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Concrete

Taking Stock of the PAT Thresholds

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The Perform, Achieve and Trade (PAT) launched by the Bureau of Energy Efficiency incentivises energy efficiency and consumption, resulting in economic benefits in the long term.

The Indian cement industry is involved in production of several types of cement such as Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement, etc. The Perform, Achieve and Trade (PAT) launched by the Bureau of Energy Efficiency under the Ministry of Power, Government of India, offers an opportunity to the industry to improve its energy efficiency and reduce energy consumption resulting in long term economic benefits in terms of reduced fuel expenditure with trading.

The key goal of the PAT scheme under NMEEE, is to mandate specific energy efficiency improvements for the most energy intensive industries, and further incentivise them to achieve better energy efficiency improvements that are superior to their specified SEC improvement targets. To facilitate this, the scheme provides the option to industries that achieve superior savings to be rewarded with energy saving certificates for the excess savings, and to trade the additional certified energy savings certificates with other designated consumers who can utilise these certificates to comply with their reduction targets. The Energy Saving Certificates (ESCerts) thus issued will be tradable on special trading platforms to be created in the power exchanges.

The Bureau of Energy Efficiency focused on development of normalisation factors so as to normalise the variation of operating parameters in the target year with respect to baseline operating parameters.

Let us look at the baseline energy consumption parameters taken for consideration before the normalisation thresholds were ascertained: It would be worthwhile to see how the industry has progressed against this baseline scenario for Thermal Energy Consumption and Electrical Energy Consumption as identified by the Bureau of Energy Efficiency.

The CII Energy Efficiency Audit conducted over several cement manufacturing units in 2018, provides us with the state of energy efficiency improvements achieved by the Indian industry stalwarts. While the names of the best individual performers have been kept undisclosed, we can at least see the top performing assets and the corresponding efficiencies they have achieved. The CII Report Energy Benchmarking (2019) has given the following data of the top best performing Cement Kilns in terms of Energy Consumption (CII Tables 4.1, 4.2, 4.3 and 4.3 – page 30).

The data shows improvement in the energy efficiency, both in the electrical as well as in the thermal area. But this shows the top ten performers doing better than the benchmark values set in 2007- 10. However, we do not know what the average data for the industry is. CII has taken up many energy efficiency improvement projects for implementation with the industry and many of them have been implemented. The gap identified for Electrical efficiency is as follows:

Waste Heat Recovery (WHR) systems on the other hand has given major savings in energy and remains the major focus area for adoption to reduce the electrical energy and related emission. The economics of putting up a captive power generating unit versus putting up a WHR system shows unique advantages for cost reduction. The capital investment for waste heat recovery systems is high at Rs 8 Cr /MW going by the current costs, whereas the CPP units can come at Rs 4.5 cr/MW; however, the project IRR would be very different as the cost of generation would be as low as Rs 0.40 per unit for the former while Rs 4.5 per unit for the latter, which given the current trajectory of fossil fuel prices is already under severe stress of upward correction. It is only the initial cost that continues to act as a deterrent for putting up a WHR unit.

The Indian cement industry must act responsibly and move quickly to put in investments that could raise the WHR installed capacity to cross the minimum threshold of 25 per cent of electricity consumption. That will still be far from the 20 billion KWhr of total electricity consumption by the industry.

The other area of concern is the price trajectory of fossil fuels, which would continue to move northwards. The WHR systems are one simplest way of insulating the industry from the vagaries of future price increases.

Thus, waste heat recovery systems could be the natural hedge to fossil fuel price increases for a substantial portion of the electrical consumption. As matters stand, most WHR systems would be the highest IRR projects that the industry as an ensemble can think of today.

Concrete

Dalmia Bharat’s Q3 FY25 Net Profit Plunges by 75.19%

The company’s net consolidated total income dropped by 12.17% to Rs 32.18 billion in Q3 FY25.

