/** Title: Nuvoco Vistas ends FY26 on a record note, but cost pressures return to the spotlight */

Nuvoco Vistas ends FY26 on a record note, but cost pressures return to the spotlight

Nuvoco Vistas Corporation closed Q4 FY26 with its strongest quarterly volume so far and capped FY26 with the company’s best annual performance on both scale and operating profit. Consolidated volume for FY26 rose to 20.4 million metric tons, while EBITDA climbed to 1,881 crore. In Q4, volume touched 6.0 million metric tons and EBITDA reached 590 crore. The company also highlighted a continued shift in mix, with premiumisation at 43 percent in FY26 and 44 percent in Q4.

The year’s performance came despite a choppy demand environment earlier in the year and a fresh round of cost volatility toward the end of FY26. Management pointed to improving execution of government capex in Q4 as a key demand driver, while also flagging that geopolitics and currency moves are creating a near-term cost overhang through higher petcoke, coal and crude-linked packaging inputs.

FY26 in numbers: volumes and EBITDA hit new highs

Nuvoco’s presentation positioned FY26 as a defining year, with record consolidated revenue and EBITDA. For FY26, revenue was reported at 11,338 crore in the highlights section and total income at 11,362 crore in the consolidated income statement. The company’s EBITDA expansion was supported by better pricing, operational initiatives, and continued premiumisation.

The company also reported net debt of 4,445 crore as of March 2026. On the call, management linked the higher net debt mainly to the Vadraj acquisition, while stating that operational cash generation helped reduce debt by about 300 crore on a like-for-like basis.

Growth pipeline: Vadraj and East expansion drive the 35 MMTPA plan

A major strategic theme is capacity expansion. Nuvoco reported operational cement capacity of 25 MMTPA, with a pathway to 35 MMTPA through the acquired Vadraj Cement assets and planned additions in the East. The company also reported operational clinker capacity of 13.5 MMTPA, rising to 17 MMTPA including Vadraj.

Vadraj Cement is expected to be operational in phases between Q3 FY27 and Q1 FY28. The presentation outlined progress and a roadmap across multiple assets.

In Surat, the grinding unit has completed key equipment and spare deliveries, established a 66 kV grid connection, and initiated trials. In Kutch, the clinker unit is in the middle of equipment upgradation and electrical panel testing, while the captive power plant is undergoing upgrades after a boiler residual life assessment. The Kutch grinding unit and waste heat recovery-related civil works were described as being on track, with VRM installation started. The railway siding approvals were said to be in advanced stages, with on-site execution commenced.

Alongside Vadraj, management reiterated an East expansion program of adding 4 MMTPA of grinding capacity in phases. On the call, management described this as debottlenecking spread across Jojobera, Odisha Cement plant at Jajpur, Panagarh, and Arasmeta, with about 1 MTPA per plant. It stated that debottlenecking at Jojobera and Panagarh is largely completed and awaits CTO approvals, with Jajpur expected in 2 to 3 months and Arasmeta by the end of calendar year 2026. The presentation also described the program as being carried out through FY28 via equipment upgrades, process modification, and internal debottlenecking.

Nuvoco also outlined a bulk terminal at Viramgam, Sachana in Gujarat with a dedicated railway siding and about 1.5 MMTPA handling capacity targeted for FY28. Management described it as a distribution hub for loose and bag cement, aimed at expanding Gujarat reach.

Costs and disruptions: fuel, bags and logistics emerge as near-term swing factors

While management remained constructive on the structural demand outlook, it repeatedly flagged near-term volatility. The company cited the Middle East conflict as a factor driving higher crude, petcoke and coal prices, and referenced INR depreciation trends.

On the call, management disclosed that in Q4 the blended fuel cost for the company was 1.44 per million kcal, broadly similar to Q3. For Q1, it guided to 1.51 to 1.55 per million kcal as higher petcoke rates begin to flow through. It also cautioned that Q2 could see further increases, depending on procurement timing and shipment pricing.

The packaging cost discussion was more acute. Management stated granule prices rose sharply, impacting bag costs, and that March had an impact of about 20 per ton at a consolidated level. For April, it indicated packing cost increases could be around 100 per ton, driven by granules and conversion costs. It also described risk of supply tightness in bags and granules, and said that in March, the company faced both bag shortages and reduced rake availability. It stated that the company could have achieved higher volumes in March without these constraints.

Management outlined mitigation levers across fuel mix and materials. It spoke about lowering petcoke usage at key eastern plants and increasing the use of domestic coal sources, along with raising AFR. It disclosed the company’s Q4 fuel mix at around 37 percent petcoke and 10 percent AFR, and set a FY27 target to raise AFR to above 13 percent. It also described efforts to increase FGD gypsum usage to reduce reliance on mineral gypsum imports.

In pricing, management said it had taken price hikes in April across markets, citing a need to offset cost inflation. It described trade price increases broadly in the 8 to 12 per bag range, and non-trade increases broadly in the 10 to 15 range, varying by geography and timing through the month.

Capex and balance sheet: spending rises as the next cycle begins

In response to a question on FY27 and FY28 capex, management guided to capex of 900 crore in FY27 and 960 crore in FY28. It indicated that a significant portion is linked to Vadraj refurbishment, with figures shared as 627 crore and 728 crore in the discussion.

Net debt at March 2026 stood at 4,445 crore, with management explaining that FY26 included investment for Vadraj acquisition and VEGL acquisition. It also reiterated a leverage comfort framework of 2x to 2.5x EBITDA.

Takeaways

Nuvoco’s FY26 print shows what the company can deliver when pricing supports and mix improvement stays intact. But the tone for FY27 is more about execution and resilience. Vadraj commissioning between Q3 FY27 and Q1 FY28 and the East debottlenecking program remain the medium-term enablers, while fuel, packaging and logistics availability are the near-term variables that can swing margins.

The key monitorables from here are the pace and stability of price hikes, the company’s ability to execute fuel mix shifts and raise AFR, and the on-ground progress at Vadraj and the East plants. FY26 established a high base. FY27 will likely be judged on whether that base can be protected while the next capacity cycle is built.