Fuel efficiency essentially, nothing specific. Satyadeep Jain: Okay. Operator: We have the next question from the line of Ashish Jain from Macquarie. Ashish Jain: Sir, my first question is like all the demand... Atul Daga: My first question to you, Ashish, how are my numbers? Ashish Jain: Numbers of fantastic, sir, a lot of people have spoken about this, sir. I don't know if you had anything else on that. Atul Daga: Okay. Ashish Jain: No, no, that's it. [indiscernible] So sir, like given most of the drivers you spoke about, are all infra-led demand, right? And so can we see a change in mix moving from PPC to OPC, you think that will happen in the next 3, 4 years in the industry? Atul Daga: In fact, what we could see is intra demand converting to non-OPC also. There's a lot of strong advocacy happening, and there is a gradual conversion. You will know that most of the institutional players do the conversion or mixing at the project site. So instead of we doing it, some of them have started adopting and accepting the product from the cement manufacturer. RMC, we -- it's about 3% of our total volumes of cement and growing rapidly, where it is getting consumed, large portion goes to institutional markets. Bulk cement is going up significantly, which will help the institutional market, gives us better margins, right, so meaning the same margins improve. So that's very important. Ashish Jain: Sir, sorry. But in fact, that was the context of my question that if on-site blending is going up, can it mean that... Atul Daga: No, it's going down. No, no, it's going down. Ashish Jain: Okay. Okay. Because of RMC I think but... Atul Daga: That is what I talked about advocacy and there is a conversion happening, slowly it's happening. Ashish Jain: Right. Yes. Atul Daga: Okay. Hello? Are you there?. [Technical Difficulty] I think he lost the connection, take the next person, please. Operator: Yes. We have the next question from the line of Indrajit Agarwal from CLSA. Indrajit Agarwal: I have 2 questions, sir. Sir, first, can you highlight what is the spot pet coke price versus the booking levels in 3Q? Atul Daga: Around $118, $117. Kailash Jhanwar: $118, $119, ranging in the trend. Indrajit Agarwal: Sure. This is helpful. And second, in 3Q versus, let's say, a 3% kind of price decline sequentially, how would you split it between trade and nontrade? Was non-trade drop much sharper? Atul Daga: On-trade was sharper. Indrajit Agarwal: Sure. That's all from me. Atul Daga: Yes. Operator: We have the next question from the line of Raashi from Citigroup. Raashi Chopra: Sir, just continuing on the pricing question, where are we on pricing versus 3Q at the moment? Atul Daga: I think we are roughly INR 3 to INR 4 on a naked cement realization basis up. If cement realization is up INR 3 to INR 4, prices are up, it's somewhere around INR 6 to INR 8. Are you there? Raashi Chopra: Yes, I'm just trying to -- what I'm trying to get to is that you also made a comment, of course, on demand, but on that you will be able to pass on the higher cost impact in the form of better pricing. So... Atul Daga: I think what is happening is, I'm sold out. What do I do? So obviously, if I'm in a sold-out position, I have to service my highest paying customer. Raashi Chopra: Understood. Fair enough. Okay. Got that -- that one. Then just on -- again, on the capacity, is it possible to just for India Cements capacity, what would be the number by the end of '26, '27 and '28 in the asking... Atul Daga: 16.8%. Unknown Executive: 17.5%. Atul Daga: One sec, one sec, 17.5% or 16.8%? Unknown Executive: 17.5% not [indiscernible]. Atul Daga: So, yes, 17.5%... Raashi Chopra: Sorry, I didn't meant India Cements, I meant your Indian capacity not of Indian Cements. Atul Daga: Indian capacity. Which year, 234-point something. Unknown Executive: 235 by FY '28. Atul Daga: 235 by FY fiscal '28. Unknown Executive: India, I'm talking about. Raashi Chopra: Fiscal '26 and '27, if you have the number. Atul Daga: '26 should be 19.8%, 19.9% and then 10 -- sorry, 12 more million tonnes in towards '27, yes. We missed that chart, we'll circulate that chart separately. Raashi Chopra: Got it. And just on Kesoram in the second quarter, you had indicated the EBITDA per tonne was INR 755, what is that number in this quarter? Atul Daga: Would be around INR 600 this quarter, yes, INR 600. Raashi Chopra: And the full rebranding is still maintaining June '26, okay for now? Atul Daga: We should be doing it in time, yes. Because we have already crossed the 70% mark for Kesoram as we speak. And India Cements also, we have crossed 55%-odd thereabouts. I don't remember the exact number, but we are -- every day is a new high. Raashi Chopra: Got it. Understood, okay. Atul Daga: Thanks, Raashi. Operator: We have the next question from the line of Siddharth Mehrotra from Kotak Securities. Siddharth Mehrotra: Congratulations for a great set of numbers. Sir, just wanted to understand, given the strong volume growth we've witnessed this quarter, what is your approximation of UltraTech's market share going for this quarter? And sort of where do you sort of aspire to be, say, 2 to 3 years down the line? Atul Daga: I wouldn't know a number on market share, but if you see that we have been growing or our capacity utilization has been higher than the industry, then obviously, there is a gain in market share also. There's no published data available to capture that number realistically. And going forward, I expect to see the same trend. As for aspiration, there's no aspiration. I think we are looking at how India is growing, where the growth opportunity is, and we will keep growing with India's growth story. Siddharth Mehrotra: Got it, sir. And just coming back to consolidation, do you think there are additional targets which you would want to sort of look at just from a consolidating point of view so that you have better control on perhaps the industry dynamics as well? Are there any potential opportunities still under consideration, so over the next 1 or 18 months? Atul Daga: It's highly opportunistic. We would love to examine opportunities if they come to the table. Siddharth Mehrotra: Okay. But nothing is in progress as we speak? Okay, sir, then that's it. Atul Daga: Thank you. Operator: We have the next question from the line of Harsh Mittal from Emkay Global Financial Services. Harsh Mittal: So my first question is that what has been the clinker capacity additions till date in FY '26? And what will be the addition in quarter 4, this ongoing quarter? Atul Daga: 2 lines? Kailash Jhanwar: Yes, we have added 2 lines actually one is almost 10,000 TPD, yes, and translate into almost 3.5 million tonnes per year. And another one more line of 3.5 million tonne in Rajasthan. So it takes... Atul Daga: That's 7 million tonnes of capacity. Kailash Jhanwar: Yes. Atul Daga: And Maihar. Harsh Mittal: Sure. Sir, second question is what is the premium share this quarter? It's not been there in the PPT? Atul Daga: Oh, we misses that. premium