Nuvoco Vistas Corporation Ltd (NSE: NUVOCO) Q1 2026 Earnings Call dated Jul. 18, 2025
Corporate Participants:
Unidentified Speaker
Madhumita Basu — cheif investor relations
Jayakumar Krishnaswamy — Managing Director
Maneesh Agrawal — Chief Financial Officer
Analysts:
Unidentified Participant
satyadeep jain — Analyst
Naveen Sahadev — Analyst
Rajesh Ravi — Analyst
Tejas pradhan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Nuvoco Vista’s Corporation Limited Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Madhumita Basu, Chief Investor Relations. Thank you. And over to you Ms. Basu.
Madhumita Basu — cheif investor relations
Thank you Ranju. Good afternoon and thank you for joining our first quarter fiscal 2026 conference call. I’m excited to discuss our performance for the quarter and even more talk about the growth plans lying ahead. Firstly, Q1 was a major milestone, arguably the strongest first quarter performance in the history of the company. The company achieved a volume of 5.1 million tonnes, registering a growth of 6% compared to the same period last year. Consolidated revenue from operations grew by 9% YoY to reach 2,873 crores in Q1 FY26. Demonstrating superior operational efficiency and profitability, the company delivered its highest ever first quarter consolidated EBITDA of rupees 533 crores in Q1FY26.
This translates to a blended EBITDA per tonne of rupees 1052 per tonne marking a 16 quarter high and reflecting the impact of our sustained efforts towards cost optimization and value creation. Moreover, the price environment continues to be supportive with the price hikes implemented towards the end of 2024 sustaining till date amidst pricing stability. Our continuous organization focus on premiumization and trade sales has complemented the better pricing scenario in the markets. The share of premium products in trade volume has further improved to 41% while the trade mix reached 76% in Q. This notable improvement is a function of clear segment focus, a robust brand portfolio and a strong distribution network.
On the cost front, the company’s commitment to operational excellence remains firm. Despite a brief surge in Petco prices, the blended fuel cost at Rupees 1.43 permtl remained broadly in line with Q4FY25. As you probably have seen in the chart we shared in our investor presentation, the blended fuel cost has been a continuous reducing story with significant stability in performance over the last few quarters. To touch upon operational excellence, you may recall that we previously shared key initiatives such as Project Sprint and Project Bridge which have driven great objectivity and purpose in our cost saving efforts.
The Bridge program delivered rupees 86 per tonne cost savings over FY24 to FY25 broadly in areas of power and fuel cost optimization, elimination of material losses through stricter quality controls and process discipline alongside aggressively controlling damages and demoralized and increasing direct dispatches. This holistic approach to operational excellence has been instrumental in delivering the high EBITDA per ton we are reporting today. We remain committed to sustaining these efficiencies and creating sustainable value for our stakeholders. Moving on to the balance Sheet Strong performance over the years has enabled us to drive the deleveraging agenda. During the quarter the company reduced like for like net debt by rupees 880 crore crore y o wide to reach rupees 3474 crores netnet.
We delivered a hallmark performance in Q1FY26. Moving on now to our growth plans, I would like to highlight that 2025 marks our 11th year in the cement business. Since entering the industry in 2014 we have achieved the remarkable feat of expanding our capacity nearly 15 fold to reach 31 million tonnes. This quarter we successfully completed the acquisition of Bhadrar Cement Ltd. Bringing under our fold high quality assets including a 3.5 million ton tinker unit, a 6 million tonne grinding unit, captive limestones and a captive jetty. This acquisition is fully aligned with our strategy to expand our footprint in the Western region and add complementary capabilities to our existing operations in the North.
Historically we have demonstrated strong execution capabilities in successfully integrating and scaling acquired businesses. With strong project governance in place, we are well positioned to achieve the operational roadmap outlined in our investor presentation. To provide a brief update, manpower mobilization is progressing well with key personnel including those for port operations already onboarded. We have initiated the release of key goods and services purchase order to fast track ground refurbishment and visits from major OEMs are currently underway. Our current plan is to make the plants at Kutch and Surat and associated equipment including the jetty ready for dry runs by H1FY27 with full commissioning targeted for Q3FY27.
A few words here on the Cement demand outlook Cement demand during the quarter grew at a moderate pace impacted by intense heat, geopolitical situation and then early onset of the monsoon. However, looking ahead, we remain optimistic on demand post monsoon driven by significant capital expenditure planned by both the central and State governments particularly in housing and infrastructure sectors. For FY26 the central government has announced a capex plan of Rupees 11 lakh crores while state governments have proposed approximately 9 to 10 lakh crores. Additionally, the central government has introduced measures to expedite the completion of 1 lakh dwelling units through the creation of Swami Fund and is providing support to States for infrastructure development via 1.5 lakh crores in in interest free 50 year loans.
In the eastern states, 38,000 crore allocations have been made towards housing programs. These initiatives are expected to provide meaningful momentum to cement demand in the coming quarters. Finally, before wrapping up an update on sustainability, the company’s commitment to sustainability is evident as it continues to lead the industry with the lowest carbon emissions. Carbon emission footprint has improved further reaching 454 kg CO2 per tonne of cementitious material in FY25 compared to a figure of 457 in the previous financial year. With that I conclude my opening remarks. I am here with Mr. Jai Kumar Krishnaswamy, Managing Director of New Hope Ovistas and Mr.
