Nuvoco Vistas Corporation Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Volume-led EBITDA jump despite price headwinds: Volumes hit a record 0.5 crore tons (+7% YoY), driving a ~50% YoY EBITDA surge to INR 386 crores, even as cement prices moderated below GST-pass-through levels.
• Premiumization is the structural margin story: Premium products held 44% of trade volumes for the second straight quarter, up from 34% in FY22, adding INR 150–200 per ton in contribution and creating a new, higher base.
• Fuel costs hit a 17-quarter low: Blended fuel cost fell to INR 1.41 per Mcal through pet coke reduction, domestic coal substitution, and CPP coal innovation, with power costs dropping to INR 0.78–0.80 per Mcal.
• Vadraj project on track, funded by internal accruals: Phased commissioning runs Q3 FY27 to Q1 FY28; the company raised INR 600 crores via CCDs and expects to fund the remaining capex from cash flows while staying within its INR 3,500–4,000 crore comfort debt band.
• What to watch next quarter: Whether the January price increase sustains, the pace of Gujarat volume scale-up toward the 0.1 crore ton FY26 exit target, and any update on the second INR 600 crore CCD tranche.

Volume & Demand Recovery

• Record quarter, back-end loaded: Q3 volumes reached the highest ever at 0.5 crore tons, with December alone growing 20% after a slow start to the quarter as macro headwinds subsided and government capex gained momentum.
• Q4 outlook anchored to industry growth: Management expects industry demand growth of 7–8% and aims to hit or cross that number, despite a high base of 0.57 crore tons in Q4 last year.
• Post-Sankranti tailwind: Demand typically improves across all regions after Sankranti, and the company sees that pattern holding, with "no reason why prices [should come] down" in a quarter where demand is "pretty robust."
• Medium-term volume ambition: Targeting a 10% volume CAGR for at least the next two years, supported by East expansion capacity coming online and Gujarat ramp-up.

Jayakumar Krishnaswamy: "I see no reason why prices coming down from where we have taken up because these prices have to sustain going forward and also in a quarter where demand is going to be pretty robust."

Pricing & Realizations

• Price correction taken in January: Around 10th–12th January, the company raised non-trade prices across all geographies and trade prices in East and North, after prices had fallen below GST-pass-through levels and non-trade had dipped well below trade prices.
• Sustainability still uncertain: Management says "things look positive" but needs another week or so to confirm the increase holds; the correction was driven by cost inflation and the need to restore price discipline, not by a demand surge.
• Premiumization as a pricing shield: The 44% premium share in trade volumes provides a structural buffer, contributing INR 150–200 per ton in additional contribution versus non-premium products, insulating realizations from commodity-grade price swings.

Jayakumar Krishnaswamy: "We'll have to wait for a week or so to see whether the price rise which we have taken sustains. But as of now, things look positive."

Cost & Efficiency Levers

• Fuel cost at multi-year trough: Blended fuel cost of INR 1.41 per Mcal is the lowest in 17 quarters, achieved by cutting pet coke consumption from 48% to 41%, using domestic open-market coal in North plants for the first time, and burning power-plant reject coal and coal-washery reject coal in CPPs.
• Power cost innovation: CPP power cost dropped from ~INR 0.95 to INR 0.78–0.80 per Mcal through the reject-coal initiative; Chhattisgarh plants use grid integration with CPP shutdowns for savings with a 7–8 month payback.
• Logistics cost compressing: Lead distance fell from 331 km to 326 km, driven by home-market focus in Chhattisgarh and Rajasthan, GPS-fitted primary freight to reduce leakages, and the elimination of all clinker road movement in the East via Sonadih and Jajpur railway sidings, saving INR 25–35 per ton in clinker distribution cost.
• Green power build-out: Signed an LOI for a 50 MW hybrid (solar+wind) group captive plant in Rajasthan for the Nimbol plant, operational in 12–18 months, targeting the state's highest-in-portfolio power cost; green power mix currently ~20%. [13-14]
• AFR target raised: Aiming for 13–15% alternative fuel rate at the company level within the next three months, up from current levels.

