Concall AI

Nuvoco Vistas Corporation Limited — Q1 FY26 earnings call

Call held 18 Jul 2025

Management summary

Nuvoco Vistas delivered a robust Q1 FY26 performance, marked by strong volume and revenue growth, record EBITDA, and significant debt reduction. The company's strategic focus on cost optimization, premiumization, and trade sales, coupled with the successful acquisition of Vadraj Cement, positions it for continued growth and market expansion, particularly in the western region.

Highlights

Volume grew by 6% YoY to 5.1 million tons in Q1 FY26.
Consolidated revenue from operations increased by 9% YoY to ₹2,873 crores.
Achieved highest ever Q1 consolidated EBITDA of ₹533 crores.
Blended EBITDA per ton reached ₹1,052, a 16-quarter high.
Net debt reduced by ₹884 crores YoY to ₹3,474 crores.
Capacity expanded to 31 million tons, nearly 15-fold since 2014.
Premium product share improved to 41% and trade mix to 76% in Q1 FY26.
Carbon emission footprint improved to 454 kg CO2 per ton in FY25 from 457 kg CO2 per ton in FY24.

Key financials

2 periods

Headline

Volume
5.1 million tons
YoY +6%
Revenue
₹2,873 Cr
YoY +9%
EBITDA
₹533 Cr
EBITDA per ton
₹1,052
Net Debt
₹3,474 Cr
Capacity Utilization
82%
Premium Product Share
41%
Trade Mix
76%
Blended Fuel Cost
₹1.43/mcal

FY25

Carbon Emission
454 kg CO2/ton

What they filed

Q1 FY27: revenue up 8.9%, net profit up 20.3% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	2,269	2,409	3,042	2,873	2,458 +8%	2,701 +12%	3,307 +9%	3,129 +9%
Expenses	2,050	2,151	2,491	2,354	2,091	2,318	2,719	2,560
EBITDA	219	258	552	519	367 +68%	384 +49%	588 +7%	568 +9%
Margin	10%	11%	18%	18%	15%	14%	18%	18%
Other income	10	0	4	15	4	3	-46	4
Interest	132	126	113	117	102	99	81	70
Depreciation	215	217	220	215	218	223	228	226
Profit before tax	-118	-85	224	202	51 +143%	65 +176%	233 +4%	276 +37%
Tax rate	-28%	-28%	26%	34%	29%	24%	40%	42%
Net profit	-85	-61	166	133	36 +142%	49 +180%	141 −15%	160 +20%
EPS	-2.38	-1.72	4.63	3.73	1.02	1.37	3.94	4.47

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Volume

Industry Volume Growth Volume · FY26 · Medium confidence 7-10%

Overall, if you see, post monsoon, we are confident that the industry should grow anywhere between 8%-10%. That's the optimistic number. Give or take, it could be 8%-10%, it could be 7%-9%. So, it's all in the ballpark of 7%-10% kind of a number is what I see the industry moving in this year.

— Jayakumar Krishnaswamy, Managing Director
Company Volume Growth Volume · FY26 · Medium confidence 7-8%

for us also similar 7%-8% kind of volume growth that we are looking at? ... Certainly, for Nuvoco, we have been able to get 6% volume growth.

— Jayakumar Krishnaswamy, Managing Director
Gujarat Sales Volume (Current) Volume · Current · High confidence 1 million tons

Currently in the state of Gujarat, we sell 1 million tons.

— Jayakumar Krishnaswamy, Managing Director
Gujarat Sales Volume (Short-term) Volume · Q1 FY27 · High confidence 1.2-1.3 million tons

From 1 million tons today

our target is when we close this year and come into Q1 next year, we should be able to improve this number from the current 1 million tons to maybe 1.2 to 1.3 million tons

— Jayakumar Krishnaswamy, Managing Director
Gujarat Sales Volume (Total) Volume · FY27 end · High confidence 1.5-1.8 million tons

FY'27 end, we are targeting close to about anywhere between 1.5, 1.8 million tons of sale in Gujarat.