Manish Agarwal, Chief Financial Officer. We are happy to address any questions you may have for us. Thank you.
Questions and Answers:
Jayakumar Krishnaswamy
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Shravanshah with Dollar Capital. Please go ahead.
Maneesh Agrawal
Yeah, thank you and congratulations on very good set of number. Yeah sir, can you hear me?
Jayakumar Krishnaswamy
Shaman, please continue. We can hear you.
Maneesh Agrawal
Yeah yeah. So the my first question is on the demand up front. So last time we have talked that for India we are looking at 7 to 8% and for us also similar kind of a volume growth. So just wanted to understand in Q1 how much do you think that the industry would have grown and for FY26 is the same 7,8% number remains constant and for us also similar 7,8% kind of a volume growth that we are looking at.
Maneesh Agrawal
For the other companies. Certainly for no CO we have been able to get 6% volume growth. However may end if you see monsoon had said early in most parts of India. In fact starting from Kerala all the way to Assam it happened in just one week’s time. So we did see little bit of a challenge in demand in east and north as well as west coastal regions. But that could be a little bit of a dampener in the overall stuff in the short run. But as Madhumita said, I think post the monsoon we are very well poised to get the 7, 8, 9% growth for the industry because GDP is at 6.5%.
That’s the prognosis forecast given by RBA as well. And also capex outplays will get implemented on the ground from Q2 onwards post monsoon. Overall, if you see post monsoon we are confident that this industry should grow anywhere between 8 to 10%. That’s the optimistic number, give or take here. And then it could be instead of 8 to 10 it could be 7 to 9. So it’s all in the ballpark of 7 to 10% kind of a number is what I see the industry moving this year.
Maneesh Agrawal
Got it. Second sir, in terms of the pricing that for us obviously it was a very good for this quarter. So currently the prices, if I have to compare with the, with the Q1, is it at the same level or is there any further improvement?
Madhumita Basu
Oh, on the pricing front I can talk on three parts actually I just have to go back to my previous call in quarter four call and the quarter three earnings call. Overall I think the market pricing as well as our prices started improving sometime in December onwards and it further went up in certain regions in our target markets in Q4. Happy to report when we came to Q1 FY26, the price continued to hold good in Q1 when compared to Q4 with small corrections as well happening in Q4 to Q1. But what is the positive engaging thing is as we enter Q2 in July, we still are able to hold prices as our company and we still command similar kind of prices and realization in the market three weeks into Q2.
operator
Thank you Mr. Shah. Please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Satyadeep Jain with Ambit Capital. Please go ahead.
satyadeep jain
Hi. Thank you. First question on the transaction. Just wanted to see where we are in the process. There is a bridge debt which is almost which is bigger than the mountain debt. Of course last time you were mentioning we’re very close to signing a deal. So just how what is the tenure of this bridge debt? Where are you in terms of signing that? In what form can we. Is it going to be like a convertible paper share just more details around this transaction that you’re working on.
Jayakumar Krishnaswamy
Since you mentioned about mountains, I think mountains are different heights across the various continents in the world. So Everest seems to be the highest. You got Kilimanjaro, then you’ve got Kanjunjanga, then you’ve got Atacamiya you have so many other that’s mountains in the world. So for us I think running a business which is over 10,000 crores, we have the right size of debt to grow the business. I just want to assure all of you we are mindful of how we run our company and we are very clear what kind of debt levels are helping the organization.
And if you really look at the last three to four years, one of the things which we have always said is for our company to grow and become larger and larger in the coming year at that level of 3500 to 4000 crores is a number which you would like to concentrate on and you would have seen certainly I think we met our commitment. What we have been talking in the last four years since our listing, our debt levels in Q4 came to 3,474. So when it hit 3,474, we got the license and the commitment which we made to all of you to grow.
And hence we have kind of invested in Batraj. And if you remember the last call, we did mention that when we are going to raise money to whichever instrument, we will be mindful that the money which we raise doesn’t impact the balance sheet in adverse manner. So I would want to assure all of you that out of this 1800 crores, 600 crores will be the long term debt. The balance 1200crores as mentioned available in the public domain would be through a instrument which will be through the CCPS or CCT road which will not be a debt instrument and not form into part of the debt instrument in the balance sheet.
So that’s how you’re working. We’re at a stage where we’re discussing with potential partners with whom you’re working to raise this capital. This bridge financing is for a short term period of maximum two to three months and I guess hopefully in the coming two to three months we should convert this debt into an equity like type of instrument.
Unidentified Speaker
Okay, second question on flag. In general you mentioned in the release that there was some tightness in, I mean there’s seasonal tightness in slag in this period. But it seemed like maybe there was more than typical what you see. So are you seeing some tightness in general across the board for snag and how are you looking to secure snag for the Bhadraj asset that you have also tying it? So this is also the plan to have 2.5 million ton cut gu. What does it mean that would you have more gu capacity versus clinker or because clinker is 3.5 and you’re setting up 2.5 million ton of Gu.
