Nuvoco Vistas Corporation Ltd (NSE: NUVOCO) Q3 2026 Earnings Call dated Jan. 16, 2026
Corporate Participants:
Bishnu Sharma — Head of Investor Relations
Jayakumar Krishnaswamy — Managing Director
Maneesh Agarwal — Chief Financial Officer
Analysts:
Jashandeep Singh Chadha — Analyst
Amit Murarka — Analyst
Satyadeep Jain — Analyst
Rajesh Ravi — Analyst
Prateek Kumar — Analyst
Tejas Pradhan — Analyst
Shravan Shah — Analyst
Navin Sahadeo — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Nuvoco Vistas Corporation Limited Q3 FY26 Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Bishnu Sharma, Head of Investor Relations from Nuvoco. Thank you, and over to you.
Bishnu Sharma — Head of Investor Relations
Thank you, Yashasvi. Good evening, everyone, and a warm welcome to Nuvoco’s Q3 FY26 earnings call. The result, along with the earnings presentation, has been uploaded to the stock exchange website yesterday, and I hope you had a chance to review the key numbers. Let me first share the key highlights for Q3 FY26, after which we will open the floor for questions.
The quarter began on a challenging note, but as we progressed, we started to see encouraging signs of recovery in overall demand. This improvement was particularly visible in the latter part of the quarter as the impact of earlier macro headwinds began to subside. Encouragingly, capital expenditure by both central and state governments seems to have gained momentum, supporting infra activity and cement demand. With this gradual pickup, the broader demand environment appears to be strengthening, setting a constructive tone for the quarters ahead.
That said, a significant portion of the plant spending is yet to be exhibited. Around 45% of central capex and nearly about 61% of state capex remains pending as of November 2025. The healthy pipeline of pending projects gives us comfort that this traction could continue in the coming months. Additionally, as an above-normal monsoon, a software-integrated environment, and growing consumer confidence, particularly in rural areas, further reinforce our outlook for sustained demand growth going forward.
Now, turning to our performance for the quarter. We delivered robust results despite the early challenges from macro headwinds as mentioned earlier. Volumes grew 7% year-on-year to 5 million tons, the highest Q3 volumes ever recorded in our company’s history. December was particularly strong, with volume growth of 20%, demonstrating our strong existing capabilities and the resilience of underlying demand. EBITDA for the quarter rose approximately 50% year-over-year to INR386 crores. Even as price moderated more than the benefit passed through following the revised GST rate coupled with macro headwinds. Our emphasis remains squarely on premiumization cost efficiency, which significantly lowered the impact of the price moderation.
We are pleased to report that the premium products sustained their share of trade volumes at a historic high of 44%, marking the consecutive quarter at this elevated level. We have consistently expanded our premium base over time. For the nine months of FY26, premiumization stood at 43%, reflecting a steady uplift of nearly 300 basis points over the FY25 baseline of 40%. This establishes a new, stronger base for us going forward and will continue to support our performance.
On the cost front, we continue to efficiently manage our operational cost as we achieve the lowest blended cost in the last 17 quarters at 1.41 per Mcal, despite the recent uptick in pet coke prices. Raw material cost per ton, distribution cost per ton also declined quarter-on-quarter, supported by operational efficiency gains. Coming to cement prices, given the improvement in demand conditions and positive outlook, the company undertook a price increase in January, which is expected to further improve our performance going forward.
Let me now turn to the balance sheet. During the quarter, we raised INR600 crores through CCD expenses, which were utilized to replace an equivalent amount of short-term bridge financing, thereby reducing overall debt level. We expect to complete an additional INR600 crores of CCD expenses in the near term to substitute the remaining INR600 crores of short-term bridge financing. Our continued focus on a disciplined approach to debt management reflects prudent capital allocation and will support the company’s growth agenda going forward.
Let me briefly touch upon the Vadraj Cement plant. The refurbishment and project execution remains on schedule with operationalization of clinker unit and grinding unit planned in phases from Q3 FY27 to Q1 FY28. To give you a quick update on our project assumption, we have made steady progress at both Kutch and Surat. At this site, key equipment is undergoing extensive overhaul. The engineering, tendering, and ordering of all goods and service packages at Surat are now complete, while activities at Kutch are progressing as per schedule.
Deliveries on the electrical and instrumentation front remain on track for both locations, and mechanical supplies have already started arriving at the site. We’ve also applied for all the required permits to operationalize this plant in line with our planned timelines. On the logistic front, the engineering skill plan and detailed project report for the Kutch railway line have been submitted to Indian Railways, and the execution order is now at an advanced stage of processing.
By the first half of FY27, we expect to complete the overhauling work and equipment installation, followed by trial runs in accordance with OEM protocol. We will subsequently establish operations from the control room. Accordingly, during FY27, Surat grind unit and Kutch clinker unit will become operational, while in H1 FY28, Kutch grinding unit will get commissioned.