— Jayakumar Krishnaswamy, Managing Director

Debt

Net Debt Level Debt · Next 2-3 years · High confidence ₹3,500-4,000 crores

a debt level of Rs. 3,500 to Rs. 4,000 crores is a number which we would like to concentrate on.

— Jayakumar Krishnaswamy, Managing Director
Debt to EBITDA Ratio Debt · Next 2-3 years · High confidence <2.5x (ideally <2x)

it will certainly be less than 2.5x. Our target is to bring debt levels to twice of EBITDA and that's the kind of 2 to 2.5x is the worst case. But ideally, we should target even less than two as well.

— Jayakumar Krishnaswamy, Managing Director

Vadraj Acquisition

Bridge Debt Conversion Vadraj Acquisition · Next 2-3 months · Medium confidence Within 2-3 months

This bridge financing is for a short-term period of maximum 2 to 3 months. And I guess, hopefully, in the coming 2 to 3 months, we should convert this debt into an equity like-type of instrument.

— Jayakumar Krishnaswamy, Managing Director
Vadraj Plants Trial Runs Vadraj Acquisition · H1 FY27 · High confidence H1 FY27

Our current plan is to make the plants at Kutch and Surat and associated equipment including the jetty ready for trial runs by H1 FY'27

— Ms. Madhumita Basu, Chief Investor Relations
Vadraj Plants Full Functioning Vadraj Acquisition · Q3 FY27 · High confidence Q3 FY27

with full functioning targeted for Q3 FY'27.

— Ms. Madhumita Basu, Chief Investor Relations

Capex

Vadraj Total CAPEX (Acquisition + Refurbishment + CPP) Capex · Next 1.5 years · High confidence ₹3,600 crores

1,800 was the cost of the asset which we paid to the bankers and then committee of creditors. And then we going to refurbish the asset at another Rs. 1,600 crores, looking at Rs. 200 crores to fund the CPP. So, you have to look at 1,800 plus 1,600 plus 200.

— Jayakumar Krishnaswamy, Managing Director
Vadraj Refurbishment CAPEX (FY26) Capex · FY26 · High confidence ₹600 crores

We are looking at a CAPEX of close to Rs. 600 crores to refurbish the asset.

— Jayakumar Krishnaswamy, Managing Director
Vadraj Refurbishment CAPEX (FY27) Capex · FY27 · High confidence ₹600 crores

And then next year, another 600

— Jayakumar Krishnaswamy, Managing Director
Vadraj Refurbishment CAPEX (FY28) Capex · FY28 · High confidence ₹300 crores

and year three, the balance money, which will be close to about another Rs. 300 crores.

— Jayakumar Krishnaswamy, Managing Director
Nuvoco Operations Maintenance CAPEX Capex · Next 2 years (per year) · High confidence ₹100-150 crores

to sustain the Nuvoco operations, we are looking at close to about Rs. 100 - Rs. 150 crores of CAPEX in the coming year and the next 2 years.

— Jayakumar Krishnaswamy, Managing Director
Kutch Railway Siding Cost Capex · Medium confidence ₹110-130 crores

it should cost anywhere between Rs. 110 - Rs. 130 crores.

— Jayakumar Krishnaswamy, Managing Director

Cost

Freight Cost Reduction Cost · Coming quarters · High confidence ₹70-80 per ton

we expect this number to come down by about Rs. 70 - Rs. 80 in the coming quarters.

— Jayakumar Krishnaswamy, Managing Director
Total Cost Saving Cost · FY26 (over FY25) · High confidence ₹50 per ton

we are targeting a cost saving of close to about Rs. 50-odd over and above FY'25 and FY'26 on a full year average. ... Full year, we are looking at close to Rs. 50.

— Jayakumar Krishnaswamy, Managing Director

Logistics

Lead Distance Reduction Logistics · This year (FY26) · High confidence 10-13 kilometers

reduce the lead distance by close to about 10 to 13 kilometers.

— Jayakumar Krishnaswamy, Managing Director
Clinker Movement by Siding (Jajpur) Logistics · Q3 FY26 · High confidence 100%

Come Q3, we will have 100% clinker movement to Jajpur via our siding.

