Cost momentum offsets Q1 volume miss; value-over-volume pivot maturing

INR 4,241/MT in Q1 vs INR 4,447 in Q4 FY26; includes INR 110/MT West Asia headwind absorbed

EBITDA INR 1,589 Cr on revenue INR 9,500 Cr = 16.7% confirmed

Q1 saw -7% total volume, -2% trade, -21% non-trade YoY. July early data not yet confirmed

Up from 74% prior quarter. Claims supported by regional growth in North (+2% trade)

45 Cr units sold; management expects 50% consumption in Q2. Benefit real but transition-phase selling masks full upside

Prior guidance ~80MT FY27. Now 8% growth on base of ~77MT implies ~83MT (vs ~86-87MT under old 80MT + 8% logic). Effectively -3-4MT guidance. Trade focus sharpened to >75% (achieved 78%).

FY27 cost target INR 4,250 on track (Q1: INR 4,241). NEW: INR 4,000 or below by FY28 (INR 250/MT additional reduction). Concrete trajectory: INR 5,000 (Holcim legacy) → INR 4,241 (Q1 FY27) → INR 4,000 (FY28 target).

1MT low-EBITDA volumes explicitly cut in Q1; focus now on improving those cost structures (green power, AFR) to make them viable, not to recapture at old margins. ~3.5MT of old ACC/acquired capacity temporarily suspended (6-month timeframe).

Prior: 60% green power share by FY28. Clarified: 48% on revenue+consumption basis today; path to 60% clear. 1,122 MW capacity target by FY28 (vs 973 now). WHRS 376 MW by FY28 (vs 228 now).

July already showing 8% trade growth; brand equity momentum with channel partners building. Acquired assets (Penna, Sanghi) improving utilization. 10MT new capacity coming online across quarters will support volumes.

45 Cr sold; expect 50% (20 Cr) consumption Q2 onwards. Grid power ₹7-8/unit; RE cost benefit clear. Some units sold due to transmission infra gaps (being resolved 2-3 quarters). Inclination toward consumption, not sale.

Accounting treatment differs (some peers net off costs, we don't). June quarter disruptions (diesel shortages, packing back issues) created aberration. Confidence trade/premium momentum will close gap going forward.

Temporary suspension (6 months) for cost optimization, not permanent closure. No impairment taken; when/if permanent closure decided, treatment will follow. Learnings: acquired assets require time; integration ongoing.

Still deliberating with auditors on quarterly amortization under accounting standards. Until settled, reporting on actual basis (industry norm). Follow-up underway with auditors.

Multiple engines firing: clinker factor (-3%), fly ash sourcing, RE power (₹4.9 vs ₹5.9/kWH), fixed cost optimization, logistics (₹10/MT from lead distance). All contributing; RE component embedded but not isolated.

FY27 target 12-15% (up from 7%). 25% is longer-term aspiration. First coal block operationalized in ~30 months; 5-6 year payback on investment. Confidence high but numbers early.

Non-trade volumes on acquired assets were negative/marginal EBITDA, dragging returns. Variable cost of such volumes doesn't justify fixed cost burden. Once cost-competitive (green power, AFR online), will bring them back profitably. Value, not volume.

Q1 -7% volume was strategic (non-trade exit + maintenance downtime). July +8% trade growth cited as recovery signal; 9M growth needs ~12% to hit 8% FY average. Confidence medium given short track record of recovery.

Management explicit: NSP is market-driven (beyond control). Margin support comes from INR 4,250/MT cost target (FY27) and further INR 250/MT reduction (FY28). Fixed cost optimization + structural efficiencies the lever.

Capex split growth (new capacity) vs efficiency (WHRS, RE, rail infra, BCFC). Capacity additions 10.2 MT by FY27-end; 8-10 MT annually thereafter (organic only, no M&A).

NSP down ₹100 vs UltraTech YoY despite focused trade/premium strategy. Accounting treatment differences cited as partial excuse. Underlying demand/mix dynamics may be shifting.

7% YoY volume decline; 2% trade, 21% non-trade. Only peer to post volume decline in listed space. July +8% trade early signal but unconfirmed. At 65% utilization (intentional), leverage is constrained.

Penna (South) requires channel investment & ₹100-150 Cr AFR/WHRS capex. Sanghi improving but Maratha clinker delayed to FY28 Q1. Orient at 87% but margin-dependent on MSA with Ambuja.

Q1 absorbed ₹110/MT West Asia headwind (diesel shortages, packing back disruptions). If escalation continues, mitigations (inventory buffer, cost savings roadmap) may be insufficient. Monsoon impact on demand unquantified.

Maratha clinker pushed from FY27 to FY28 Q1 (contractor delays highlighted). Mundra greenfield deferred to 2029. Jodhpur in trial mode; commercial in Q2 FY27. WHRS/AFR expansion dependent on new capex execution.