• Achieved record annual volume of 20.4 million tonnes and highest-ever EBITDA of INR 1,881 crores in FY26
• Q4 FY26 marked landmark quarter with first-ever 6 million tonne volume and historic quarterly EBITDA of INR 580 crores
• Premiumization expanded by 300 basis points year-on-year to reach 43% in FY26, establishing industry-leading position
• Vadraj cement project progressing on schedule with kiln and grinding units planned for commissioning in phases between Q3 FY27 and Q1 FY28
• East expansion program of 4 million tonnes grinding capacity through debottlenecking at Jojobera, Panagar, Rishra and Arasmeta plants progressing well, awaiting final CTO approvals
• Establishing bulk cement terminal at Viramgam, Gujarat with 1.5 million tonnes handling capacity and dedicated railway siding, targeted for FY28 commissioning
• Capacity utilization in North reaching 95% levels indicating strong demand environment
• Government capex momentum supporting demand with central government capex planned up 20% and state capex up 15% for FY27

Nuvoco delivered its strongest annual performance in FY26 with record volumes of 20.4 million tonnes and EBITDA of INR 1,881 crores, while expanding premiumization by 300 bps to 43%. However, the company faces severe near-term margin pressure from unprecedented cost inflation - packaging costs up INR 100/tonne in April, petcoke costs rising, and rupee depreciation - which management estimates at ~INR 200/tonne total impact that current price hikes of INR 8-12/tonne only partially offset.

Nuvoco achieved its best-ever annual performance in FY26 with volumes reaching 20.4 million tonnes (up from 19.4 million tonnes in FY25, representing ~5% growth) and EBITDA of INR 1,881 crores. Q4 FY26 was a landmark quarter with 6 million tonnes volume and EBITDA of INR 580 crores. The company ended FY26 with net debt of INR 4,445 crores versus INR 3,640 crores at the start, with the increase primarily due to the Vadraj acquisition investment of INR 1,800 crores plus INR 100 crores for Rishra acquisition. After adjusting for INR 900 crores CCD proceeds, the company actually reduced debt by INR 300 crores on a like-for-like basis through operational efficiency. FY26 capex was INR 710 crores (versus guidance of INR 700 crores). Lead distance remained at 325 km in Q4. The company maintains debt at 2-2.5x EBITDA target range. Blended fuel cost in Q4 was INR 1.44 per million kcal (coal at 1.27, petcoke at 1.84, AFR at 0.9). The company's CK ratio stands at 1.72 overall (2.1 in East, lower in North due to OPC mix).

Management demonstrated a balanced tone - proud of record operational achievements but clearly concerned about unprecedented near-term cost pressures. MD Jayakumar emphasized this is not a normal demand-supply scenario but 'unique times' with cost inflation affecting all industries. The team stressed proactive mitigation measures including: reducing petcoke consumption by 300-500 bps in East and 200-300 bps in North, increasing AFR usage from 10% to 13% target for FY27, shifting to domestic coal sources, and implementing efficiency programs. Management explicitly stated they will not 'buy growth by throwing money' and will prioritize profitability over market share gains. However, they acknowledged that current price hikes of INR 8-12/tonne only partially offset the ~INR 200/tonne cost inflation expected. CFO Manish provided transparent cost breakdowns and acknowledged 1-2 quarters of margin pressure ahead. The team expressed confidence in structural demand growth of 7-9% for FY27 based on government infrastructure spending and housing schemes, particularly the INR 29,000 crores state housing schemes in East benefiting their market leadership position.

Nuvoco faces severe near-term headwinds that management acknowledges will pressure margins for 1-2 quarters. Packaging costs have spiked dramatically - granule prices surged from INR 99/kg in February to INR 155/kg in March, causing INR 20/tonne impact in March escalating to INR 100/tonne in April. Management noted packaging availability is also constrained due to Bangladesh food bag supply disruption and fertilizer season demand, with industry-wide shortages affecting production. Petcoke costs are rising from INR 1.84 per million kcal in Q4 to an estimated INR 2.01, pushing blended fuel costs from INR 1.44 to INR 1.51-1.55 in Q1 with further increases expected in Q2. Mineral gypsum costs increasing INR 20/tonne due to Oman supply line disruptions. Rupee depreciation amplifying all import cost pressures. Railway rake availability severely constrained in March (down from 4.5 to 4 rakes/day) due to government diversion for coal transport to power plants, forcing costly road transportation. Management estimates total cost inflation of ~INR 200/tonne while current price hikes only achieve INR 8-12/tonne blended increase. Geopolitical uncertainty from ongoing conflicts creates unpredictable crude-linked cost trajectory. Potential diesel price increases post-election could further impact freight costs. Northern region capacity constraints at 95% utilization limiting volume growth until Vadraj commissioning.

Revenue Outlook: Management targets 7-9% volume growth for FY27 in line with expected industry growth, supported by 20% central government capex increase and 15% state capex increase

Margin Outlook: Expects margin pressure for 1-2 quarters due to INR 200/tonne cost inflation (packaging +INR 100/tonne, fuel cost increase, gypsum +INR 20/tonne) partially offset by INR 8-12/tonne price increases; further price hikes not ruled out if cost inflation continues

Key Targets:

• Commission Vadraj kiln and grinding units in phases between Q3 FY27 and Q1 FY28
• Complete East debottlenecking of 4 million tonnes by end of FY27 (Jojobera and Panagar ready pending CTO, Rishra in 2-3 months, Arasmeta by year-end)
• Increase AFR usage from 10% to 13% in FY27
• Reduce petcoke consumption by 300-500 bps in East and 200-300 bps in North
• Maintain debt at 2-2.5x EBITDA levels
• Commission Viramgam bulk cement terminal in FY28
• Capex of INR 900 crores in FY27 and INR 960 crores in FY28

The Q&A session revealed analyst concerns centered on three main themes: (1) severe cost inflation and adequacy of price increases, (2) capacity expansion timelines and debt trajectory, and (3) demand outlook and competitive dynamics. Analysts probed extensively on cost details - packaging, fuel, and freight - seeking to understand the margin impact magnitude. Management was transparent about the challenges, providing detailed cost breakdowns and acknowledging 1-2 quarters of margin pressure, but emphasized mitigation efforts through fuel mix optimization, AFR increase, and operational efficiencies. Questions on debt increase were clarified with management explaining Vadraj acquisition impact and demonstrating underlying operational cash generation. Analysts sought reassurance on price hike sustainability given approaching monsoon seasonality, with management emphasizing this is an industry-wide cost crisis requiring price adjustments across sectors. The tone from analysts was cautious but engaged, seeking to quantify near-term headwinds while acknowledging strong structural demand drivers. Management maintained a balanced, credible tone - proud of operational achievements but realistic about near-term challenges, and committed to protecting profitability through multiple levers rather than buying growth at any cost.