So eventually if you refurbish the entire Surat Gu, you will have excess grinding capacity. So just what’s the plan to secure slag for the upcoming capacity? What is the plan and are you overall seeing some tightness in slag in the market?
satyadeep jain
Okay, thanks. We’ll split the market in east and west stroke north. That’s how we define ourselves in east certainly. I think overall if you really look at the last two to three years and going forward there is indeed some tightness of slack in the market simply because many, many players are getting into the composite segment or the slag cement. So overall industry is also trying to get more blended cement in the form of slag cement. And you all of us know very well east is a market where slat cement or a composite cement acceptability is much more than any other region in India.
So that way overall slag availability is going to be a little bit of a scramble. And hence the current auction price for slag in east when compared to three years ago certainly has gone up from where we were in the past. Certainly NOCO is in a very good position. All of us know that Novoco has got close to about 2.1 million ton of 20 years lakh tie up with Tata Steel. Another 0.4 million of preferential allotment from Tata Steel at market price. So we are kind of covered up for about 2.5 million ton which constitutes to roughly about 55 to 60% of the overall slack needed for the company.
So Jojobara cement which we make is all funded through much lower than market price slack. However, the ones in Panagad and Jaspur where we have to kind of go for auction and that’s where there is going to be, there is a little bit of a tightness in not availability per se price. It is little bit higher. Blended slack price for NO co will be under checked. And one of the programs which we run in the organization is use of allied slack which is different from the regular blast furnace slack. We have had the capability to use allied slack in our factories and our target is to use close to about 75,000 tons of Allied slag in our plants which is welcome sign and it is the green initiative as well as different type of slag which we have proven and used in the market.
So that’s how the slag thing is being addressed in East. Coming to west about Bhadraj as we start the Vadraj Operations. We don’t have any plans to get into slack cement manufacture there. Gujarat is majority OPC and PPC kind of a market. And at this point of time we don’t have any plans to venture into Slack cement in future. If slack cement comes, we have the experience to launch Slack cement. That’s when we get into entry strategy. At this point of time we don’t envisage any slack cement. Hence slack requirement is not going to hamper our entry strategy in Gujarat.
Coming to setting up the landing unit In Kutch of 2.5 million tonnes, we had a choice to set a million, a million and a half or two million or two and a half million. Once you go buy these equipments, namely the vrf, the price differential between a million and a half and two million and two and half million. Hardly few crores here and there. So to really secure the long term capacity of the company we decided to put a 6.3 meter VRM which will give or make us flexible for many years to come. And hence the cutch capacity grinding unit is put up at 2.5.
The Surat as it came from Bhadraj to us has 3 mills of 2 million tonne capacity. And as I mentioned in the previous call, we will start one mill. We initially we want to start two mills. Now with Kutch two and half mill, two and a half million ton coming in we will start a Kutch mill at 2 and a half million ton and as soon as one mill will activate a 2 million tonnes to optimize the capex cost. And as we grow the market we will restart the restart the second mill and the third mill in the next three to five years.
To start with when we get into market commissioning the Vajraj itself we’ll have a 2.5 million ton mil in Kutch and a 2 million ton in Surat. Going little bit deeper into it up to Abbottabad. Lots and lots of OPC sales and hence getting clinker all the way from Kutch into Surat and then reverse straight back OPC into Ahmedabad was turning out to be little bit expensive. And hence we decided that make the OPC in Kachan directly bring OPC to bulkers into Ahmedabad, Saurashra and those markets. Last but not the least railway siding has come all the way to a place called Bior which is close to Nalia which is there in Kutch.
And the three of us and two other competitors have plants which are very close to each other. So the current view is also to go for a railway siding depth and the once the railway siding comes then we got lot of other options opening up by carting cement through bulker movement as well. Hence our whole idea of putting the gu in catch also is to get rake moment of cement plus in Surat we can get the OPC and PPC in the mill which we have in Surat. So hopefully that answers your query.
operator
Thank you Mr. Jain. Please rejoin the queue for more questions. Next question comes to the line of Naveen Sahadev with ICICI Securities. Please go ahead.
Unidentified Participant
Hello. Hello. Hello.
Unidentified Speaker
Am I audible?
Unidentified Speaker
Yes please.
Naveen Sahadev
Right, thank you for the opportunity. So two questions. First just a continuation of the previous question what is the total capex now because you mentioned now we are talking about railway siding so 1800 we paid for the asset and there is a cost to refurbish or get this asset up and running. And you also mentioned plans of railway tidying coming through. So if you could just break it down the total capex or total amount that the company plans to spend for cement all three mills and the railway siding put together and same in the same related to the same question.
What is the update on the thermal power unit we were to acquire or which is in the premises which belongs to jsw. Thanks.
Madhumita Basu
Okay, even if you’re not asked the part B of the question I would answer the part B as well. That was very clear. So our overall outfit till now which we had mentioned was close to about 600 crores and the 1600 crores involves mill and Surat gu in Kutch, Mel in Kutch refurbishment of the Kutcher sets as well as jetty refurbishment and also setting up the railway line in Kutch. One thing which is not included in 1600 was the acquisition of the Captiva plant. We’ll add another 200 crores to getting the Captiva plants. We are currently under discussion.
