Nuvoco Vistas Corporation Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Record quarter, record year: FY26 delivered the highest annual volume (2.04 crore tons) and EBITDA (₹1,881 crores) in company history, capped by a landmark Q4 with 0.6 crore tons volume and ₹590 crores EBITDA.
• Cost inflation is the new reality: Blended fuel cost is set to rise from ₹1.44 to ₹1.51–₹1.55 per million kcal in Q1, with a further step-up in Q2, while packing bag costs have already added ~₹100 per ton. Management expects ~₹200 per ton of total cost inflation and is racing to offset it.
• Price hikes taken, more may follow: April price increases were implemented across all markets and channels, and management is confident they will stick. It will not absorb cost inflation indefinitely and plans to catch the pricing trajectory when post-election demand picks up.
• Vadraj on track, capex peak ahead: The Vadraj Cement project is progressing on schedule for phased commissioning from Q3 FY27, with capex of ₹900 crores (FY27) and ₹960 crores (FY28) keeping debt elevated near current levels for a few quarters.
• What to watch next quarter: Whether the April price hikes fully stick, the pace of fuel cost escalation in Q2, and how quickly the bag shortage and rake diversion problems ease once the monsoon arrives.

Cost Headwinds & Mitigation

• Fuel cost trajectory turning up: Blended fuel cost was nearly flat QoQ at ₹1.44 per million kcal in Q4, but management guided to ₹1.51–₹1.55 in Q1 FY27, with a further increase expected in Q2 as higher-cost shipments booked now arrive in July–August.
• Packing bag shock: Granule prices shot from ₹99/kg to ₹155/kg, driving a ~₹20 per ton cost increase in March and an expected ~₹100 per ton impact in April. The bag shortage is industry-wide, triggered by fertilizer movement, a Bangladesh jute bag issue, and granule availability problems, and it continues in April.
• Logistics under strain: Rake availability dropped from 4.5 to 4 rakes per day as the government diverted rakes for coal movement to power plants, forcing the company to move material by road to some grinding units. This problem is expected to persist until the monsoon sets in 1.5–2 months.
• Mitigation playbook activated: The company is reducing petcoke consumption by 300–500 bps in the East and 200–300 bps in the North, increasing domestic coal and AFR usage (target: 10% to 13%+ in FY27), and replacing mineral gypsum with FGD gypsum from nearby power plants. No clear mitigation exists for bag costs.
• Total inflation bill: Management expects close to ₹200 per ton of cost inflation from bags, fuel, diesel price hikes, and gypsum. Even with the April price increase net of GST, a gap remains that will require internal levers plus further pricing action.

Jayakumar Krishnaswamy: "These are all unique times. And if you see almost every industry and every sector in India has taken price increase. Paint industry, adhesive industry, automobile industry, FMCG industry, almost every industry whose raw material is crude-linked have taken price increase. So there is no escaping the fact that we will not absorb this."

Pricing & Demand

• April price increases implemented: Price hikes were taken around April 6th–10th across all markets in both trade and non-trade channels. Management is confident they will stay put in the near term, but warns that further cost inflation will require further pass-through.
• Demand recovery underway: Central and state government capex gained momentum in Q4, up ~12% through February. Structural demand remains intact, with central government capex planned to grow 20% in FY27, state capex 15%, PMAY-Gramin allocation up 73%, and East state housing schemes worth ~₹29,000 crores.
• Post-election pricing window: Management foresees demand opening up to 7–8% after elections finish and labour returns to major markets, and plans to catch the pricing trajectory at that point. The volume growth target for FY27 is 7–9%, in line with the industry.
• Profitability over volume: The company will not drop price to buy market share. The stated DNA is to work hard for profitability with growth, not to throw money at growth.

Jayakumar Krishnaswamy: "It's not like a 1-to-1 ratio. Cost increase by 100, price increase by 100. That's not the way one works."

Vadraj Cement & Capacity Expansion

• Vadraj project on schedule: The clinker unit and grinding units at Kutch will be commissioned in phases between Q3 FY27 and Q1 FY28. Key equipment deliveries are complete at Surat, the 66 kV grid connection is established, and trials have commenced. At the Kutch clinker unit, equipment upgradation and electrical panel testing are underway.
• Kutch grinding unit progress: Civil works are on track, the silo VRM foundation, packing plant, and hopper building are progressing, and VRM installation has started. The railway siding engineering scale plan and detailed project approvals from Indian Railways are at an advanced stage, with site execution commenced.
• Bulk terminal at Viramgam: A new bulk cement terminal in Sachana, Gujarat, with ~0.15 crore tons per annum handling capacity and a dedicated railway siding, is targeted for commissioning in FY28.
• East expansion program: The company is adding 0.4 crore tons per annum of grinding capacity in phases through FY28. Debottlenecking at Jojobera and Panagarh is complete (hardware modifications done, awaiting CTO approval with no increase in pollution load), Jajpur is expected in 2–3 months, and Arasmeta by end of this year. All should be online by end of FY27.
• Capex and debt profile: Capex is guided at ₹900 crores for FY27 and ₹960 crores for FY28, largely driven by Vadraj refurbishment (₹627 crores and ₹728 crores respectively). Debt is expected to remain around current levels for a few quarters, with a goal to maintain debt at 2x to 2.5x EBITDA, a level management expects to meet during FY27.

Operational Performance

• Premiumization gains: The industry-leading premiumization base expanded 300 bps YoY to 43% in FY26, establishing a stronger base for the future.
• Scale benefits flowing through: Employee cost per ton declined as volume scaled to 2.04 crore tons in FY26 versus 1.88-1.94 crore in prior years.
• Lead distance stuck: Lead distance remained at 325 km with no substantial reduction from Q3, held back by clinker movement challenges from rake availability issues and packing bag challenges in certain locations.
• C/K ratio steady: The clinker-to-cement ratio sits at 1.72, and management has no programs to move it to compensate for cost increases.

Jayakumar Krishnaswamy: "So, I guess we will – it's a tightrope walking. It's an everyday journey where we kind of find a way to source back incentivized for short-term incentives for the bag manufacturers to make."

Guidance & Commitments

Key Metrics