share... Unknown Executive: 36%. Atul Daga: yes. Harsh Mittal: Okay. Operator: We have the next question from the line of Andrey Purushottam from Cogito Advisors. Andrey Purushottam: [Foreign Language] And I wanted to ask, when I was going through the presentation, I found that your EBITDA is up considerably. And -- but your costs, some have gone up, some have gone down, right? Your raw material costs have gone up and your fuel and logistics costs have gone down. Now given that your net realizations are also slightly lower, can one assume that the increase in EBITDA is almost entirely out of operating leverage? And if that is the case, if you're adding 8 million and 12 million tonnes capacity in the next quarter/next year, respectively, what can we see as the trajectory of -- and the effect of operating leverage going forward? Could you just lend some color on that? Atul Daga: So operating leverage, obviously, will keep on playing a positive impact on efficiency improvement. Second point or the first point that you asked, obviously, prices were a dampener on the profitability, but volumes, which gave me operating leverage and cost management, very efficient and tight cost management. Of course, you cannot manage all the line items of cost, but the management team's focus always remains on running a very tight P&L. So that's what is reflected in the performance in the quarter. Kailash Jhanwar: And the third one you asked about the raw material pricing. It's the -- obviously, the clinker conversion ratio has improved. So the raw material price will definitely increase, but the benefit we will get partially in the power and fuel side. Andrey Purushottam: Okay. So we basically should see an increase in EBITDA per tonne over the next 15 months? And... Kailash Jhanwar: Definitely, without a doubt. Andrey Purushottam: And would there be a numerical guidance that you would be able to provide in the range or that's not... Kailash Jhanwar: No, we don't give guidances. Andrey Purushottam: Okay. Operator: We have the next question from the line of Girija Ray from YES Securities. Girija Shankar Ray: Congratulations. This is a superb number I can say, which is beyond market expectation. So sir, my question is related to employee cost. Is this a one-off for this quarter? And second question, can I expect INR 1,100 to INR 1,200 kind of EBITDA per tonne for fourth quarter? Atul Daga: To your second question, we will do much better than what we did this quarter. I don't want to get into any specific number. And 916 employee cost going up Y-o-Y -- because what happens is our annual increases -- compensation increases that take place would reflect... Unknown Executive: Plus new plants. Atul Daga: And new plants, of course, new capacity getting added. That is what will reflect in this cost. What you ideally should compare, if you look at Q2, you will not see dramatic movement. Girija Shankar Ray: Okay. And thanks for saying this -- that fourth quarter, we'll be doing a very good EBITDA per ton. That's all from my side, sir. Atul Daga: Thank you. Operator: We have the next question from the line of Navin Sahadeo from ICICI Securities. Navin Sahadeo: Of course, congratulations on the robust volume growth that you have demonstrated. Two questions. One is your other operating income, just the difference between the net revenues and net sales that you report. Sequentially, it has got increased by almost about INR 88 crores. And this was also the first wherein quarter in the incentives would have likely dropped on a pro rata basis in the sense, if earlier we got incentives at 28%, now we get at more like 18% on a base. I'm just comparing. So is there anything one-off that we got in this particular cost item -- sorry, revenue item? Atul Daga: So Navin, what happens is that new incentives kick in, sometimes old incentives get exhausted. Case in point, our Dhar line 1 got exhausted, whatever was the balancing quantum of money left and Dhar 2 kicked in. Then also a bigger thing and very difficult to show a trend line is volumes moving from the plant to which market. Depending upon the concentration of demand in the local market, the incentives will go up or down. Navin Sahadeo: Helpful. My second question was on India Cements. And of course, the company has done a remarkable performance there on the cost front. This quarter, in particular, the freight cost flipped, I would rather say, plunged significantly, almost 27% plus quarter-on-quarter on a per tonne basis. So wanted to understand, is this the new normal because a higher brand transition has happened, so you can sell in a lower [indiscernible] catchment area? Or this is anything one-off? That's a [indiscernible] question. Atul Daga: Yes. So it's a combination. And obviously, when brand transition gets completed fully, you will see the real benefit. Kailash Jhanwar: New footprint. Atul Daga: New footprint will also get captured. So this is not a one-off. We're ready to go down further. Difficult for me to say at this juncture. Perhaps we will talk about it in April-June quarter. Navin Sahadeo: Helpful. Operator: We have the next question from the line of Shravan Shah from Dolat Capital. Shravan Shah: Yes. Congratulation on strong volume growth. Most of the questions answered, a couple of clarifications and questions. So first, 9-month CapEx, what was the number? And for full year FY '26, '27, '28 previously, we said INR 10,000-odd crores. So that guidance remains intact? Kailash Jhanwar: INR 7,200 crores? Atul Daga: INR 7,200 crores or INR 7,000 crores is 9 months and yes... Kailash Jhanwar: [ INR 5,207 crores ]. Atul Daga: Yes, INR 2,000 crores, INR 2,500 crores will get spent in this quarter. So anywhere around INR 9,500 crore, INR 10,000 crores. Shravan Shah: Okay. Okay. Got it. And sir, in the next year, FY '27, when we say 12 million tonnes we want to add, any ballpark idea in terms of 1H FY '27, will it be a 5 million, 6 million tonnes that we will be adding? Atul Daga: I'm sorry, what did you say? Shravan Shah: In FY '27, our plan is to add 12 million tonne capacity, grinding level. So in 1H FY '27, is it fair 5 million, 6 million tonnes we will be adding? Atul Daga: You want me to tell you what date will we be commissioning and at what hour we will start the shipment will, give us that flexibility to commission as fast as possible, Shravan, don't hang me for exact number or exact period. Shravan Shah: No, no, I'm saying. 