Nuvoco Vistas Corporation Limited

Nuvoco Vistas reported a strong start to FY27, achieving its highest-ever first quarter volume and EBITDA. Volume grew by 5% YoY to 5.3 million tons, while EBITDA increased by 7% YoY to INR572 crores. This performance was delivered despite significant macro headwinds^🌐, including geopolitical tensions, rising raw material costs, and logistical challenges.

The company made significant progress on its capacity expansion plans. The 2 million tons per annum (MTPA) grinding capacity at Vadraj (Surat) was inaugurated ahead of schedule on July 11, 2026, marking Nuvoco's first expansion in the Western region. The clinker and grinding units at Kutch are on track for phased operationalization from Q3 FY27, with civil works for the grinding unit expected to complete by Q2 FY27. Additionally, work has commenced on the Sachana bulk cement terminal in Gujarat, targeted to be operational by Q2 FY28, which will serve as a strategic distribution hub.

Management maintains a positive outlook on cement demand, projecting a market demand growth of 7-8% for the next three quarters of FY27. This is supported by Central Government capex increasing by 13% YoY to INR2.5 lakh crores in QTD May 2026, representing about 20% of the full-year planned capex. Regional performance was strong in Jharkhand, Odisha, and Bihar, while Bengal's demand is expected to pick up after state elections.

Cost discipline was a key focus, with fuel cost contained at 1.52 per mcal, within the guided range. This was achieved through strategic fuel mix optimization, including reducing petcoke usage in North operations from over 50% to ~42% and in Risda from ~37% to ~25%. The company also moved domestic open market coal to North factories and contracted lower-ash coal for East operations, resulting in Arasmeta operating with zero petcoke consumption.

Realization increased by approximately INR320 in Q1 compared to Q4, driven by NODT (Non-Trade Discount) increases, favorable geo-mix (increased sales in high-realization markets like Chhattisgarh, Rajasthan, Western MP, and Jharkhand), and price increases in late March. The company's premiumization strategy also contributed, with Concreto Uno and Duraguard Microfiber becoming 1 million ton brands each, contributing to a total of ~5 million tons of premium and super-premium products.

For Q2, fuel costs are expected to remain stable at around 1.52-1.55 per mcal due to adequate inventory. Packaging bag prices, which peaked in Q4/Q1, are anticipated to cool off by INR20-25 in Q2. However, power and fuel costs are projected to increase by INR30-40/ton in Q2 due to planned kiln and mill shutdowns for maintenance. Railway rake availability has improved to 4 rakes per day for clinker movement, reducing reliance on costlier road transport.