Summary
Nuvoco Vistas Corp. Ltd. - Q3 FY26 Earnings Call Summary Friday, January 16, 2026, 4:00 PM IST
Event Participants
Executives Jayakumar Krishnaswamy (Managing Director), Maneesh Agrawal (CFO), Bishnu Sharma (Head - Investor Relations)
Analysts Amit Murarka (Axis Capital), Jashandeep Singh Chadha (Nomura), Navin Sahadeo (ICICI Securities), Prateek Kumar (Jefferies), Rajesh Ravi (HDFC Securities), Satyadeep Jain (Ambit Capital), Shravan Shah (Dolat Capital), Tejas Pradhan (Citi)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume | 5.0 million tons | +7% YoY; Highest Q3 volumes in company history driven by 20% growth in Dec-25. |
| EBITDA | ₹386 crores | +50% YoY; Driven by premiumization and high cost efficiency despite price moderation. |
| Blended Fuel Cost | ₹1.41 per Mcal | -Lowest in 17 quarters; Success in reducing pet coke mix and increasing domestic coal/AFR. |
| Premium Product Share | 44% | +400 bps YoY; Sustained at historic highs, contributing significantly to trade volumes. |
| Net Debt | ₹4,217 crores | Includes ₹600 Cr long-term debt for Vadraj; like-to-like debt reduced from ₹4,350 Cr YoY. |
| Cost of Borrowing | Sub-8% | Maintained in an efficient range despite new debt issuances. |
| Logistics Cost | ₹1,450 per ton (approx) | -₹100/ton vs H1; Driven by 5km lead distance reduction (to 326km) and rail-siding efficiencies. |
| Net Debt/EBITDA | ~2.0x (Target) | Management aims to maintain this leverage ratio alongside future expansion. |
Geographic & Segment Commentary
- East Region: Management identified significant headroom for growth with an installed capacity of ~20 million tons and a CK ratio of 1.95-2.0. Focus remains on scaling “Concreto UNO” (composite cement) and leveraging new railway sidings at Sonadih and Jajpur to lower clinker movement costs.
- North Region: Operating at near-peak capacity utilization; future growth is dependent on the Vadraj expansion which will release 1 million tons of North capacity currently serving Gujarat. Focus is on shifting non-trade OPC volumes to trade PPC to improve the CK ratio (currently 1.3-1.35).
- West Region (Gujarat): Currently selling ~1.2 lakh tons per month (1.4 MTPA run-rate) sourced from the North. The Vadraj project (Surat and Kutch) is the primary vehicle for capturing the 1-2-3-4 million ton annual sales target over the next four years.
Company-Specific & Strategic Commentary
- Vadraj Cement Refurbishment: Operationalization is on track with clinker and grinding units starting in phases from Q3 FY27 to Q1 FY28, eventually scaling total company capacity to 35 MTPA.
- Premiumization Strategy: Premium products now command 44% of trade volumes (up from 34% in FY22), with a target to increase this by 200 bps annually to capture an incremental ₹150-200/ton contribution.
- Cost Optimization (AFR & Fuel): Pet coke consumption was reduced to 41% (vs 48% YoY) by increasing Alternative Fuel Resources (AFR) to 10% and utilizing domestic open-market coal and washery rejects.
- Digitization: Approximately 99% of total orders are handled via the customer portal; launched the “ZeroM Unnati” app for influencer loyalty and digitized end-to-end logistics visibility via a transporter portal.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Volume Growth | 7-8% (Q4 FY26); 10% CAGR (FY27-28) | Driven by government CAPEX (45% central/61% state budgets pending) and rural recovery. |
| CAPEX | ₹1,000-1,100 Cr (FY27) | Includes ~₹800 Cr for Vadraj completion and routine maintenance; FY28 guidance is ₹650-700 Cr. |
| Green Power Mix | 25-30% (Medium term) | Planned 50MW hybrid (solar/wind) plant in Rajasthan via group captive model to reduce costs. |
| Net Debt Threshold | ₹3,500 - ₹4,000 Cr | Management is comfortable holding this absolute debt level while pursuing growth. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regional Capacity Constraints | North assets are operating at near-full capacity; volume growth here is restricted until Vadraj commissions in FY27. |
| Pet Coke Pricing | Recent uptick in pet coke prices (Dec-25) poses a margin risk, though management expects to offset this via fuel-mix optimization (AFR and domestic coal). |
| Logistics Infrastructure | Success of the Kutch plant depends on the timely completion of the 4.5km Vagot railway siding by June 2028; Naliya siding/Jetty serve as high-cost backups. |
Q&A Highlights
Pricing & Demand
- Question: Status and sustainability of the January price hikes? (Jashandeep Singh Chadha)
- Answer: Price hikes were taken around Jan 10-12 across non-trade and trade channels in East/North. While it’s early, demand momentum post-Sankranti is positive, and hikes were necessary to offset previous price moderation (Jayakumar Krishnaswamy).
Capital Structure & CCDs
- Question: Clarification on the ₹1,200 Cr CCD structure for Vadraj? (Amit Murarka)
- Answer: The first tranche of ₹600 Cr is completed; it carries a 0.1% coupon and is mandatorily convertible in Year 7. However, Nuvoco holds call options in Years 5, 5.5, and 6 to buy out investors using internal accruals, avoiding equity dilution (Maneesh Agrawal).
Logistics & Infrastructure
- Question: Status of the Kutch railway line connectivity? (Satyadeep Jain)
- Answer: Railways should reach Vagot station (4.5km from plant) by Jan 2027. Nuvoco has issued POs for the internal siding; the goal is full operation by June 2028. In the interim, the Naliya siding and sea route (Jetty) provide backup (Jayakumar Krishnaswamy).
Key Takeaway
Nuvoco Vistas delivered a resilient Q3 FY26, characterized by record Q3 volumes of 5.0 million tons (+7% YoY) and a significant 50% jump in EBITDA to ₹386 crores. The company achieved its lowest blended fuel cost in 17 quarters (₹1.41/Mcal) and hit a historic high in premiumization at 44% of trade volumes. Strategy is currently centered on the “1-2-3-4” million-ton scale-up in the West via the Vadraj acquisition, which remains on schedule for phased commissioning starting Q3 FY27. While North assets are hitting capacity ceilings, the East region provides ample headroom to support management’s 10% CAGR volume guidance for the next two years. Despite immediate pet coke price pressures, Nuvoco’s shift toward a 15% AFR mix and optimized domestic coal sourcing provides a structural cost cushion. The company remains committed to a disciplined balance sheet, targeting a Net Debt/EBITDA of ~2.0x while balancing routine and expansionary CAPEX of ~₹1,000 crores for FY27.
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