1H FY '27, in this -- so in the first 6 months of FY '27, 2ill it fair to assume 5 million, 6 million tonnes we will be adding. Kailash Jhanwar: Yes, it maybe at least 4 million to 5 million tonnes, maybe around 4 million to 5 million. Unknown Executive: [indiscernible] Kailash Jhanwar: 4 million to 5 million tonnes, but it all depends, as you know, Shravan, because there are multiple moving parts. So sometimes things get delayed and kind of thing. But yes, I can guess maybe 4% to 5% tonnes (sic) [ 4 million to 5 million tonnes ]. Shravan Shah: Okay. And in terms of the demand for fourth quarter of this quarter, FY '26, will it 7% to 9% that we are expecting? And for next 4, 5 years, normally what we guided in corporate [indiscernible] 7% to 8%. So that number remains intact. Atul Daga: That remains. That remains, Shravan. Shravan Shah: And then for this quarter, fourth quarter, would it be a 9%, 10% or 7%, 8%. Kailash Jhanwar: No, no. No, I don't think 9%, 10% may be a little optimistic, but difficult to say because the last year base itself was, all we know is the good base. But yes, all I think it is going to be the robust demand actually. Shravan Shah: Okay. Okay. Okay. Got it. And this 1.54 ratio target, that is by FY '27, we are looking at? Atul Daga: '27, '28 in the middle of -- when we complete the previous phase of expansion between '27, '28. Shravan Shah: And the green share from currently 42% to 60% by FY '27, we will be... Atul Daga: Yes. So '27 or first half of '28, so just giving us a flexibility of some delays. Shravan Shah: Okay. And last a clarification, in terms of price, when we said INR 3 crore, INR 4, price hike would have already happened versus third quarter of average, though this is including trade nontrade put together? Atul Daga: Average, yes. Shravan Shah: Okay. Okay. Got it. All the best. Atul Daga: Thank you. Operator: Thank you very much. Ladies and gentlemen, as there are no further questions from the participants. That concludes the question-and-answer session. On behalf of UltraTech Cement Limited, that concludes this conference. Thank you for joining with us today, and you may now disconnect your lines.
Operator: Ladies and gentlemen, good evening, and welcome to the UltraTech Cement Limited Q3 FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this call is being recorded. I now hand the conference over to Mr. Atul Daga, Business Head and CFO of UltraTech Cement Limited. Thank you, and over to you, sir. Atul Daga: Thank you so much. Good evening, good afternoon, ladies and gentlemen. Once again, a very warm welcome to yet another call on a Saturday evening for UltraTech for the third quarter results of '26. Before I begin, let me assure you, we will not make this a habit of spoiling your Saturdays, but this Saturday is worth spending time. Let me get on to the main core topic for discussion, which I have in mind today. Demand. That is the most important aspect for our business. Everything else becomes secondary and falls in line. And as we see the progress, government's focus on infrastructure is translating into a robust pipeline of new projects nationwide with several marquee investments announced across every region, translating into solid demand. You must have all read about it in the media in -- at different points in time, but let me put a perspective together in one place, region by region. In the North, Punjab is taking extensive road development initiatives, spending about INR 16,000 crores in its markets. New corridors have been announced in Delhi Metro for about INR 12,000 crores. Uttar Pradesh is developing 1,575 kilometers metro network across major cities. Of course, that goes till 2047. It's a long horizon, multi-city infrastructure pipeline, indicating sustained demand and significant opportunity for cement. Highway projects, continued investment in road connectivity and logistics corridor across the state, like the 4-lane greenfield highway project between a place called Barabanki and Mustafabad. Let's go to West India. Maharashtra is seeing a significant pipeline of large transport and mobility projects, signaling strong multiyear demand for cement and construction materials. Mega projects like the Uttan-Virar Sea Link, about INR 58,000 crores, Mumbai Metro expansions, Pune Metro, multiple lines and road concretization in Mumbai. Center clearance of Pune-Chhatrapati Sambhajinagar Expressway highway spanning 245 kilometers with a particular focus on improving connectivity for rural communities, nearly 350 kilometers of state highways, 2,577 kilometers of rural roads, some rehabilitation initiatives. All of these are going to boost urban cement demand. Expressways and ring roads, Nashik, Vadhavan, Bhandara, Gadchiroli, et cetera, add to further boost for demand. Gujarat's 9 high-speed corridors covering about 800 kilometers are fast tracking connectivity and will add further. Cabinet has approved 2 major highway projects worth INR 20,000 crore plus, Nashik, Solapur and one more, signaling continued momentum in India's integrated high-speed connectivity push under the PM Gati Shakti. Stepping down into South India. Bangalore is undergoing a major mobility transformation with the metro network set to expand from 96 kilometers to 175 kilometers by the end of December '27. Karnataka government has unveiled an urban infrastructure program longest -- which will have longest 40-kilometer twin tunnel, a 41-kilometer double decker metro, 110-kilometer elevated corridors. Center has approved INR 10,000 crore expansion of 4 key highways measuring about 273 kilometers, which will improve connectivity across Telangana. New Mangalore Port has announced capacity expansion to handle 100 million tonnes by 2047. We can't forget the Eastern corridor. West Bengal has its own challenges, but is planning largest road initiatives, about INR 8,487 crores program, 15,000 kilometers of rural roads, 5,019 kilometers of urban roads. All this just goes to say that India is developing very fast. Bihar is rolling out 3 major Ganga Road projects worth INR 70,000 crores. Digha-Sherpur, Bihta-Koilwar, 35 kilometers; Munger, 42, Sultanganj-Bhagalpur, 41. So I'm not advocating or speaking on behalf of NHAI, but this is what the story is surfacing. Chhattisgarh. Center has approved 774 kilometers roads covering 2,000-plus kilometers under the PMGSY-IV. The state has already completed 8,753 roads and bridges are also under the same phase. Major rail expansion across Maharashtra, Chhattisgarh, Gujarat, MP reflect the scale and diversity of investment underway. To give you a perspective, roads and highways require approximately 350 to 900 kilometers -- 900 tonnes per kilometer. With thousands of kilometers under construction or planned across all regions, this is going to be huge. Elevated metro requires 11,000 metric tons per kilometer. Underground metro requires anywhere between 17,000 to 19,000 metric tons per kilometer. Railways, 90 to 100 metric tons of cement, ports and airports go up to 50 kgs per square feet. Housing, if I were to look at low-income housing programs, affordable housing and rural connectivity projects sustained steady demand. With a strong project pipeline, demand for cement will remain very continuous and as strong as possible. Infrastructure is seeing the next big wave of growth. What does that imply? More jobs, more demand for housing and social infrastructure, i.e., schools, hospitals, commercial complexes, office and all. We are present across the country. Just to tell you about our RMC network, RMC network is about 163 cities, which we are