Jayakumar Krishnaswamy: "It is economics which will drive at this point of time."

Premiumization Trajectory

• A 1,000 bps journey in four years: Premiumization rose from 34% in FY22 to 44% in Q3 FY26, with 9M FY26 at 43%, a ~300 bps uplift over the FY25 baseline of 40%. The company calls this a "new stronger base."
• Brand engine: Concreto is the flagship; Concreto Uno launched in Bihar, Bengal, and Jharkhand; Duraguard Microfiber sold across multiple states including Gujarat.
• Targeting 200 bps annual gains: Management aims to add 200 bps of premiumization every year for the next 2–3 years, implying a ~50% premium share within that window.

Jayakumar Krishnaswamy: "We have got bragging rights on this. So, certainly from FY '22 till FY '26 nine months our premiumization percentage is a percentage of trade volumes have moved from 34 to 36 to 37 to 40 to 43 and Q3 we had 44% of premiumization."

Vadraj Project & Gujarat Scale-Up

• Phased commissioning on track: Surat grinding unit and Kutch clinker unit operational during FY27; Kutch grinding unit commissioned in H1 FY28. Engineering, tendering, and ordering for Surat are complete; Kutch activities are progressing with mechanical supplies arriving at site and permits applied for.
• Cost profile comparable to existing West plants: At steady state, Vadraj's power and fuel cost will be "more or less same" as Nimbol and Chittor, with a lignite-based CPP.
• Gujarat volume ramp: the 1-2-3-4 plan: Exit FY26 at 0.1 crore tons, scale to 0.2 crore in FY27, 0.3 crore in FY28, and 0.4 crore in FY29. The strategy: release ~0.1 crore-ton Gujarat sales into North markets while serving Gujarat, West Maharashtra, and bordering West MP from the Surat factory.
• Railway siding target June FY28: The Naliya-Vagot railway survey is complete with an initial project report targeting December/January completion; the 4.5 km Vagot-to-plant stretch had its purchase order approved last week. Naliya siding is already operational as backup, and a jetty route will be operational around clinker production start. [10-11]
• Funded without stretching the balance sheet: The INR 600 crore Series A CCD (three INR 200 crore tranches, 0.1% coupon, mandatory equity conversion at year seven, call option at years five/5.5/six) was raised in November; management intends to repay via cash flows in year five rather than wait for conversion, and expects to fund remaining Vadraj capex through internal accruals.

Expansion Pipeline & Capital Allocation

• East expansion in motion: Jojobera expansion completes in the next two months (early FY27); Panagarh and Jajpur grinding units ready by end-Q1 or max Q2 FY27, adding 0.4 crore tons per annum in phases. East has adequate capacity for double-digit growth this year, next year, and the year after.
• North running hot: North will operate at near-full capacity utilization in Q4 and beyond until Vadraj releases volume into those markets.
• Next growth leg taking shape: Post-Vadraj and East expansion, strategic options include a brownfield project in the North or greenfield development in the Gulbarga region; the company also holds the JMK-R2 limestone block in Jodhpur and Pali (preferred bid status received) and a Gulbarga mine. Clarity expected in H2 FY27, with a potential start in H2 FY28 or Q1 FY29.
• Debt philosophy: operate within a band, not deleverage to zero: Management is comfortable at INR 3,500–4,000 crore of debt and will not retire all debt; the ambition is to grow beyond Vadraj and be in a "pretty favorable position at similar debt levels two years from now to kickstart next expansion."
• Second CCD tranche imminent: An additional INR 600 crore CCD issuance, structured similarly to Series A, is at the final stage of discussion and expected to conclude in the near future, substituting the remaining INR 600 crore of short-term bridge financing.

Jayakumar Krishnaswamy: "As a Company, we are comfortable operating the Company with the debt levels of INR 3,500 to INR 4,000 crores. That would continue to be, we are not going to be going into the path of retiring all the debt."

Guidance & Commitments

Key Metrics