So it will we go and take few crores here and there. So overall we’re looking at an outlay of 1600 plus 200 crores at this point of time to set up the refurbished asset and commission the GU and get into the market in the next one and a half years.
Naveen Sahadev
Right so. So 1600 and 200 is what you said. So 1800 and 1800 basically total 3600 is the way total capex for the asset.
Madhumita Basu
You can look at it that way.
Madhumita Basu
And railway siding cost.
Naveen Sahadev
Oh that will be little bit of. I can give you a ballpark number. We are currently working on that. So typically we still not done the what you call survey of where the railways is Putting up the platform in Bayou and from there on next call you’ll be able to tell because there are a lot of place somebody is working on some parts of siding. So I guess by the time we meet next time we’ll be able to give a clear picture. However suffice to say since we put up railway siding in Chajpur as well as Sonadi, we have a fair idea.
It should cost anywhere between 110, 130 crores.
Madhumita Basu
Understood. Thank you so much. My second quick question was about like you know the freight cost. So of course congratulations and very heartening to see the sequential realization improvement. But there is some bit of a increase on the freight cost per ton as well. So is there any one off and or any increase in lead distance? Any thought on this cost of freight will help Three specific reasons.
Naveen Sahadev
First reason is quarter one had little bit of a rake availability in the month of May and June in two or four sites in RSMET as well as Jojobira. While our rate coefficient remained the same. We had to move material to Bihar from our Panagat side. Hence the freight cost increased due to rerouting from Jojobara and RS Mehta and move it to Panagat. So that’s reason number one. Reason number two is our Haryana cement plant is now under maximum capacity utilization and almost fully ramped up and reaching peak levels. So once the Haryana cement plant comes from Nimble plant into Haryana.
So semi finished goods or a clinker moment rate increased because of full utilization of Haryana plant. That’s the reason number two and point number three Q4 to Q1 Q4 we ran thin clinker stocks in north and we also had to take our Chithor plant on shutdown in this quarter. So we were running thin on clinker. So we had to move cement from Arasmeta, Sonali, Rizda all the way to westwards to MP Indore, Gwalior, Ratlam markets. So that’s the reason why freight cost on this side increased. So reason number one rake availability. Reason number two is shut down and increased in distribution cost from East West.
And number three is increased semi finished goods movement from Nimble into Haryana.
operator
Thank you Mr. Sahadev. Please rejoin the queue for more questions. Next question comes to the line of Rajesh Ravi with HDFC Securities. Please go ahead.
Rajesh Ravi
Good evening and congrats on good set of numbers. You know continuing on this freight expenses which you mentioned, you know which have gone up by almost 145 rupees. Q& Q. So you know all these additional costs which have come up, would you believe that this should normalize back to 1400 level per tonne in subsequent quarters?
Madhumita Basu
Yeah. Thanks Rajesh for your comment. Certainly. I think we are targeting to bring it down. Number one of the key agenda for bring down this freight cost in the ensuing quarters. One of the key agenda we are driving this quarter one and then going forward is to reduce the lead distance by close to about 10 to 13 kilometers. And I guess the entire sales team has been instructed to deliver more, sell more products in home markets and thereby reducing the lead distance as well as move away from STM movement and final sale into so increasing direct dispatches to the market.
This is an agenda which we are driving very hard in this year and we expect this number to come down by about 70, 80 rupees in the coming quarters.
Rajesh Ravi
Okay, great. And so meanwhile can you also share those head, you know, housekeeping numbers like what is the lead distance for this quarter and fuel mix, pitcoot linkage, non king linkage and TSR.
Jayakumar Krishnaswamy
Okay. Lead distance for this quarter came at 334 and in terms of fuel mix we ended blended MCAL at 1.43 which is over a period of last 16 quarters. It’s been kind of continuing, continuing at a lower reducing trend. But suffice to say that we have more or less bottomed out in terms of price of petcoke or domestic open market coal or linkage coal. From now on any reduction can happen only by optimizing the fuel mix as well as to get our efficiencies going. So that’s the target which we will take forward. And in terms of AFR we are at 10% this year, little bit less because we had certain issues where there were some issues in Chhattangarh from the external world about use of AFR in the cement factories.
We are more or less dealing with that point. Once we deal with it we’ll go up on the AFR. You see it, the shredder which we commissioned in Q4 in Chittor is fully operational now. So nimble Chittor and Brzar. Our targets to get target is to get the AFR up to about 15%. It should happen post monsoon. Monsoon may little bit less AFR will be used because of the moisture content in AFR post monsoon. In H2 of this year we are targeting 15% AFR. Petcoke should come less than 40% in H2 whereas currently it is about 44%.
operator
Thank you Mr. Ravi. Please rejoin the queue for more questions. Next Question comes from the line of Tejas Pradhan with Citigroup. Please go ahead.
Tejas pradhan
You said the cement, raw material, power and fuel.