already covering and rapidly expanding. UltraTech is so sweetly positioned to meet the demand like nobody else. We are witnessing growth -- unprecedented growth in new areas, new avenue like data centers, GCC, renewable energy projects, you name it, and things are happening. As somebody just said, India has arrived. It's the market with a population of over 1.4 billion people, youngest working class and an opportunity across the land bank for development. At UltraTech, we are fully geared up to capture these opportunities. Our approach remains rooted in disciplined execution, advancing our next phase of capacity expansion while ensuring every investment is backed by rigorous cost control and operational efficiency. In our fourth phase of expansion, large part of orders have already been placed, work has already commenced, and we will be on time. Importantly, we are funding all our growth through internal accruals, maintaining a prudent balance sheet and a healthy leverage profile. This, combined with our pan-India network and deepening retail footprint positions us to capture incremental demand at a very rapid pace while safeguarding our margins. You would have seen our leverage position this quarter end. On a consolidated basis, we are at 1.08x net debt EBITDA. I believe and I'm very confident that we'll reach the mark of 1x and be in 0.8, 0.9x net debt EBITDA by the end of this fiscal year. Integration of recent acquisitions is progressing very well with rapid brand transition. Kesoram and India Cements are ahead of the initial plans with brand conversion at Kesoram having reached 69% in December '25. And today, if we speak, it must have crossed further. India Cements has already crossed 58% at the end of December '25. For both these assets, we have begun our cost improvement CapEx program, which will result in benefits and will start reflecting in the P&L of January-March '27. At Kesoram, we have already spent INR 263 crores, committed about -- out of the commitment of about INR 382 crores. At India Cements, we have committed already INR 601 crores and spent INR 144 crores on the program. Talking about CapEx, the other initiative, cable and wires is progressing as per plan. About INR 500 crores worth of orders have already been placed. We have spent INR 197 crores. Team -- 30% of the team -- planned team is already onboard, civil work has started, and we are on schedule to see the launch of our product in the October-December '26 quarter as was committed earlier. Talking about our efficiency improvement program, we continue to deliver solid and measurable results. In fact, now I am very confident that we should be doing better than what we had committed. We shall give an exact quantification and financial impact with our annual results for the year. However, you would have noticed the lead distance has dropped to 363 kilometers. The clinker conversion factor is down at -- has improved to 1.49. The most important factor, I believe, for us is to have a strong demand pipeline. And you will notice that January-March quarter, God willing, we will operate at more than 90% of our existing installed capacity, clearly demonstrating growth in the trade markets as well as non-trade markets. If the demand is good, everything else falls in line. Ultimately, it is about the bottom line where it comes from, doesn't really matter. Quite often, everybody is focused on cement prices, which has remained subdued post GST change. September -- last week of September, October, November saw some softening prices. But with growing demand, we are witnessing improvement in prices in all segments across the country. There have been cost increases in the cost of pet coke and coal, new labor code will have its own impact, rupee depreciation. All these will have an impact on the cement industry. And obviously, there is reason to pass on these cost escalations into prices. We are very confident of a very bright future for the next quarter and after that quarter and after that and after that. That doesn't mean I'm restricting myself to a fiscal '27, but the story is far longer. As India embarks on the next decade of development, UltraTech is proud to play a pivotal role in building the nation's future. We remain confident that our strategic initiatives in building capacities across the country in critical market locations, coupled with sector's positive outlook, we will continue to deliver growth faster than the industry. And we welcome all of you to participate in our journey. Don't miss the bus. Thank you, and over to you for questions. Operator: [Operator Instructions] The first question is from the line of Amit Kumar Murarka from Axis Capital. Amit Murarka: Congratulations, Mr. Daga, firstly, for a great result. I don't think anyone expected both volume and the margin beat actually, which is quite heartening to see. Just on pricing, wanted to get a sense from you, like there is a lot of industry capacity addition that is going to come through this year. What do you think I mean industry's stance will be in this kind of a high expansion scenario? Atul Daga: The reason I talked about all the demand footprint and demand new initiatives, I think cement will easily get absorbed. And if the demand remains strong, we will not see any problem in prices. Amit Murarka: Okay. Okay. Understood. Sure. And just also on India Cements, like in Q3, I see that the EBITDA per tonne was about INR 400. You had earlier guided for INR 1,000 exit in Q4 '27. So most of this improvement will be through cost? Or will there also be some pricing required to achieve that... Atul Daga: One second. Amit so it was Q4 '27, not '26. Amit Murarka: No, no, '27 only. I meant '27 only, so 1 year down the line. Yes, sir. Atul Daga: So what will happen is the brand conversion, which has already taken place, actually, had the brand conversion not taken place, the performance would have been not where it is today. Balance almost 40% or 45% of brand conversion has to be completed and prices are going up in the southern markets as well. Further, as I called out, the CapEx program has begun for efficiency improvement. We will have -- so we have to have all the players playing the match in a positive manner, prices, efficiency improvement and capacity utilization. All of them will deliver as planned. Amit Murarka: Understood. Yes. And lastly, just if you could give the CC ratio for the quarter. Atul Daga: Sorry, what? Amit Murarka: The cement clinker ratio, what was it in the quarter. Atul Daga: 1.49. Clinker cement ratio, 1.49. This quarter, 1.49. Amit Murarka: Okay. That's all from. Best of luck. Atul Daga: Yes. Operator: We have the next question from the line of Pulkit from Goldman Sachs. Pulkit Patni: And I echo Amit's views that these are good numbers. And on a lighter note, your opening remarks sounded a lot like the budget speech. But sir, I don't see the capacity addition plant-by-plant guidance for Q4 and for the next 2 years. Just the numbers around how much capacity would be