Nuvoco Vistas Corporation Limited

Key Financial Performance

Q2 FY27 YoY Performance:

  • Volume growth: 9%
  • Revenue growth: ~14%
  • EBITDA growth: 11%

Operational Metrics:

  • Premiumization reached a historic high of 45%
  • Trade mix remained at 75%
  • Blended cement ratio: 83%
  • Clinker-to-cement (CK) ratio: 1.75 (up from 1.73 in Q1)
  • Road and rail share: 64% road, 36% rail
  • Lead distance: 332 km (increased by 4 km from Q1)

Cost Structure Details (Per Ton):

Q1 FY27:

  • Fuel cost: INR 1.52 per million kcal
  • Energy cost: INR 1,005 per ton

Q2 FY27:

  • Fuel cost: INR 1.59 per million kcal
  • Energy cost: INR 1,080 per ton (INR 75 increase from Q1)
  • Cost inflation Q2 vs Q1: ~INR 180-190 per ton breakdown:
  • Power and fuel: INR 90 increase
  • Raw materials (fly ash, gypsum, clinker, slag): INR 60 increase
  • Packing bags: INR 10 increase

Fuel Mix Q2 FY27:

  • Coal: 66% at INR 1.47 per million kcal
  • Petcoke: 27% at ~INR 2.00 per million kcal
  • Alternative Fuel and Raw material (AFR): 6% at INR 0.95 per million kcal

Input Cost Environment & Outlook

Challenges in Q2:

  • Middle East conflict escalation caused sharp jump in input prices (petcoke, coal, granules, gypsum)
  • Petcoke prices surpassed previous peaks seen in March-April period
  • Domestic erratic rainfall reduced thermal coal inventories, prioritized for power sector
  • Reduced rake availability disrupted supply chain
  • Surge in domestic e-auction coal prices

Q3 FY27 Cost Guidance:

  • Fuel cost expected at INR 1.8 per million kcal (vs INR 1.59 in Q2)
  • Energy cost increase: INR 70-80 per ton vs Q2
  • Overall cost inflation expected: INR 100-120 per ton breakdown:
  • Power and fuel: INR 70-80 increase
  • Raw materials: ~INR 10 increase
  • Packing bags: INR 20 increase (due to LPP bag consumption and granule price increases)
  • Busy season surcharge: INR 10 negative impact

Fuel Coverage Status:

  • Adequate petcoke coverage for Q3 at current rates
  • High-cost petcoke ($200/ton) impact expected only in March 2027 (Q4 FY27)
  • Coverage for January to mid-February 2027 already in place

Pricing Strategy & Realization Outlook

Price Actions Taken:

  • Post-September 15: Non-trade prices increased by INR 20-25 in North
  • September: Trade corrections of INR 5-7 in North markets
  • October: INR 20 price increase in non-trade in North and East
  • October: INR 20 price increase in trade prices in East

Q3 Outlook:

  • Average INR 20 price increase expected to defray cost increases
  • Expected delta benefit in realization in Q3 vs Q2

Project Updates & Capacity Expansion

Surat Grinding Unit (Limla Cement Plant):

  • 2 MTPA capacity commissioned during Q2 (September 2026)
  • Current production: Achieved 3,600 tons in a single day (capacity: 5,500 tons/day)
  • Current annualized volume: 1.5 MTPA in Gujarat
  • Q4 FY27 target: 2 MTPA annualized volume in Gujarat
  • Q4 FY27 expected capacity utilization: 50-60%
  • FY28 expected capacity utilization: 70-75%

Kutch Project:

  • Phased operationalization planned from Q3 FY27
  • Clinker production expected to start by December 2026
  • Jetty dredging completion expected by first week of December 2026
  • Trial runs completed for dummy items from Kutch to Hazira

Viramgam Bulk Cement Terminal (Sachana):

  • Construction on track
  • Equipped with dedicated railway siding
  • Will serve as strategic distribution hub for Gujarat market
  • Capex allocation: INR 50 crores

East Debottlenecking:

  • Delayed from Q3/Q4 FY27 to Q1/Q2 FY28
  • Reason: Prioritization of Vadraj capex and cash flow management

Renewable Energy Initiative

  • Executed agreement with CleanMax for 46.4 MW wind-solar hybrid project in Rajasthan
  • Expected annual generation: ~100 million units of renewable electricity
  • Expected benefit: Long-term cost certainty and reduced dependence on conventional power

Capital Expenditure (Capex)

FY27 Capex Plan:

  • H1 FY27 actual spend: INR 780 crores (vs original plan of INR 450-460 crores)
  • Full-year FY27 planned: INR 1,200 crores
  • Breakdown:
  • Vadraj projects: INR 1,000 crores
  • Viramgam terminal: INR 50 crores
  • Existing operations: Balance

FY28 Capex Outlook:

  • Planned: INR 800-900 crores
  • Allocation: Kutch, Surat, Sachana terminal, East debottlenecking, existing plants
  • 2-year total (FY27-FY28): INR 2,000-2,100 crores

Financial Position & Debt

Net Debt Position:

  • September 2026: ~INR 5,000 crores (increased from ~INR 4,500 crores in March 2026)
  • Increase reasons:
  • Working capital increase of ~INR 200 crores (petcoke stocking and higher costs)
  • Higher capex spend in H1 (INR 780 crores vs planned INR 450 crores)

Debt Outlook:

  • H2 FY27 expected improvement due to:
  • Working capital release
  • Higher cash generation from increased volumes
  • Better collections
  • Reduced capex spend in remaining months
  • Expected net debt by FY27 year-end: Similar to March 2026 level (~INR 4,500 crores)
  • Medium-term target: Net debt/EBITDA of 2x-2.5x
  • Long-term target: Net debt/EBITDA below 2x once Vadraj volumes are absorbed

Taxation

  • H1 FY27 tax rate: 41.6% (on reported PBT)
  • Reason: Company still under old tax regime, MAT credit not available under new Income Tax Act provisions
  • Evaluation ongoing for transition to new tax regime
  • Decision expected within next 3-4 months

Demand Outlook

  • Industry demand growth expectation for H2 FY27: ~8%
  • Post-monsoon and festival season demand expected to pick up
  • Construction activity expected to increase from December to June (cement cycle)
  • Regional variations expected to continue

Vadraj Assets EBITDA Outlook

  • Target: Gujarat EBITDA to match North EBITDA in Year 3 (FY29)
  • Expected timeline: FY28 Q4/FY29 Q1 for matching Nuvoco's blended all-India EBITDA per ton
  • Subject to cost inflation being offset by price increases

Additional Operational Metrics

  • Duraguard Microfiber and Concreto Uno both became 1-million-ton brands
  • Concreto Uno achieved 1 million tons in less than 18 months