Tejas pradhan
In the ppt.
Madhumita Basu
Can you share those numbers? Looking for raw material prices, Is it possible for us? If you can reach out to our teams. Can we give you all details on a separate call please? Otherwise I’ll have to read out the number. No, no problem, no problem.
Unidentified Participant
And secondly on the Bhadraj financing you.
Unidentified Participant
Had mentioned 1200 crore will be a.
Unidentified Participant
Equity type instrument which will not come on the balance sheet from a debt perspective. So once the asset is completely ramped up would you hold like 100% in.
Madhumita Basu
The company or would there be other equity investors? Too early for us to comment on. How will we, what do you call, wrap up this in the future. But certainly we are looking at prevailing market conditions and continued improved market conditions conditions as well as improved operational profitability and coming through better operational control and saving. We are looking at much better operational results in the next two to three years and beyond. So these instruments we are looking at anywhere between four to six years. So our viewers as we reach around four year period from now, which is FY29 we should be having the ability to do a put option on these things and clean up the debt in case market conditions are difficult.
It’s in the open public platform that then the investors will have a call option on the parent company. Put option on the parent company.
operator
Thank you Mr. Pradhan. Please rejoin the queue for more questions. Next question comes to the line of Pratik Kumar with Jeffries. Please go ahead.
Unidentified Speaker
And congratulations, my first question is on.
Unidentified Participant
Capex and depreciation interest basically. So how do you like click capex in like 26, 27, 28 like you said, 3,600 crores plus some maintenance. Capex, how would you split this in next three years? And the related question is how do you expect run rate of depreciation interest to move from quarter to one year?
Unidentified Participant
Okay, second one first. In terms of depreciation and interest cost you’re looking at anywhere between give or take 5 crores here and there, about 200 crores of depreciation and just about 100110 crores of interest. That’s the kind of number you can keep quarter on quarter going forward and in terms of overall Capex plans. So as mentioned last year, last call, certainly this year and the year next and the third year from now we are very clear that not much of any, not big expansions or no big expansion happening in any of the plant. Hence to sustain our operations we are looking at a capex of close to about 100150 crores.
That’s the kind of money we’ll spend to run our assets in the next three years. And there’ll be adequate cash from the operational results to the tune of a about 600 odd crores in this year. Another 600 next year and the balance money will be sent in year three to commission Bhattaj assets.
Unidentified Speaker
Okay, so. So around 2500 crore this year and 700 crore each in next two years. Is that how we should look at it?
Unidentified Participant
How would you. I’m looking at capex as such. 1800 is the investment which we have made. We’re looking at a capex of close to 600 crores to refurbish the asset and then next year another 600. And the year three is a balance money which will be close to about another 600 crores. That’s the kind of phasing we are looking at to commission Madras assets on top of it to sustain the no operations we’re looking at close to about 100150 crores of capex in coming year and the next two years.
operator
Thank you Mr. Kumar. Please rejoin the queue for more questions. Next question comes from the line of Jyoti Gupta with Nirmalpang. Please go ahead.
Unidentified Speaker
Thank you so much for the opportunity. A great set of numbers. I have only one question on the realization side. We have seen an improvement of almost like 295 rupee per ton in increment realization on a Q on Q basis. Was there any realization which is of quarter four which is not absorbed in quarter one which is not absorbed and therefore is a over to quarter one because there was some erosion of prices in the center. So I mean could you. Is there possibility to get a breakup in terms of cement realization? Is it because the sale of premium cement was higher or how was it because as per my understanding we had 200 rupee increase in realization but this is almost like 295 rupees.
Very decent increase in realization basis.
Jayakumar Krishnaswamy
I won’t be able to give region wise realization. I guess you should be able to find out from various of all companies. But certainly I’ll talk about our results. Realization improvement has happened due to very clearly two or three agendas. The first one is to get our premium products going across the country like we mentioned in the last time. We launched concrete to Uno late last year and happy to report Concrete owners continuously growing quarter on quarter and we have it’s Kind of being rolled out in all the eastern markets. Duraguard microfiber again was focused on few markets and purely at one point of time.
We are selling only on the Duroguard channel. But we took a decision in Q4 and Q1 this year that we should roll out the Duraguard microfiber also in the Double Bull channel. The channel by the name of Double Bull doesn’t exist. But we had a set of dealers, we enrolled them at one point of time and we launched Double Bull in certain key markets. And then we made a decision to kind of get into the regard microfiber to get the premium penetration going in the key markets of Haryana, Rajasthan, Western up, Gujarat and Chhattisgarh. Happy to report that of Duraguard microfiber sales more or less increased by 50% from Q4 to Q1.
And there’s a huge thrust in the premiumization of Jaragua Microfiber contrary to UNO certainly continues to leapfrog in the key markets of Bihar, Bengal and Jharkhand. We will launch UNO in concrete to UNO in Orissa as well in the coming days. All these things resulted in a historical high premium product sale of the company to 41% in Q1. So that’s one of the key reasons for our railway station in Q. The second one also is because of the overall focus on the company to focus on trade share. Our trade share also hit a very high number of 76% in the 13 quarter high which again kind of improved realization.