added in Q4, how much in FY '27 and FY '28, that will be helpful. Atul Daga: So we should have approximately 8 million to 9 million tonnes more coming in this quarter. And the balance, I think, 16 -- sorry, 12 million tonnes in fiscal '27 and then balance remaining will be in '28. Pulkit Patni: Perfect. Atul Daga: And I'm very much -- Pulkit, I'm very well entrenched in the private sector, no -- I'm not ambulating anybody, all right? Pulkit Patni: Sure, sure. Operator: We have the next question from the line of Jashandeep Singh Chadha from Nomura. Jashandeep Singh Chadha: Congratulations on a great set of numbers, sir. And I must start by saying that the information and detail that you gave on the project is much better than most of the department who are actually working on those projects, I must say. So my first question is you have covered most of the demand aspect and in a lot of detail. Just wanted to shift the focus on rural demand. So how was rural -- how has rural demand recovered in third quarter? How are you seeing in the fourth quarter? And what are your expectations for the year ahead? And just related to that, any expectation from the budget for the cement sector or anything? Atul Daga: Okay. The last question first, I don't want any -- I won't comment on that. That's the easiest answer. Rural demand, I think if you -- simple way to look at rural demand is look at our trade ratios. If our trade ratios remain strong, rural demand is equally buoyant. We are not witnessing any depression in rural demand. Q4 also will be solid is what my expectation is. Jashandeep Singh Chadha: Understood, sir. And sir, on the cost saving front, we have -- UltraTech has given a target of INR 300 to INR 350 per tonne over the next couple of years. How is it -- I understand it's very difficult to tell the details quarter-by-quarter, but if you can give us the sense how much of this has been realized? And how much of that will be coming in the coming quarters? And also, apart from the freight and the... Atul Daga: Wait, wait, wait, I'll forget your questions, wait, let me address this question first. So you're asking 2 things in the same question. First, you are saying it is difficult to quantify and then you are saying quantify. So please have mercy. So you will see -- no, it's very difficult and it's not logical, Jashandeep, because July-September quarter will be weak, so costs can go up. January-March will show extraordinarily high delivery. So it is best to see the results on an annual basis. Now to give you directions on how things are moving, and we had given our program with item details and with the targets. I recall we had mentioned with the base of 400 kilometers of lead, a 25-kilometer lead reduction, which would have taken us to 375 kilometers. We have already reached 363 kilometers. So it's not only the lead distance, which helps, there is a lot of other initiatives which the team is taking, which helps to take efficiency improvement. Similarly, we have taken a target of clinker conversion factor of 1.54. We are moving on that direction. In 1.54, we have reached 1.59 -- 1.54, we have reached INR 1.49. So you can see -- you can do your own math, but it will be best that we do this math at the end of the year. All I can say is we are moving and -- in line with the target set. Last year, full year, we had delivered about -- on those quantified measurable targets, we have delivered INR 86 per tonne. My guess is we should be crossing INR 100 mark on those efficiency improvement programs in this financial year. Jhanwar-ji, you want to add. Yes. Kailash Jhanwar: Yes, I think Atul has already explained because it's not item-wise see, we have moved from clinker conversion from 1.45 to 1.49, and we are still away from our target actually. And if you talk about the renewal energy, our renewal energy has gone to almost 41% kind of thing, and it is further likely to go to 60% going forward actually. So I can say that fundamentally, we are by and large, on track because quarter-to-quarter, we have seen in 1 quarter because of the cyclical nature of the industry, we may be up and down. But year as a whole, I think we are very much on the right track. Atul Daga: Thanks, Jhanwar-ji. Jashandeep Singh Chadha: Just one last, if I can squeeze in. Any impact of increasing input costs you are seeing in fourth quarter? Atul Daga: You tell me where the dollar will be in fourth quarter. That is one. So it's very difficult, but I think we are managing our middle line very well. You would have seen our fuel costs have remained at INR 1.8 per kcal in this quarter. I don't expect the cost to go up. Raw material costs are already matured. These are the 2 big cost items, maintenance costs, which spikes typically in July, September will be normal maintenance costs in January-March quarter. Jashandeep Singh Chadha: Understood, sir. I'll join back the queue. Atul Daga: Thank you. Operator: We have the next question from the line of Rahul Gupta from Morgan Stanley. Rahul Gupta: Again, sorry to echo again, a very good set of numbers. You talked about cost inflation and improved demand will support cement prices from here on. Now it looks like the infra demand is coming back, which should drive low pricing non-trade segment higher. Does that mean that even if cement prices move up, realization may remain under pressure over the next year or so? Any color on this will be very helpful. Atul Daga: So firstly, Rahul, I like the echo that you talked about. Always good to hear good performance from as many people. Coming to your first question, even if infra demand is going, non-trade prices will also harden. So I don't see any reason why there should be any problem. There have been -- in fact, if you go back 2 or 3 quarters, the gap between non-trade and trade prices had narrowed dramatically. Rahul, are you there? Hello? Rahul Gupta: Yes, yes. No, this is very helpful. I don't have any other questions. Atul Daga: Thank you. Operator: We have the next question from the line of Pinakin Parekh from HSBC. Pinakin Parekh: Sir, again, many congratulations, very good number. We understand that demand and pricing both have improved in January. But to go back to what happened in the December quarter. Now we understand that in the last 2 years, there have been multiple acquisitions done in Southern India, you and other industry players, expectations of Southern India pricing seeing more stability with upward bias, but somehow that has not taking place. What in your view needs to change in industry dynamics in South for pricing to be more stable with upward bias? Atul Daga: More demand. I think demand is opening up, and I have -- I stand by my statement South will be new north. That doesn't mean North is going away anywhere. North is stronger and stronger. South is witnessing large institutional demand, the Amravati City project, which is going at its breakneck pace, the IT complexes, complexes which are coming up, data centers which are coming up, which are so cementitious