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Dalmia Bharat, a leading cement manufacturing company, reported a sharp decline of 75.19 per cent in its net consolidated profit for the quarter ending December 31, 2025. The company disclosed in a BSE filing that its profit after tax stood at Rs 660 million in Q3 FY25, compared to Rs 2.66 billion in the same quarter of the previous fiscal year.

The company’s net consolidated total income dropped by 12.17 per cent to Rs 32.18 billion in Q3 FY25, down from Rs 36.64 billion in the corresponding quarter last year.

According to Puneet Dalmia, the managing director and CEO, India experienced a slightly slower start to the year following multiple years of high growth. He assured that the company’s capacity expansion plans were progressing as expected, with a target of reaching 49.5 million tonnes (MnT) by the end of the fiscal year.

Chief Financial Officer Dharmender Tuteja highlighted that cement demand growth in Q3 fell short of earlier expectations. He noted that the company’s volumes declined by 2 per cent year-on-year, while EBITDA fell by 34.5 per cent year-on-year to Rs 5.11 billion, primarily due to continued softness in cement prices. However, he expressed optimism for the coming quarters, citing improving demand and signs of a positive trend in prices.

During the quarter, the company completed debottlenecking projects at its facilities in Rajgangpur, Odisha (0.6 MnT), and Kadapa, Andhra Pradesh (0.3 MnT), increasing its total clinker capacity to 23.5 MnT. Additionally, it commissioned a 4 MW captive solar power plant in Medinipur, West Bengal, and 46 MW renewable energy capacity under Group Captive, bringing its total operational renewable energy capacity to 252 MW.

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Concrete

Gadchiroli Added to JSW’s List in Maharashtra’s Steel City Plan

A significant portion of this investment is likely to be concentrated in Nagpur and Gadchiroli.

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On the first day of the World Economic Forum (WEF) at Davos, the state government signed memorandums of understanding (MoUs) worth over Rs 3.35 trillion for industrial investments in Vidarbha. By 8:30 pm (Indian time), the largest deal was secured with JSW Group, involving investment proposals worth Rs 3 trillion, which are expected to create 10,000 jobs. A significant portion of this investment is likely to be concentrated in Nagpur and Gadchiroli.

The Pune-based Kalyani Group, with interests in the defence and steel sectors, also signed an MoU for an investment proposal in Gadchiroli. According to a source from the state’s industries department, there is a possibility that the company will establish a defence production unit there.

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Concrete

Q3 Preview: UltraTech Cement Set for 26% Drop in PAT

The company’s profit after tax is estimated at Rs 13.04 billion for the third quarter of FY25.

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UltraTech Cement is expected to report a 26 per cent decline in net profit year-on-year (Y-o-Y) for the quarter ending December 31, primarily due to lower realisations and higher depreciation, according to analysts. The company’s profit after tax is estimated at Rs 13.04 billion for the third quarter of FY25.

A survey conducted among five brokerages revealed that UltraTech Cement is projected to achieve a revenue of Rs 166.96 billion, reflecting a 1.2 per cent increase Y-o-Y.

Among the brokerages surveyed, Axis Securities presented the most optimistic projections, while B&K Securities predicted the slowest growth in both revenue and profit after tax (PAT) for the company.

According to Yes Securities, the company’s volumes are anticipated to grow by 9 per cent Y-o-Y to reach 29.76 million tons per annum. The growth in volumes is attributed to strong demand from institutional players and continued momentum in the housing sector.

Analysts noted that after weak demand growth of around 1-2 per cent in H1FY25, industry cement demand improved in Q3FY25. However, Motilal Oswal Financial Services, in its quarterly update, pointed out regional challenges, including pollution-related curbs in Delhi-NCR, sand scarcity, and unfavourable weather conditions such as severe cold and unseasonal rains, which negatively impacted overall demand growth.

The average cost of producing one ton of cement (excluding fixed costs) is expected to decrease by 4 per cent Y-o-Y, amounting to Rs 4,761 in Q3FY25.

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