Strong Q1, margin headwinds ahead; execution on track

Delivered revenue ₹3128.7 Cr (+8.9% YoY), PAT ₹159.6 Cr (+19.9% YoY), OPM 18.2%

Revenue YoY +8.9% driven by mix + pricing; net profit growth +19.9% confirms cost management

NPM 5.1% with inflation headwinds confirms fuel discipline held; call detail is credible

Prior guidance was Q2-Q3 FY27; actual July 11 is early execution

Call made July 14; claim is forward-looking, not yet validated by reported results

Prior: ₹900 Cr. Now: ₹900 Cr (₹370 spent Q1). FY28: ₹950-1000 Cr (unchanged).

Prior: 7-8% market growth FY27. Now: Targeting 7-8% with incremental volume from Gujarat. Q1 delivered 5% (limited by rail constraints).

Prior: 2 MTPA CTO mentioned. Now: Panagarh & Jojobera CTOs 'almost done', Jajpur & Arasmeta by end FY27. Timing pushed (not urgent for FY27), but targets unchanged.

Prior: Moderated capacity growth → pricing stable. Now: Reaffirmed stable; held first 14 days of July; no active price increases but costs holding. Implies limited upside.

Currently 1.3-1.4 MT in Gujarat; targeting 2 MT annualized by Q4 FY27. Incremental 0.6-0.7 MT from Chhattisgarh clinker (till Kutch Q3-Q4). No price dilution planned; focus on dealer network expansion.

Panagarh & Jojobera CTOs almost done; Jajpur NIPL underway; Arasmeta complete by end FY27. Timing not urgent for FY27 (adequate capacity), needed for FY28 volume ramp.

Price: ₹10 trade, ₹20 non-trade in East; ₹10 trade, ₹10-12 non-trade in North. Geo-mix: higher sales in high-realization markets (Chhattisgarh, Rajasthan, Western MP). Premium brands (Concreto, Microfiber, Uno) now 5-6 MT combined.

Q2: Fuel capped ~1.52-1.55 (petcoke inventory stable). Packaging expected ₹20-25 relief. Q3: Higher inventory costs from May-July purchases, but selective booking minimized impact. Overall Q2 cost line ~flat to +₹30-40/ton.

Surat: Year 1-2 aggressive volumes (low margin) to recover capex. Year 2-3 EBITDA/ton will equal North India. Kutch: 3-way strategy (maritime route for clinker, grinding in Kutch for OPC/PPC, Sachana bulk terminal for Ahmedabad market) reduces risk vs peers.

No specific guidance on EBITDA/ton forward. Strengths: geo-mix, premium brands (Concreto, Microfiber), trade/non-trade blending. Pricing stable (not rising); capacity adds modest, so pricing power sustained. Cannot commit to ₹1000+ per ton.

East clinker capacity was 40-42 MT, peaked 60 MT (over-supply period). Only 2-3 new clinker units coming in 3 yrs. Market growing 7-8%. In 18-24 months, East utilization crosses 80% → pricing strengthens → East EBITDA/ton improves. Cannot commit parity but confident on trajectory.

Target 7-8% (market growth benchmark). Q1 could have been +2L tons higher but for rake/diesel shortage. Demand was 7-7.5%. Going forward 7-8% achievable; incremental from Gujarat.

Too early to quantify. Expecting ~₹100/ton cost inflation Q2 vs Q1 (fuel flat, packing -₹20-25, power +₹40-50 for shutdowns). Pricing assumption: stable. Cannot commit to specific EBITDA/ton.

Blended: 82%. Petcoke: Q4 37%, Q1 27% (10% reduction via Sonepur Bazari coal, sweetener usage). Coal: Q4 53%, Q1 67%. AFR: Q4 10%, Q1 6%.

Based on market demand observed 7-7.5% in Q1, government capex up 13% YoY to ₹2.5L Cr (20% of FY target). No new material headwinds expected post-monsoon.

Pricing held first 14 days July; no hikes taken. Q2 offset: packing relief ₹20-25/ton, fuel flat ~1.52-1.55, but power +₹40-50 (shutdowns). Risk: if geopolitical escalates, petcoke spike again (spiked to ₹2.56, management booked at 2.05-2.15).

Vadraj complete (ahead of schedule). Kutch clinker/grinding and Sachana bulk terminal on track for Q3-Q4 FY27 and Q2 FY28 respectively. Routine capex for optimization included.

West Asia conflict drove petcoke to ₹2.56/mcal in Q1; management navigated via inventory booking. If conflict escalates, petcoke can remain elevated; coal availability from Eastern Collieries (Sonepur Bazari) provides partial hedge but not full immunity.

Q1 saw railway rakes diverted to coal movement (power sector demand); Nuvoco forced to move clinker by road at +₹50/ton freight cost. Monsoon sets in Q2; management expects rake normalization (August 1 lean season discount), but seasonal cycles create quarterly volatility.

Surat grinding unit online, but clinker sourced from Chhattisgarh cluster till Kutch live (Q3-Q4 FY27). Logistics costs and aggressive volume-building strategy (dealer network expansion prioritized over pricing) will depress EBITDA/ton. Recovery to company-average EBITDA/ton assumed by Year 2-3.

Current assumption: industry discipline (2-3 clinker units in 3 yrs, capacity growth sensible pace). If major players announce unexpected capacity or price wars intensify, Nuvoco's 'stable pricing' assumption cracks. Premium brands (Concreto, Microfiber) provide some moat, but not immunity.

Panagarh & Jojobera CTO 'almost done'; Jajpur NIPL underway; Arasmeta technical design done. Pacing deferred to end FY27 and Q1 FY28. If delays persist, FY28 volume targets (4 MT incremental East capacity) at risk. But management says not urgent for FY27 (adequate capacity).