in nature, highways, et cetera, that we have talked about. And the young population in these IT hubs will demand more housing and more social infrastructure. So I'm not talking about 1 quarter, Pinakin, but I am -- as we as strategic players are looking at a long-term stability and reliability of the sector. Pinakin Parekh: Got it, sir. Sir, just to follow up in your view and given where -- what the position UltraTech is at, if finally the institutional demand, as you highlighted, starts coming up in a big way in Southern India, can 2026 see a break in terms of South India's historically volatile cement pricing? Or do you see this as something evolving more over the next 2, 3 years? Atul Daga: I think '26 will be a fabulous year. Pinakin Parekh: Got it. Got it. Atul Daga: Thanks, Pinakin. Operator: We have the next question from the line of Ritesh Shah from Investec. Ritesh Shah: Good numbers, congratulations. Sir, 3 questions. One is, would you be able to spell out industry demand growth for Q3 and 9 months? That's the first one. Atul Daga: Don't hold me to it, but we would expect anywhere between 9% to 10% all-India demand. Ritesh Shah: Sir, would you speak for Q3? Atul Daga: I was talking about Q3 literally. Ritesh Shah: Yes, yes. And sir, for 9 months? Atul Daga: 9 months, maths has to be done. 2.5% plus 5%. Kailash Jhanwar: For the year as a whole must be about 7.5% kind of thing. Atul Daga: 6.5% to 7%, 9 months. Ritesh Shah: Sure. Sir, my second question is, basically, if you could provide some detail around sourcing of fly ash and slag. What are the sort of nature of contracts that we have on tenure and how is the pricing that's trending? Atul Daga: So one is there's enough new supply coming up. Power plant capacities are going up, steel plants are coming up. And we have a mix of long-term, short-term domestic and import supply -- import sourcing, fully secured. Ritesh Shah: Sir, so putting this demand aside, if we had to improve a clinker factor, is there any limiting factor? Atul Daga: No. No, none whatsoever. Ritesh Shah: Okay. And sir, when you say imports, it means imports for both fly ash as well as slag? Atul Daga: No, slag. Ritesh Shah: Only slag, okay. That's helpful. Sir, third question on India Cements. Anything on non-core asset sale? That's one. And any thoughts on merger, basically simplifying the structure? Any time lines around that? That would be useful. Atul Daga: Noncore there are land parcels. Essentially, we just sold off the coal mining company in Indonesia. The monies have been realized, and that's how you see the debt remaining under control. There are a couple of big land parcels, which we are discussing with potential buyers. I would expect further generation of up to INR 500 crores minimum, which we should be able to get. We are now getting into the discussion -- not discussion, exploring the legal options in terms of there's an ED case, which is attached to the company -- to assets of the company are also attached. There's a property in Hyderabad and some financial securities, which are attached. We are seeking legal opinion what will be the implications of that case, and then only we'll take a decision further. Ritesh Shah: Sure. Sir, just a follow-up over here. I think just correct me if I'm wrong, for India Cements, you had indicated INR 144 crores spend out of INR 601 crores, are those numbers right? Atul Daga: Correct. Ritesh Shah: Okay. And sir, when we say non-core asset sales, incrementally, it's INR 500 crores. And what has been realized so far? Atul Daga: Close to INR 200 crores or INR 250 crores, close to INR 200 crores or INR 250 crores. I'll give you exact number. That's a very easy number. But INR 200 crores to INR 250 crores that you look at right from the beginning on, Ankit. Yes. If I can't give it on the call, I will -- you can reach out to, Ankit, later. Ritesh Shah: Yes, yes, and this is helpful. All the very best. Operator: We have the next question from the line of Satyadeep Jain from AMBIT Capital. Satyadeep Jain: Just one clarification question on the CapEx. Mr. Daga, you mentioned having 12 million tonne next year and balance in '28. Just wanted to clarify the phased 22 million tonnes that you've announced, all of that is likely to get commissioned in FY '28 given you've already placed orders? Atul Daga: Yes, please. Satyadeep Jain: Okay. Nothing still. As of now, you're not expecting anything to spill over into FY '29? Atul Daga: No, '29 is too far. Satyadeep Jain: Okay. Atul Daga: I would look at -- at best a delay by a quarter. Some project will get preponed and some project could push over to the next quarter at best. Satyadeep Jain: Okay. So in -- maybe in the next one, is it possible like historically, you used to have this quarterly -- or projection for when you expect capacities to commission for the next one that you have since you already have what... Atul Daga: Sure. Sure. Sure, we'll send it. We'll send it. Satyadeep Jain: And on the power cost, I see your captive power cost has been declining each quarter. Just what is driving that? Atul Daga: [Foreign Language] that is the average cost of power. So CapEx on the power, which has gone from INR 7.1 crores to INR 6.5 crores. Look, fuel efficiency is the only reason which I could think of, nothing more. Kailash Jhanwar: Yes. And maybe minus maybe from the coal mix. Atul Daga: Fuel efficiency essentially, nothing specific. Satyadeep Jain: Okay. Operator: We have the next question from the line of Ashish Jain from Macquarie. Ashish Jain: Sir, my first question is like all the demand... Atul Daga: My first question to you, Ashish, how are my numbers? Ashish Jain: Numbers of fantastic, sir, a lot of people have spoken about this, sir. I don't know if you had anything else on that. Atul Daga: Okay. Ashish Jain: No, no, that's it. [indiscernible] So sir, like given most of the drivers you spoke about, are all infra-led demand, right? And so can we see a change in mix moving from PPC to OPC, you think that will happen in the next 3, 4 years in the industry? Atul Daga: In fact, what we could see is intra demand converting to non-OPC also. There's a lot of strong advocacy happening, and there is a gradual conversion. You will know that most of the institutional players do the conversion or mixing at the project site. So instead of we doing it, some of them have started adopting and accepting the product from the cement manufacturer. RMC, we -- it's about 3% of our total volumes of cement and growing rapidly, where it is getting consumed, large portion goes to institutional markets. Bulk cement is going up significantly, which will help the institutional market, gives us better margins, right, so meaning the same margins improve. So that's very important. Ashish Jain: Sir, sorry. But in fact, that was the context of my question that if on-site blending is going up, can it mean that... Atul Daga: No, it's going down. No, no, it's going down. Ashish Jain: Okay. Okay. Because of RMC I think but... Atul Daga: That