The East expansion projects of adding 4 million tons per annum in phases also remains on target. With the East expansion and commissioning of Vadraj plant, the company’s total cement capacity will scale up to 35 million tons per annum. Post the ongoing expansion at Vadraj and the East expansion, the company’s growth agenda will continue with a firm focus on balance sheet discipline. We have several strategic options ahead, including expanding our presence in the North through a brownfield project or pursuing a greenfield development in the Gulbarga region aimed at strengthening our position in the western and central markets. Furthermore, our recent preferred bid status for the JMKR2 limestone block in Jodhpur and Pali enhances our mining reserve bases, providing a strong platform for future expansion.
Lastly, to briefly highlight our ongoing realization effort, we have further strengthened efficiency and transparency throughout the operation. Our customer portal now handles approximately 99% of the total orders, offering real-time control and precision in order management. Following its success in cement, we launched a customer portal for our MBM business too. During the quarter, we introduced Nuvoco Zero M UNNATI App under MBM to digitize influencer loyalty, driving higher engagement, greater transparency, efficiency, and data-powered channel growth. On logistics, the transporter portal now covers inbound and outbound logistics across all plants, delivering end-to-end visibility while minimizing manual interventions.
That concludes my opening remarks. I’m here with Mr. Jayakumar Krishnaswamy, Managing Director of Nuvoco Vistas; Mr. Maneesh Agrawal, Chief Financial Officer. We’re happy to answer any questions. Over to you, Yashasvi.
Questions and Answers:
Operator
Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. We’ll take our first question from the line of Jashandeep Singh Chadha from Nomura. Please go ahead.
Jashandeep Singh Chadha
Hello.
Operator
Can you use your handset mode, please? Your line is not very clear.
Jashandeep Singh Chadha
Yeah. Is it better now?
Operator
Yes, please go ahead.
Jashandeep Singh Chadha
Yes. Yeah, hi. Thank you for the opportunity, and congratulations on a good set of numbers despite weaker pricing. Just wanted to understand a couple of things. Firstly, you mentioned that Nuvoco took a price hike in this month. So I wanted to understand when did you take that price hike and how much was the price hike? And is the price hike sustained in the market? First question was that. If you can clarify that, then I’ll proceed with my next question.
Jayakumar Krishnaswamy
Yeah, I guess after tepid quarter three in terms of pricing, January, December, our demand improved, and then the sustained demand continues in January as well. So around 10 to 12, around that time, we have taken a price rise in non-trade across the geographies in the month where we operate. And also in the trade channel, we attempted a price increase in East as well as North. We’ll have to wait for a week or so to see whether the price rises, which we have taken sustained, but as of now things look positive.
Jashandeep Singh Chadha
Okay. Okay. Good to know, sir. And has the demand tapered off after the price hike or the momentum continues, which you saw in the first 10 days?
Maneesh Agarwal
Other than the 14, 15, these are all festive times, so I guess I’ll have to discount — it’s two days before and today. I guess demand [Technical Issues]in the first 10, 12 days of the month. So give or take, I think typically after Sankranti demand improves in all the regions. So, that’s been the past trend. So it should continue to improve going forward as well.
Jashandeep Singh Chadha
Okay. Good to know, sir. My second question is on cost. Nuvoco has been doing impressive cost numbers. Now recently we have seen pet coke prices going up. So I wanted to understand in the fourth quarter what will be the impact of that and going forward as well. And also if you can shed some light on your capex plan, the amount for next year, FY27 and ’28, and how should we look at this?
Jayakumar Krishnaswamy
Yeah, as Bishnu mentioned in his initial comment, our fuel cost rupees per million cal trended at 1.41 in Q3, which, if you could have seen in the last many quarters, we have come to around thereabout kind of a number for a few quarters now. We will continue this trend. Already pet coke prices have gone up in the month of December and including — I’m talking about the current trend of pricing. I guess in Q4, I’m still looking at a similar kind of number, give or take a little bit of 0.01 or something like that, but that’s all insignificant changes that may happen.
These are basically backed up by two, three aspects of the company. One is to work on our AFR agenda in North, the two mass customers [Phonetic] in Risda. The second one is using domestic open market coal. For the first time in the last many years, in the preceding quarter, we have started using a good amount of domestic open market coal in our North plants, and that kind of helped us sober the cost lines of fuel in North, as well as increase our domestic open market coal in our East plant.
And last but not the least, our focus has been to kind of reduce the pet coke consumption from a high of 48% all the way it come down to 41% now, which is an impressive number. With this kind of pet coke production, we will be able to offset the rise in pet coke prices, if any. And also our teams have been very innovative in trying to use what they call power plant reject coal and as well as coal washery reject coal for our CPP plants, bringing down the power cost of CPP from close to about INR0.90, INR0.95 per million cal to as low as INR0.78, INR0.8 per million cal.
