Nuvoco Vistas

Nuvoco Vistas reported a Q3 FY25 revenue of ₹2,409 crores and EBITDA of ₹258 crores. The company achieved a strong 16% year-on-year volume growth, reaching 4.7 million tonnes, despite cement prices plummeting in October and November. Significant cost reductions were realized, with power and fuel cost per tonne decreasing by 6% quarter-on-quarter to a 13-quarter low of ₹1.45 per million cal. Distribution costs also declined by 3% quarter-on-quarter, and the Project Bridge 2.0 initiative delivered cost savings upwards of ₹50 per tonne year-to-date.

The company successfully bid ₹1,800 crores for Vadraj Cement Limited, which includes a 3.5 MTPA clinker unit in Kutch and a 6 MTPA grinding unit in Surat. An additional CAPEX of ₹900-1,200 crores is planned over 18-24 months to make the assets fully operational, with production targeted to start from Q3 FY27. This acquisition is expected to boost Nuvoco's total cement capacity to 31 MTPA by Q3 FY27, expanding its footprint in the Western region and freeing up capacity in Rajasthan for Northern markets.

Nuvoco Vistas demonstrated consistent debt reduction, with net debt standing at ₹4,350 crores as of December 31, 2024, a year-on-year reduction of ₹183 crores and a quarter-on-quarter reduction of ₹151 crores. The company aims to bring net debt below ₹4,000 crores by the end of FY25 before undertaking further investments. The CAPEX for Vadraj operationalization (₹1,200 crores) and routine annual CAPEX (₹300 crores) are expected to be funded through internal accruals and improved profitability over the next two to two-and-a-half years.

The macroeconomic environment, though challenging in H1 FY25 due to decelerated industrial growth and CAPEX, showed signs of recovery in Q3 FY25, aided by festive demand and rural activities. India continues to be the fastest-growing major economy, with GDP growth projected at 6.9% for Q1 FY26 and 7.3% for Q2 FY26. The Union Budget for FY26 is expected to prioritize infrastructure, with a projected 30% increase in allocation, which bodes well for future cement demand. Regional CAPEX in Eastern states also indicates significant potential for increased infrastructure activity.

Nuvoco Vistas is actively optimizing its logistics network. The Sonadih railway siding is now moving 3-4 rakes per day, with a target to increase to 5 rakes, eliminating road movement of clinker. The Jajpur siding is nearing completion and is expected to be operational by Q1 FY26, further enhancing rail-based movement and cost savings. The company projects a 10% year-on-year volume growth from FY26, targeting 21 MT in FY26, 23 MT in FY27, 25 MT in FY28, and 27 MT in FY29.

The company maintains its commitment to sustainability, reflected in a low carbon emission rate of 457 kg CO2 per tonne of cementitious material for FY24, which is among the lowest in the industry. In its Ready-Mix business, Concreto UNO Concrete is gaining traction. The MBM business introduced three new products: Tile Adhesive T5, Tile Glitter, and Tile Bonder under the ZERO M brand, strengthening its product portfolio and contributing to improved sales in construction chemicals and cover blocks.