is what I talked about advocacy and there is a conversion happening, slowly it's happening. Ashish Jain: Right. Yes. Atul Daga: Okay. Hello? Are you there?. [Technical Difficulty] I think he lost the connection, take the next person, please. Operator: Yes. We have the next question from the line of Indrajit Agarwal from CLSA. Indrajit Agarwal: I have 2 questions, sir. Sir, first, can you highlight what is the spot pet coke price versus the booking levels in 3Q? Atul Daga: Around $118, $117. Kailash Jhanwar: $118, $119, ranging in the trend. Indrajit Agarwal: Sure. This is helpful. And second, in 3Q versus, let's say, a 3% kind of price decline sequentially, how would you split it between trade and nontrade? Was non-trade drop much sharper? Atul Daga: On-trade was sharper. Indrajit Agarwal: Sure. That's all from me. Atul Daga: Yes. Operator: We have the next question from the line of Raashi from Citigroup. Raashi Chopra: Sir, just continuing on the pricing question, where are we on pricing versus 3Q at the moment? Atul Daga: I think we are roughly INR 3 to INR 4 on a naked cement realization basis up. If cement realization is up INR 3 to INR 4, prices are up, it's somewhere around INR 6 to INR 8. Are you there? Raashi Chopra: Yes, I'm just trying to -- what I'm trying to get to is that you also made a comment, of course, on demand, but on that you will be able to pass on the higher cost impact in the form of better pricing. So... Atul Daga: I think what is happening is, I'm sold out. What do I do? So obviously, if I'm in a sold-out position, I have to service my highest paying customer. Raashi Chopra: Understood. Fair enough. Okay. Got that -- that one. Then just on -- again, on the capacity, is it possible to just for India Cements capacity, what would be the number by the end of '26, '27 and '28 in the asking... Atul Daga: 16.8%. Unknown Executive: 17.5%. Atul Daga: One sec, one sec, 17.5% or 16.8%? Unknown Executive: 17.5% not [indiscernible]. Atul Daga: So, yes, 17.5%... Raashi Chopra: Sorry, I didn't meant India Cements, I meant your Indian capacity not of Indian Cements. Atul Daga: Indian capacity. Which year, 234-point something. Unknown Executive: 235 by FY '28. Atul Daga: 235 by FY fiscal '28. Unknown Executive: India, I'm talking about. Raashi Chopra: Fiscal '26 and '27, if you have the number. Atul Daga: '26 should be 19.8%, 19.9% and then 10 -- sorry, 12 more million tonnes in towards '27, yes. We missed that chart, we'll circulate that chart separately. Raashi Chopra: Got it. And just on Kesoram in the second quarter, you had indicated the EBITDA per tonne was INR 755, what is that number in this quarter? Atul Daga: Would be around INR 600 this quarter, yes, INR 600. Raashi Chopra: And the full rebranding is still maintaining June '26, okay for now? Atul Daga: We should be doing it in time, yes. Because we have already crossed the 70% mark for Kesoram as we speak. And India Cements also, we have crossed 55%-odd thereabouts. I don't remember the exact number, but we are -- every day is a new high. Raashi Chopra: Got it. Understood, okay. Atul Daga: Thanks, Raashi. Operator: We have the next question from the line of Siddharth Mehrotra from Kotak Securities. Siddharth Mehrotra: Congratulations for a great set of numbers. Sir, just wanted to understand, given the strong volume growth we've witnessed this quarter, what is your approximation of UltraTech's market share going for this quarter? And sort of where do you sort of aspire to be, say, 2 to 3 years down the line? Atul Daga: I wouldn't know a number on market share, but if you see that we have been growing or our capacity utilization has been higher than the industry, then obviously, there is a gain in market share also. There's no published data available to capture that number realistically. And going forward, I expect to see the same trend. As for aspiration, there's no aspiration. I think we are looking at how India is growing, where the growth opportunity is, and we will keep growing with India's growth story. Siddharth Mehrotra: Got it, sir. And just coming back to consolidation, do you think there are additional targets which you would want to sort of look at just from a consolidating point of view so that you have better control on perhaps the industry dynamics as well? Are there any potential opportunities still under consideration, so over the next 1 or 18 months? Atul Daga: It's highly opportunistic. We would love to examine opportunities if they come to the table. Siddharth Mehrotra: Okay. But nothing is in progress as we speak? Okay, sir, then that's it. Atul Daga: Thank you. Operator: We have the next question from the line of Harsh Mittal from Emkay Global Financial Services. Harsh Mittal: So my first question is that what has been the clinker capacity additions till date in FY '26? And what will be the addition in quarter 4, this ongoing quarter? Atul Daga: 2 lines? Kailash Jhanwar: Yes, we have added 2 lines actually one is almost 10,000 TPD, yes, and translate into almost 3.5 million tonnes per year. And another one more line of 3.5 million tonne in Rajasthan. So it takes... Atul Daga: That's 7 million tonnes of capacity. Kailash Jhanwar: Yes. Atul Daga: And Maihar. Harsh Mittal: Sure. Sir, second question is what is the premium share this quarter? It's not been there in the PPT? Atul Daga: Oh, we misses that. premium share... Unknown Executive: 36%. Atul Daga: yes. Harsh Mittal: Okay. Operator: We have the next question from the line of Andrey Purushottam from Cogito Advisors. Andrey Purushottam: [Foreign Language] And I wanted to ask, when I was going through the presentation, I found that your EBITDA is up considerably. And -- but your costs, some have gone up, some have gone down, right? Your raw material costs have gone up and your fuel and logistics costs have gone down. Now given that your net realizations are also slightly lower, can one assume that the increase in EBITDA is almost entirely out of operating leverage? And if that is the case, if you're adding 8 million and 12 million tonnes capacity in the next quarter/next year, respectively, what can we see as the trajectory of -- and the effect of operating leverage going forward? Could you just lend some color on that? Atul Daga: So operating leverage, obviously, will keep on playing a positive impact on efficiency improvement. Second point or the first point that you asked, obviously, prices were a dampener on the profitability, but volumes, which gave me operating leverage and cost management, very efficient and tight cost management. Of course, you cannot manage all the line items of cost, but the management team's focus always remains on running a very tight P&L. So that's what is reflected in the performance in the quarter. Kailash Jhanwar: And the third one you asked about the raw material pricing. It's the -- obviously, the clinker conversion ratio has improved. So the raw material price will definitely increase, but the benefit we will get partially in the power and fuel