— Jayakumar Krishnaswamy, Managing Director

Sustainability

AFR Usage Percentage Sustainability · H2 FY26 (post-monsoon) · High confidence 15%

From 10% today

in terms of AFR, we are at 10% this year... our target is to get the AFR up to about 15%. It should happen post-monsoon. ... Post-monsoon in H2 of this year, we are targeting 15% AFR.

— Jayakumar Krishnaswamy, Managing Director
Petcoke Usage Percentage Sustainability · H2 FY26 · High confidence <40%

From 42% today

Petcoke should come less than 40% in H2, whereas currently it is about 42%.

— Jayakumar Krishnaswamy, Managing Director
Allied Slag Usage Sustainability · FY26 · High confidence 75,000 tons per month

From 45,000 tons per month today

getting our allied slag from the current 45,000 to 75,000 tons per month.

— Jayakumar Krishnaswamy, Managing Director

Capacity

WHR Capacity (Nimbol) Capacity · FY26 · High confidence 6.6 MW

From 4.7 MW today

de-bottlenecking the WHR, waste heat recovery system in Nimbol from the current 4.7 megawatt to 6.6 megawatt

— Jayakumar Krishnaswamy, Managing Director

Profitability

EBITDA per ton Profitability · Coming quarter and beyond · High confidence ₹1,000+

Our target and endeavor will be to sustain this kind of profitability and some conditions are certainly favoring Nuvoco

— Jayakumar Krishnaswamy, Managing Director

Operations

Blended C/K Ratio Operations · Long term · High confidence 1.74

at a blended level, our C/K ratio is at 1.74. ... Our blended target still will be to hit 1.74 at a long term, that's going to be the goal for the company.

— Jayakumar Krishnaswamy, Managing Director
East C/K Ratio Operations · Long term · High confidence 2.1

We are striving to get the East C/K ratio all the way up to 2.1, maximizing more and more blended cement and getting more and more slag cement, which should overall improve.

— Jayakumar Krishnaswamy, Managing Director

Risks & concerns

Demand Seasonality/External Factors
medium

Q1 demand impacted by intense heat, geopolitical situation, and early onset of monsoon, but optimism for post-monsoon demand.

Management acknowledged
Slag Tightness (East Region)
medium

Increased competition for slag in the East due to more players entering the composite segment, leading to higher auction prices, though Nuvoco has tie-ups and uses allied slag.

Management acknowledged
Rake Availability Issues
low

Temporary rake availability issues in May and June affected logistics and increased freight costs in Q1.

Management acknowledged
Clinker Stock Thinness (North Region)
low

Thin clinker stocks in the North and a Chittor plant shutdown in Q1 led to increased distribution costs.

Management acknowledged

Areas of evasion (2)

Specifics of the CCP/CCD financing terms for Vadraj acquisition
Granular region-wise demand and realization data

Q&A highlights

2 direct

Vadraj Acquisition Financing Structure Partial

I won't be able to tell you all the nitty gritties of the financing because currently under discussion, it will not be appropriate to discuss all the details. But suffice to say, we are very mindful of the balance sheet strength of Nuvoco. ... The balance Rs. 1,200 crores, as mentioned, available in the public domain, would be through an instrument which will be through the CCPs or CCDs route, which will not be a debt instrument and not form into part of the debt instrument in the balance sheet.

Reveals the company's strategy to fund a significant acquisition without increasing balance sheet debt, but details are withheld, raising questions about the nature and terms of these instruments.

Asked by Satyadeep Jain, Ambit Capital

Freight Cost Increase and Normalization Direct

Three specific reasons. The first reason is quarter one had little bit of rake availability issues in the month of May and June... Reason number two is our Haryana cement plant is now under maximum capacity utilization... And point number three, Q4 to Q1, Q4 we ran thin on clinker stocks in North... we expect this number to come down by about Rs. 70 - Rs. 80 in the coming quarters.

Explains the reasons for increased freight costs in Q1 and provides a clear target for reduction in subsequent quarters, indicating management's focus on cost optimization.