And for us I think focusing on premium, focusing on trade channel and last but not the least big time focus on home markets in Chattangarh, Jharkhand, Rajasthan. Narayana, we’ve got large gus will reduce our freight cost going forward. And these three levers are going to improve realization in the coming quarters.
Unidentified Speaker
Just a follow up question on this. When you mentioned Orissa, as I understand FY25 Orissa declined by 12% on a Y basin quarter four also we’ve almost seen like an 18% decline because of this political, you know, shift in political in the power, in the governance. Do you think FY26 Orissa will see some sort of stabilization? Because already the market is. All the projects have installed and everything is into litigation. And then you’re saying minimization into, you know, you know, looking at Orissa as you know, launching your. This Double Bull that you said, do you think it will be possible or is it like it’s too early to.
To actually venture into the market which is in a declining phase Right now.
Unidentified Participant
I can’t talk about specific state level uptick or downtick because we operate in all the states in east and also almost all the states in west and north put together. So I will refrain from saying what is going to be a state level strategy. But certainly I think all this blips up and down seasonal and every state will grow eventually. India as a country is slated to grow 6.5% at the GDP level and the cement industry in India will grow at 7 to 10% is what initially meant. So we are very optimistic at this kind of growth levels in medium to long term.
Short term lifts will happen in every place. So personally as our company and leading our company, I’m not greatly worried about 1/4 or 2/4 issues in any state. Orissa eventually will also grow like Chattangarh, Jharkhand, Bengal and Biyard and we will be able to reap the benefits of the growth in every state.
operator
Thank you. Please rejoin the queue for more questions. Next question comes on the line of Kirija Ray with the securities. Please go ahead.
Unidentified Speaker
Hi, thanks for taking my questions. So the numbers are really great with respect to this you know capacity utilization it is 82% that’s quite a good for the first quarter FY26 so just wanted to check this 82% capacity utilization is this is there any clinker cell or it’s a pure cement cell we have done.
Unidentified Speaker
We don’t do any clinker sale at all actually we do clinker partner with a few companies which it helps them as well as healthcare but we don’t do any clinker sale and it’s all clinker for internal use.
Unidentified Participant
So we can say it’s a. It’s a very good sale for this quarter despite having a lot of challenges like no the summer wave and all these things just I have few concern about the debt part like the debt is quite high what I see and on top of that we are taking some 1800 crore of debt also. So so how we are going to manage our net debt to EBITDA level for next two years and how is the repayment schedule what we are looking for for next two years. And one more question that if I consider if I Compare last quarter, fourth quarter FY25 the tax expenses, current tax and this quarter this quarter it is higher side.
So what’s your comment on those two things?
Madhumita Basu
I’ll answer the first one. I’ll have to go back in history to explain your question. Really jump back to June 2021 our debt level was 6885 and then it came to 5347, it came down to 4506, it came to 4358 and we are at 3474. So I think we got a proven track record of running the operations in a smart manner to pare down the debt. And as I have been telling in the past, of course we are comfortable operating over debt level of anywhere between 3500 to 4000 crores. At a consistent level there will be blips which will go back since we have borrowed now it goes up.
But I think over a period of next two to three years you will see our debt numbers coming down. So we are comfortable operating debt at about 3,500 to 4,000 and we are not kind of greatly worried and it will certainly be less than two and a half times. Our target is to bring debt levels to twice of EBITDA and that’s the kind of two to two and a half times is a worst case. But ideally we should target even less than two as well.
operator
Thank you Mr. Ray. Please rejoin the queue for more questions. Next question comes from the line of Patanjali Srinivasan with Sundaram Mutual Funds. Please go ahead.
Unidentified Participant
Am I.
Unidentified Speaker
Hello? Yes you are.
Unidentified Speaker
Yeah. Thank you for the opportunity. Kangara’s a very good set of numbers. I just wanted to understand in terms of ground scenario what has changed for the current quarter from the last two quarters in terms of demand and any color on region wise activities, activity level improving, anything of that sort. If you can give us some details.
Unidentified Participant
I won’t be able to give you region wise color. I guess that should be picked up from various results of various players who are region focused or national focus. We have broad based results all the way from west to north to east center. We’ve got a very small percent but we still operate in this markets. However, in terms of overall demand in these markets, I think demand has been steady in these markets in the last six to nine months. As far as low cost performance has been concerned. At one point of time in Q2 and Q1 last year our focus areas was to because the cost pressures were pretty high in those times and we really focused on value over volume over a period of time.
We also kind of made a tweak in our strategy to not only go for value because we had kind of set up such kind of cost saving programs in the organization we were getting to getting reaping the benefits of the cost saving programs. Into Q2 and Q3 we also made a little bit of an aggressive play to get volumes going in a sensible manner. And hence in Q3 last year we did grow double digit and in Q4 last year we grew high single digit. And again in Q1 we have been able to get a 6% volume growth.
So overall we have been able to get the growth in line with the market growth and not kind of lose market share because of the value or volume. And we are pretty comfortable blending the value strategy as well as doing a very sensible move to get volume for the organization.