side. Andrey Purushottam: Okay. So we basically should see an increase in EBITDA per tonne over the next 15 months? And... Kailash Jhanwar: Definitely, without a doubt. Andrey Purushottam: And would there be a numerical guidance that you would be able to provide in the range or that's not... Kailash Jhanwar: No, we don't give guidances. Andrey Purushottam: Okay. Operator: We have the next question from the line of Girija Ray from YES Securities. Girija Shankar Ray: Congratulations. This is a superb number I can say, which is beyond market expectation. So sir, my question is related to employee cost. Is this a one-off for this quarter? And second question, can I expect INR 1,100 to INR 1,200 kind of EBITDA per tonne for fourth quarter? Atul Daga: To your second question, we will do much better than what we did this quarter. I don't want to get into any specific number. And 916 employee cost going up Y-o-Y -- because what happens is our annual increases -- compensation increases that take place would reflect... Unknown Executive: Plus new plants. Atul Daga: And new plants, of course, new capacity getting added. That is what will reflect in this cost. What you ideally should compare, if you look at Q2, you will not see dramatic movement. Girija Shankar Ray: Okay. And thanks for saying this -- that fourth quarter, we'll be doing a very good EBITDA per ton. That's all from my side, sir. Atul Daga: Thank you. Operator: We have the next question from the line of Navin Sahadeo from ICICI Securities. Navin Sahadeo: Of course, congratulations on the robust volume growth that you have demonstrated. Two questions. One is your other operating income, just the difference between the net revenues and net sales that you report. Sequentially, it has got increased by almost about INR 88 crores. And this was also the first wherein quarter in the incentives would have likely dropped on a pro rata basis in the sense, if earlier we got incentives at 28%, now we get at more like 18% on a base. I'm just comparing. So is there anything one-off that we got in this particular cost item -- sorry, revenue item? Atul Daga: So Navin, what happens is that new incentives kick in, sometimes old incentives get exhausted. Case in point, our Dhar line 1 got exhausted, whatever was the balancing quantum of money left and Dhar 2 kicked in. Then also a bigger thing and very difficult to show a trend line is volumes moving from the plant to which market. Depending upon the concentration of demand in the local market, the incentives will go up or down. Navin Sahadeo: Helpful. My second question was on India Cements. And of course, the company has done a remarkable performance there on the cost front. This quarter, in particular, the freight cost flipped, I would rather say, plunged significantly, almost 27% plus quarter-on-quarter on a per tonne basis. So wanted to understand, is this the new normal because a higher brand transition has happened, so you can sell in a lower [indiscernible] catchment area? Or this is anything one-off? That's a [indiscernible] question. Atul Daga: Yes. So it's a combination. And obviously, when brand transition gets completed fully, you will see the real benefit. Kailash Jhanwar: New footprint. Atul Daga: New footprint will also get captured. So this is not a one-off. We're ready to go down further. Difficult for me to say at this juncture. Perhaps we will talk about it in April-June quarter. Navin Sahadeo: Helpful. Operator: We have the next question from the line of Shravan Shah from Dolat Capital. Shravan Shah: Yes. Congratulation on strong volume growth. Most of the questions answered, a couple of clarifications and questions. So first, 9-month CapEx, what was the number? And for full year FY '26, '27, '28 previously, we said INR 10,000-odd crores. So that guidance remains intact? Kailash Jhanwar: INR 7,200 crores? Atul Daga: INR 7,200 crores or INR 7,000 crores is 9 months and yes... Kailash Jhanwar: [ INR 5,207 crores ]. Atul Daga: Yes, INR 2,000 crores, INR 2,500 crores will get spent in this quarter. So anywhere around INR 9,500 crore, INR 10,000 crores. Shravan Shah: Okay. Okay. Got it. And sir, in the next year, FY '27, when we say 12 million tonnes we want to add, any ballpark idea in terms of 1H FY '27, will it be a 5 million, 6 million tonnes that we will be adding? Atul Daga: I'm sorry, what did you say? Shravan Shah: In FY '27, our plan is to add 12 million tonne capacity, grinding level. So in 1H FY '27, is it fair 5 million, 6 million tonnes we will be adding? Atul Daga: You want me to tell you what date will we be commissioning and at what hour we will start the shipment will, give us that flexibility to commission as fast as possible, Shravan, don't hang me for exact number or exact period. Shravan Shah: No, no, I'm saying. 1H FY '27, in this -- so in the first 6 months of FY '27, 2ill it fair to assume 5 million, 6 million tonnes we will be adding. Kailash Jhanwar: Yes, it maybe at least 4 million to 5 million tonnes, maybe around 4 million to 5 million. Unknown Executive: [indiscernible] Kailash Jhanwar: 4 million to 5 million tonnes, but it all depends, as you know, Shravan, because there are multiple moving parts. So sometimes things get delayed and kind of thing. But yes, I can guess maybe 4% to 5% tonnes (sic) [ 4 million to 5 million tonnes ]. Shravan Shah: Okay. And in terms of the demand for fourth quarter of this quarter, FY '26, will it 7% to 9% that we are expecting? And for next 4, 5 years, normally what we guided in corporate [indiscernible] 7% to 8%. So that number remains intact. Atul Daga: That remains. That remains, Shravan. Shravan Shah: And then for this quarter, fourth quarter, would it be a 9%, 10% or 7%, 8%. Kailash Jhanwar: No, no. No, I don't think 9%, 10% may be a little optimistic, but difficult to say because the last year base itself was, all we know is the good base. But yes, all I think it is going to be the robust demand actually. Shravan Shah: Okay. Okay. Okay. Got it. And this 1.54 ratio target, that is by FY '27, we are looking at? Atul Daga: '27, '28 in the middle of -- when we complete the previous phase of expansion between '27, '28. Shravan Shah: And the green share from currently 42% to 60% by FY '27, we will be... Atul Daga: Yes. So '27 or first half of '28, so just giving us a flexibility of some delays. Shravan Shah: Okay. And last a clarification, in terms of price, when we said INR 3 crore, INR 4, price hike would have already happened versus third quarter of average, though this is including trade nontrade put together? Atul Daga: Average, yes. Shravan Shah: Okay. Okay. Got it. All the best. Atul Daga: Thank you. Operator: Thank you very much. Ladies and gentlemen, as there are no further questions from the participants. That concludes the question-and-answer session. On behalf of UltraTech Cement Limited, that concludes this conference. Thank you for joining with us today, and you may now disconnect your lines.
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