Nuvoco Vistas Corporation Limited — Q1 FY27 earnings call

The balance, our target is when we complete Q4 this year, our sale in Gujarat will be anywhere close to about 2 million tons as an annual sale. So basically, it will be about 1.6, 1.7 lakh tons per month in the Q4 of this year, which should mean it will be about 30,000, 40,000 50,000 tons more than the average run rate which we are selling currently in Gujarat. For that, we need clinker and those clinker will come from our Chhattisgarh cluster.

Clarifies the strategy for ramping up sales in Gujarat and the interim clinker sourcing plan before Kutch becomes fully operational, addressing profitability concerns for new capacity.

Asked by Siddharth Mehrotra

So, just want to assure all of you that there is no delay because the modification involved are very minor modification, it's not major modification. Its overall capex cost was pretty less for all these four plants. Just that the timing and the pacing is there. Right now, we are not hard-pressed for capacity, so I'm not kind of pursuing it at a rigor. Two plants CTO are almost done, the other two plants will be done in the next six to eight months.

Addresses analyst concerns about potential delays in East capacity expansion, clarifying that modifications are minor and pacing is strategic rather than due to issues, with most projects on track for FY28 volumes.

Asked by Siddharth Mehrotra

Overall, if you see our realization has gone up by close to about INR320 Q1 versus Q4. That came mostly through three reasons: one was the NODT increase, second was the geo-mix which we played in key markets of Chhattisgarh, Rajasthan, Western MP, and Jharkhand, and also the price increase in the last 15 days of March which kind of gave a fillip to the first month of the quarter.

Provides a detailed breakdown of the factors contributing to both realization gains and cost increases, offering transparency into Q1 profitability drivers.

Asked by Amit Murarka

I think our purchase team did a wonderful job. So, by using this specific variety of coal which comes from West Bengal, whose ash percentage is much lower than the Chhattisgarh coal, and the number two thing which we did was we started adding a little bit of sweetener in our Risda factory... Overall fuel cost being capped at INR1.52 per million cal.

Explains the company's proactive strategies for fuel mix optimization and cost control, and provides a forward-looking view on cost components for the upcoming quarters, including potential increases due to shutdowns.

Asked by Satyadeep Jain

I think from the capacity expansion announcements which have been placed by all player what you call informed by all the major players, there are not many clinker units which are going to come in the next 3 years... And with market growing at 7%-8% conservatively, very soon in the next 18 to 24 months, capacity utilization of the entire East will go to again cross 80%.

Addresses the long-term profitability outlook, particularly for the East region, by linking it to industry capacity additions and expected market growth, suggesting improved utilization and pricing power.

Asked by Pinakin Parekh

I'm looking at a demand anywhere between 7%-8% in the next 3 quarters... I guess we had communicated in the last call that the outlook for FY27 capex was INR900 crores. It continues to be INR900 crores.

Confirms the company's capex plans and provides a specific demand growth outlook for the remainder of FY27, contrasting with potentially more bearish peer views.

Asked by Jashandeep Singh Chadha

Yes. I we had serious issues of bag certainly in February, March and then also in April, May. The problem in Q4 was huge demand, problem in Q1 is not exactly demand but also due to the fact that granule prices went up. So, we are a company which uses lot of LPP bags, not LTP bags. So, since we are indexed on LPP bags, LPP bag there the impact was much more.

Highlights specific operational challenges related to packaging bags in Q1 and explains how these issues are expected to resolve in Q2, impacting costs positively.

Asked by Jyoti Gupta

Petcoke was 4Q was 37%, 1Q 27%. 10% reduction in the overall mix... Look, it is available for me. I--right now in monsoon period obviously demand will be there. So, this number will be useful for me in Q4 when my numbers will go up.

Provides specific details on the fuel mix shift towards lower petcoke usage and clarifies the timeline for the operational impact of debottlenecked grinding units, indicating their contribution will be felt in Q4.

Asked by Shravan Shah