Unidentified Speaker
Has demand improved? Sir, just related question. That is my actual question. So has demand like improved at the ground level? Is activity levels improving? Do you see any either housing or infrastructure, any of these segments where you’re seeing much more of a pull factor?
Unidentified Participant
Yep, clear I guess. Thanks. So that’s the question I guess H1 last year 1 did feel the pinch in demand with pre election and post election and funds not happening and budgetary allocations on pms, other state programs did not take off and in our speeches we were mentioning that those were little bit not on the ground we could see. But as we navigated the year and come into this year we can see things improving on the ground. Currently because of monsoon there will always be little bit of downside but we should not worry about drop in demand due to monsoon.
But on a yearly average as we go forward, industry is needed to grow anywhere between 7 to 10%. 10 at a very optimistic level, at 7 at a very realistic level.
operator
Thank you Mr. Srinivasan. Please rejoin the queue for more questions. Next question comes from the line of Ashutosh Murarga Choice Institutional Equities. Please go ahead.
Unidentified Participant
Hello, thank you for the opportunity.
Unidentified Speaker
I have a question on Madras Acquisition.
Unidentified Participant
Funding plan by via ccp.
Unidentified Speaker
Can you please highlight the merits of this versus conventional debt to equity financing? I won’t. I won’t be able to tell you all the nitty gritties of the financing because currently under discussion it will not be appropriate to discuss all the details but suffice to say we are very mindful of the balance sheet strength of no co and hence as part of fundraising we did borrow 600 crores as a long term financing which will remain as a debt on the books of no co. But the balance 1200 crore is going to be through the instrument of CCPS and CCD which will not figure as a debt on the balance sheet and terms and conditions of it.
We are currently under discussion. So I guess once it is done we will be able to share with you the stuff and the future strength of balance sheet is also ensured by the CCPS and CCB rule. Okay, thank you.
Unidentified Participant
Thank you. Next question comes from the line of Satyadeep Jain with Ambit Capital. Please go by.
Unidentified Speaker
Hi, thank you for the follow up. Jay, just two questions. One on the railway line that you’re talking about this point since you are one of the reasons for putting up the gu. Out of many reasons, one is obviously the opportunity to sell cement through rail internally. In the end where what is the plan? Because the railway line is coming to Mundra or you mentioned there are other possibilities of where the railway because it’s still somewhat far from your plant. What is the plan and when is the line coming? As for you, that’s the first question.
Unidentified Participant
On just understanding the railway line has come to a place called Nalia. Nalia is a place which is close to 40km from our location in Crutch and post. Nalia is a place called Vairoor Virus is just about 15 20km from our site and the other two players who are also in the site and hence broadcast is already so from reliable sources and also talking with railways we got to know that the railway line is also going to go further down from Yor to other places. Then it becomes not more than 7,8 kilometers from our site and hence it becomes extremely prudent for us to exploit the railway opportunity.
That’s how we made this call.
Unidentified Participant
And what is the status of that? Sorry, I missed that. Any idea by when this will get commissioned?
Unidentified Participant
So railway line is already commissioned up till Vayur actually. In fact one of our competitors is also using the open platform to dispatch Clinker from there.
Unidentified Speaker
Okay. Second, just wanted to understand the product mix you mentioned 41%. I don’t know if Concreto would also not be Concreto, you know Uno but also Concreto would qualify as premium cement. And just over time over the last two, three years. What is the how has the product mix evolved in terms of Concreto Duraguard Double Bull? Just maybe some some insight you can share.
Unidentified Participant
That breakup of each category I will avoid giving but suffice what I will try to explain to you is our best product is Durocard and that’s on the A category in the marketplace. So we are right in the benchmark products in all the markets we operate. We operate in the A category in all the key markets with no corporate Durocard on top of it comes in the Duraguard category. In the PPC category we have Microfiber which is close to 24 rupees more than the big product. And then we have Quantrito in the pure slack category which is again 2530 rupees more than the base product.
And ono is another 20 odd rupees more than the Concreto franchise. In the key markets of east and in terms of individual volumes I would not like to say what happens there. But overall if you see every state in Bengal, Dharkhand, Bihar. If you can look at the volumes which we sell close to about company we are at 41% at the east level or premium percentage is much higher than the national level.
operator
Thank you Mr. Jain please rejoin the queue for more questions. Next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead.
Unidentified Speaker
Just follow up question. This cement to clinker ratio is holding on steady at around 1.72. I believe there is expectations of taking IT up to 1.83. So what is the roadmap over there? And second when you said this 1800 crore is already paid and this 1800 crore additional capex does this include 200 crore towards the CPP acquisition also?
Madhumita Basu
Yeah. On the CK ratio Rajesh east of CK Rat issue is tone above north to a Zika ratio is lower than is much lower because of the PPC and OPC stuff. So at a blended level of ck issues at 1.74 it will be we are striving to get the each CK ratio all the way up to 2.1. Maximizing more and more blended cement and getting more and more slack cement which should overall improve. But as you’d be aware that as we enter Bhadraj and market in Gujarat Maharashtra we will end up selling more OPC on this market.
