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Strong Q4 performance despite cost headwinds: Nuvoco Vistas delivered a landmark Q4FY26 performance, achieving its highest-ever quarterly sales volume of 6.0 million tonnes , representing growth of 5% YoY and 20% QoQ. Quarterly EBITDA rose to a historic high of  Rs.588 crore , primarily driven by better-than-expected realizations, as grey cement pricing increased 3.3% QoQ to  Rs.5,065 per tonne. For the full year FY26, the company reached record volumes of 20.4 million tonnes and successfully expanded its industry-leading premium product share to 43%. While net debt remained elevated at  Rs.44.4bn following the acquisition of Vadraj Cement (VCL), management noted that operational efficiencies and prudent capex management helped achieve an underlying debt reduction of  Rs.300 crore on a like-to-like basis. This robust performance underscores the company’s ability to drive volume growth and maintain premiumization despite a challenging macroeconomic environment.

Near-term margin pressure from input inflation: Management anticipates immediate margin pressure, guiding for an estimated  Rs.200 per tonne cost inflation impact due to geopolitical tensions affecting energy and packaging markets. Packaging costs have spiked sharply as granule prices rose from  Rs.99/kg to  Rs.155/kg, contributing to a  Rs.100/tonne cost impact expected in April 2026. Furthermore, fuel costs are projected to rise to  Rs.1.51–1.55/Mcal in 1QFY27 as higher-cost petcoke flows through the system. To mitigate these headwinds, Nuvoco implemented price hikes in April 2026 ranging from  Rs.8–12/bag in trade and  Rs.10– 20/bag in non-trade segments. Simultaneously, the company is aggressively optimizing its fuel mix by reducing petcoke consumption and scaling up Alternative Fuel Resources (AFR) to 12–13%. These proactive cost-saving measures and pricing discipline are essential monitorables for protecting the margin profile in the coming quarters.

Constructive demand outlook and expansion on track: Management remains positive on the structural demand story, guiding for industry volume growth of 7–9% in FY27. This optimistic outlook is supported by a planned 20% increase in central government capex and robust housing demand, particularly in East India where state-specific housing schemes are valued at approximately  Rs.29,000 crore. Growth visibility is further secured by the Vadraj project, with clinker and grinding units scheduled for phased commissioning between Q3FY27 and Q1FY28. Additionally, the board has approved a 1.5 million tonne bulk cement terminal at Viramgam, Gujarat , while East India debottlenecking (4mt) remains on track for completion in phases through FY27. Despite recent volatility, the company’s focus on geographic optimization and capacity expansion through brownfield projects at Chittorgarh and greenfield sites at Gulbarga provides a clear runway for medium-term volume leadership.

Outlook & Valuation: Nuvoco Vistas reported a healthy Q4FY26, with revenue and EBITDA supported by record quarterly volumes and a 43–44% premium trade mix. Cement volumes increased 5% YoY to 6.0 million tonnes, while the Vadraj acquisition and East India expansions are projected to scale total capacity toward 35 MTPA by FY28. This trajectory is supported by FY27-28 capex guidance of  Rs.900–960 crore. Although near-term geopolitical tensions and packaging inflation present margin risks, the company is implementating fuel optimization and scaling AFR to 12–13%. Despite elevated net debt of  Rs.44.4bn, operational efficiencies enabled a  Rs.300 crore underlying debt reduction on a like-to-like basis. Factoring in a 7–9% industry growth outlook, the BUY rating is maintained with a target price of  Rs.451.

Key Highlights:

* Historic Volume and EBITDA Performance: The company achieved its highest-ever quarterly sales volume of 6.0 million tonnes (up 5% YoY and 20% QoQ) and a record quarterly EBITDA of  Rs.588 crore. For the full year FY26, Nuvoco reached a landmark 20.4 million tonnes in volume.

* Premiumisation Strategy Success: Industry-leading premium products maintained a record 43–44% share of trade volumes. This strategic focus, alongside better-than-expected realizations of  Rs.5,065 per tonne, significantly supported the record EBITDA performance.

* Navigating Immediate Cost Headwinds: Management is bracing for a  Rs.200 per tonne cost inflation impact due to geopolitical tensions affecting energy and packaging. Packaging costs spiked as granule prices rose from  Rs.99/kg to  Rs.155/kg, driving a projected  Rs.100 per tonne impact in April 2026. » Proactive Mitigation Measures: To offset rising costs, Nuvoco implemented price hikes in April 2026 of  Rs.8–12/bag in trade and  Rs.10–20/bag in non-trade segments. Additionally, fuel mix optimization aims to reduce petcoke usage while scaling Alternative Fuel Resources (AFR) to 12–13%.

* Growth and Capex Roadmap: FY26 capex stood at  Rs.712 crore. Guidance for FY27 is  Rs.900 crore and  Rs.960 crore for FY28, primarily focused on the Vadraj project refurbishment. The board also approved a new 1.5 million tonne bulk cement terminal in Gujarat.

* Managed Debt Profile: Net debt reached  Rs.4,445 crore following the Vadraj acquisition. Despite this, operational efficiencies and prudent management resulted in a  Rs.300 crore reduction in debt on a like-to-like basis over the fiscal year.

* Constructive Demand Outlook: Management remains positive, guiding for industry volume growth of 7–9% in FY27. Growth is expected to be fueled by a 20% increase in central government capex and strong state-level housing schemes in East India.

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