- Coal accounts for 66% of quarterly fuel mix
- Gujarat expansion reshapes future fuel and freight requirements
Nuvoco Vistas expects healthy cement demand and recent price increases to support its December quarter performance, but rising energy costs will absorb part of the benefit.
For coal and petcoke suppliers, the company’s September-quarter commentary points to continued fuel requirements alongside increasingly selective procurement. Coal remains its largest fuel source, while advance purchases provide coverage through the December quarter and into mid-February.
The Gujarat expansion adds a further dimension: new clinker production will create additional thermal fuel demand, while grinding capacity, coastal clinker movements and renewable electricity will reshape the company’s energy and logistics requirements.
Volumes grow, but costs constrain earnings improvement
Nuvoco sold 4.7 mnt of cement during Q2FY27, up 9% y-o-y. Consolidated revenue increased 13.5% to approximately INR 2,790 crore, while EBITDA rose 11% to INR 411 crore. Mainstream coverage reported net profit of approximately INR 65 crore, up around 78%.
The earnings growth nevertheless lagged revenue growth at the operating level. Using rounded disclosures, EBITDA margin was approximately 14.7%, against around 15.1% a year earlier.
Management described northern demand as robust, while eastern markets remained sluggish during the quarter. It expects industry demand growth of approximately 8% in the second half and company volume growth of around 8-9%.
Sources: supplied conference-call notes, company results coverage and CleanMax. Fuel-cost figures are reproduced as quoted; the notes label them INR/Mcal, which requires confirmation before publication. Fuel-mix shares total 99% because of rounding.
Coal dominates procurement, petcoke remains expensive
Coal accounted for 66% of Nuvoco’s Q2 fuel mix, compared with petcoke at 27% and alternative fuels at 6%.
These shares show a predominantly coal-based fuel strategy. They do not establish coal tonnage, origin or calorific value, and should not be converted directly into purchase volumes.
Management highlighted petcoke prices around $190/t as a continuing risk. Advance procurement provides supply visibility, but the expected increase in blended fuel cost shows that coverage does not eliminate cost inflation as purchased material enters consumption.
For suppliers, this suggests that the immediate opportunity may lie more in replenishing forward requirements than in assuming substantial uncovered spot demand.
BigMint’s October vessel records identified a 60,370-t US non-coking coal cargo for Nuvoco at Kandla. This demonstrates participation in imported coal procurement, although the record does not separately identify the parcel as NAPP or ILB.
Cement price increases offer a potential cushion
Management indicated cement price increases of approximately INR 20/bag across key eastern and northern markets following late-September and October adjustments.
It expects these increases to hold through the remainder of the quarter, supported by post-monsoon demand. Higher volumes could also improve fixed-cost absorption.
However, announced market increases do not translate immediately or uniformly into net company realisations. Product mix, discounts, geography and the timing of sales will determine the actual benefit.
Nuvoco expects total costs to rise approximately INR 100-120/t sequentially in Q3, including INR 70-80/t from energy. Management believes sustained cement price increases could more than offset this pressure.
The central earnings question is therefore whether prices hold as volumes recover.
Gujarat expansion changes location of future fuel demand
Nuvoco commissioned 2 mnt/year of grinding capacity at Limla, Surat, during Q2, taking total cement capacity to approximately 27 mnt/year.
The Kutch integrated facility is expected to start in phases between Q3FY27 and Q1FY28, with management referring to 3.5 Mnt/year of clinker and 2.5 Mnt/year of cement capacity.
For energy watchers, the distinction matters. Grinding capacity adds electricity consumption and clinker-handling requirements; clinker production creates the main incremental kiln-fuel requirement.
Nuvoco plans to move clinker through the jetty to reduce transport costs. Railway works within the plant yard and the Viramgam terminal are also progressing.
These investments could improve movement flexibility, but their benefits depend on coordinated commissioning and utilisation. Management expects Gujarat profitability initially to be below the company average, with convergence over two to three years.
Expansion priorities shift towards Vadraj
The approximately 4 mnt/year eastern debottlenecking programme has been deferred by six to eight months to Q1-Q2FY28 as Nuvoco prioritises Vadraj execution and cash allocation.
This changes the timing and geography of incremental demand rather than removing the expansion opportunity.
Management guided FY27 capital expenditure of approximately INR 1,200 crore, including INR 780 crore already incurred in the first half. FY28 expenditure is expected at INR 800-900 crore.
For suppliers, commissioning milestones and clinker utilisation will provide a better guide to additional fuel requirements than headline cement capacity alone.
Renewable electricity addresses another part of cost base
Nuvoco’s renewable partner is CleanMax, rather than TeamLease as stated in the supplied notes.
The Rajasthan project comprises 20 MW of wind, 26.4 MWp of solar and a 2 MWh battery system. Expected annual generation is approximately 100 MU, supplied through the state open-access network. cleanmax.com
This can improve electricity cost visibility, but it does not directly replace the thermal fuel used in clinker kilns.
BigMint assessment
Nuvoco’s outlook supports continued coal and petcoke demand, but procurement will remain sensitive to delivered energy costs.
Near-term requirements are substantially covered. The larger opportunity develops as Kutch clinker production ramps up and Gujarat logistics become operational.
For suppliers, the strongest commercial proposition will combine suitable fuel quality, competitive delivered cost and dependable scheduling. For energy watchers, the key indicators are clinker output, fuel mix changes and utilisation — not cement capacity additions alone.
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