Asked by Navin Sahadeo, ICICI Securities

Total CAPEX for Vadraj and Power Plant Direct

1,800 was the cost of the asset which we paid to the bankers and then committee of creditors. And then we going to refurbish the asset at another Rs. 1,600 crores, looking at Rs. 200 crores to fund the CPP. So, you have to look at 1,800 plus 1,600 plus 200.

Clarifies the comprehensive financial outlay for the Vadraj acquisition, including refurbishment and captive power plant, providing a full view of the investment.

Asked by Navin Sahadeo, ICICI Securities

3 min read 7 chapters

Detailed narrative

Q1 FY26 Performance Highlights

Nuvoco Vistas reported a strong Q1 FY26, achieving its highest ever first-quarter consolidated EBITDA of ₹533 crores, translating to a blended EBITDA per ton of ₹1,052, a 16-quarter high. Volume grew by 6% year-on-year to 5.1 million tons, while consolidated revenue from operations increased by 9% year-on-year to ₹2,873 crores. The company also significantly reduced its like-for-like net debt by ₹884 crores year-on-year, bringing it down to ₹3,474 crores.

Vadraj Acquisition and Integration Update

The acquisition of Vadraj Cement Limited was successfully completed, adding 3.5 million tons clinker and 6 million tons grinding capacity. The company plans for trial runs at Kutch and Surat plants by H1 FY27, with full functioning targeted for Q3 FY27. The total outlay for Vadraj, including acquisition, refurbishment, and captive power plant, is estimated at ₹3,600 crores, with ₹600 crores allocated for refurbishment in FY26, another ₹600 crores in FY27, and ₹300 crores in FY28.

Growth Outlook and Demand Dynamics

Management expressed optimism for industry growth, projecting 7-10% volume growth for FY26, driven by a 6.5% GDP prognosis and significant government CAPEX outlays post-monsoon. Nuvoco Vistas itself achieved 6% volume growth in Q1 FY26 despite challenges like intense heat and early monsoon. The company aims to increase its Gujarat sales volume from the current 1 million tons to 1.2-1.3 million tons by Q1 FY27, and further to 1.5-1.8 million tons by FY27 end with Vadraj operations.

Cost Optimization and Sustainability Initiatives

Nuvoco Vistas continues its focus on cost optimization, targeting a total cost saving of approximately ₹50 per ton for FY26 over FY25. Specific initiatives include increasing allied slag usage from 45,000 to 75,000 tons per month, de-bottlenecking the Nimbol WHR system from 4.7 MW to 6.6 MW, and increasing AFR percentage from 10% to 15% by H2 FY26. The company's carbon emission footprint improved to 454 kg CO2 per ton in FY25 from 457 kg CO2 per ton in FY24.

Balance Sheet and Debt Management

The company aims to maintain its net debt level between ₹3,500 to ₹4,000 crores, targeting a debt-to-EBITDA ratio of less than 2.5x, ideally below 2x. The ₹1,200 crores portion of the Vadraj acquisition funding is planned through equity-like instruments (CCPs or CCDs) that will not be classified as debt on the balance sheet, with conversion expected within 2-3 months.

Pricing and Product Mix Strategy

Nuvoco Vistas reported stable pricing in Q1 FY26, with realizations holding firm into Q2. The company's strategy of premiumization and increasing trade sales has been successful, with premium products and trade mix improving to 41% and 76% respectively in Q1 FY26. New product launches like Concreto Uno and expansion of Duraguard Microfiber contributed to this improvement, helping to sustain profitability.

Logistics and Freight Cost Management

Freight costs increased in Q1 FY26 due to temporary rake availability issues, maximum utilization of the Haryana plant, and thin clinker stocks in the North. Management targets a reduction of ₹70-80 per ton in freight costs in coming quarters by reducing lead distance by 10-13 kilometers and increasing direct dispatches. The Kutch railway siding, estimated to cost ₹110-130 crores, is expected to be commissioned, enabling 100% clinker movement to Jajpur via siding by Q3 FY26.

This is an AI-generated summary of a publicly available earnings call transcript.

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