So to sustain a 1.75 CK ratio in the long term will not be possible. East we will certainly sustain 2.1 that kind of number north will be less. Our blended target still will be to hit 1.74 at a loss. That’s going to be the goal for the company in terms of the CPP cost. That’s why when I mentioned about there was a question regarding the power plants I said up front I wanted to tell 1800 was the cost of the asset which we paid to the bankers and then committee of creditors and then we going to refurbish the asset at another 1600 crores looking at 200 crores to fund the CPP.
So we had to look at 1800 plus 1600 plus 200.
Unidentified Speaker
Okay. And lastly, what is the total cost saving you’re looking at for FY26 and could you break it up between headings? FY25 over FY26?
Madhumita Basu
Yeah. We are targeting a cost saving of close to about 50 odd rupees over and over FY25 in FY26 on a full year average. The key program being getting our allied snack from the current 45,000 to 75,000 tonnes per month. Then we are also debottlenecking the WHR waste sheet recovery system in Nimble from the current 4.7 megawatt to 6.6 megawatt with a very small capex of close to about 10 odd crores. And that should kind of reduce the power cost in north. Increase the AFR percentage from the current 12% to excess of 15 16%. And over a period of next month and half years.
We’re also setting up a hybrid wind and solar in north region and reduction of lead distance by close to about 12 to 15 kilometers. The Orissa siding is currently under commissioning. Another two months from now with all the permits and approvals from railways come Q3 we will have 100% clinker movement to Jaspur via our siding. All this put together should deliver close to 50 rupees this year over last year.
operator
Thank you Mr. Ravi. Please rejoin the queue for more questions. Next question comes from the line of Girijarve with yes, securities. Please go ahead.
Unidentified Speaker
My questions are answered. Thank you very much.
operator
Thank you. Next question comes from the line of Shavanshah with Doll Capital. Please go ahead.
Unidentified Speaker
Hi sir.
Unidentified Participant
Is it fair to say, the way we are saying that the prices currently are stable and let’s assume if it remains stable for Q2 and then given the cost, particularly the freight cost which is higher for this quarter and we are seeing 70, 80 rupees per turn kind of a reduction and overall portfolio reduction is there, is it fair that this 1000 rupees EBITDA per ton thousand rupees plus is maintainable?
Unidentified Speaker
Our target and endeavor will be to sustain this kind of profitable builds. And some conditions are certainly favoring Noko. And some of the strategies which we have put in place is working for us. Namely the cost savings program, the premiumization program, the trade share program and for markets program. All these cannot be taken away. These are all internal levers. The internal levers will continue to focus and will bear fruits to us. And as I answered Rajesh’s previous question, the other cost saving agenda for the country as the year goes by and we Will get quarter on quarter sum amount of saving full year.
We are looking at close to 50 rupees. If the prices don’t go south we should certainly be able to sustain this kind of profitability in the coming quarter and beyond. Great.
Unidentified Participant
Great to hear that. Another thing is our last time sir, we said that for vadaraj in the FY27. Once we start in Q3 we are looking at I think 0.3 or 0.4 million ton kind of volume. And then 2 odd million ton. If you can clarify that.
Unidentified Speaker
Currently in the state of Gujarat we sell 1 million tons. Both trade and non trade put together. This 1 million tons comes from our Chittor and NE facility. And then it is either coming through Bulkar or back momentum. Distributed largely in Surat, Banaskarta, Baroda and some in Ahmedabad. And that’s the kind of Godra. This is the area we sell. We don’t sell in much other larger part of Ahmedabad and we don’t sell in Saurashtra and Kutch. So our plan is as we speak we are establishing networks. We have a full fledged regional sales organization as we being deployed.
And over a period of next six to seven months our plan is to establish channels, identify third party agents for non trade key account development. All those agendas being put in place as we speak. And our target is when we close this year and come into Q1 next year we should be able to improve this number from the current 1 million tons to maybe 1.2 1.3 million tonnes. And by the time the facility is ready our channel will be established, key accounts will be established, the branches will be established in the key market. And when the plant is ready, our target Is in year one get incremental 0.3 0.4 million tonnes lower and above the current 1 million tonnes FY27 end we are targeting close to about anywhere between 1.5 1.8 million tonnes of sale in Gujarat.
operator
Thank you ladies and gentlemen. Due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to Ms. Madhumita Basu for closing comments.
Madhumita Basu
Thank you Paranitu. Ladies and gentlemen, thank you for your questions which we trust have been well addressed. Our investor relations team will remain available for any further clarifications that you might require. To conclude we remain firmly committed to driving sustained growth and expanding our market presence. With the successful acquisition of Azraj Cement the company is well prepared to operationalize the plants at Kutch and Surat by Q3FY27 thereby and strengthening its footprint in the western region. In parallel, we will continue to focus on strategic priorities such as premiumization, geo optimization, cost efficiency to enhance our competitive advantage and create long term value.
Thank you to all of you for being here with us today. Wish you a good day.
operator
Thank you. On behalf of Nuvoco Vistas Corporation limited that concludes this conference. Thank you for joining us. You may now disconnect your lines.