So basically substitute to reduce pet coke consumption. Second is to get increased focus on AFR, and last one is to kind of work on CPP coal. With all these three initiatives, I think we should be able to defray the potential increase in pet coke prices at prevalent levels. In the unlikely event of a big time increase, I guess that’s going to be a challenge for the entire industry, but as we see today, we have fuel stocks for a month or two right now. And with the fuel stocks which we have, we should be able to sail through quarter four.
And on the second point about capex plans, in the previous call, we had spoken about the overall capex outlay for the company. Obviously, we have the capex for the existing operations as well as capex for the Vadraj. So, overall this year as of nine months, we have spent close to about INR320 crores of capex as of December, and in the balance three months, we should be able to spend — we should be spending close to about INR200-odd crores. So for the full year the capex outlook is coming anywhere between INR620 crores to INR630 crores.
Jashandeep Singh Chadha
Okay, sir. And then, if I can squeeze in one last question. A lot of advantages that you mentioned for Nuvoco, especially on the cost front are — in the eastern assets. But when we start, Nuvoco, start Vadraj a lot of these advantages will not be there. So, in the initial years, can you give a sense of how much the cost might increase, as capacity ramps up at Vadraj?
Jayakumar Krishnaswamy
You are talking about what happens when Vadraj starts? Okay.
Jashandeep Singh Chadha
Yes, sir.
Jayakumar Krishnaswamy
So Vadraj starts — look, anyway Vadraj is going to be run on pet coke fuel for a kiln similar to our Nimbol and Chittor. So the ballpark number will be same as what Chittor and Nimbol numbers in terms of fuel cost per kiln. The other advantage is Vadraj is one area we have lignite. So the captive power plant is going to be based on lignite as a fuel. So when we have done the initial calculation, our energy cost for Vadraj plant, other than the startup challenge of starting a new plant, other than that, I guess in terms of somewhat steady state, our fuel cost, energy cost — it will also have a CPP similar to what we have in Chittor and Nimbol. So, it’s kind of a copy of our North operations. So the cost lines of Vadraj in terms of power and fuel will be more or less same as what we get in Nimbol and Chittor as we start the plant.
Jashandeep Singh Chadha
Understood, sir. Thank you so much. I’ll join back the queue.
Operator
Thank you. We’ll take our next question from the line of Amit Murarka from Axis Capital. Please go ahead.
Amit Murarka
Hi, good evening. Thanks for the opportunity. So just a question on leverage. So in the presentation, I think you see — you’ve shown debt at INR4,217 crore and plus INR600 crores as short-term bridge loan and CCD. So just wanted to understand a bit more about the CCDs, as to what are the conversion terms and by when does it come up for conversion?
Jayakumar Krishnaswamy
It’s — during the last call and the one before, we have already said that when Nuvoco reaches INR3,500 crores to INR4,000 crores, that’s when we kind of start our next expansion, which — that’s how we started the entire Vadraj process. And the entire fundraising bid for Vadraj was we had to pay INR1,800 crores as an acquisition cost for Vadraj. So to get that INR1,800 crores funding, so we had started with INR600 crores of long-term debt and another INR1,200 crores of bridge financing till the CCD route was decided by the organization.
So first I’ll explain the INR600 crore. The INR600 crore sits in this INR4,217 crores as mentioned in our investor presentation. The INR4,217 crores debt level at December ’25 has a built-in number of INR600 crores. So if you have to do a like-to-like comparison of our past periods, this number is INR3,617 crores and which compared to December last year it was INR4,350 crores. And that’s the kind of debt reduction deleveraging company has been able to do in the last few years. So INR3,617 crores, adds INR600 crores, INR4,217 crores, and that INR600 crores is set in our books as a long-term debt for Vadraj acquisition.
We mentioned that the INR1,200 crores will be in the form of a CCD. I will ask Maneesh to explain how we have gone about doing the INR1,200 crores in two INR600 crore tranches.
Maneesh Agarwal
So, in terms of the specific terms of the CCD, which is the tranches that has been done in the month of November, as one of the queries. So basically there is a call option and a put option as a part of the CCD. So Nuvoco will have the call option and will have the right, though it’s our obligation to buy out the investor depending upon our balance sheet position at that point in time and the market conditions. So basically this call option is sizable at the end of the fifth year, at the end of 5.5 year, and at the end of the sixth year. So these CCDs are for a period of seventh year. And as I said, the call option is after five-and-a-half, six years. So this INR600 crore CCDs series A, this is into three tranches of INR400 crores each [Technical Issues] that I’ve talked about, and it is mandatory. It gets converted into equity at the end of the seventh year. And it carries a coupon rate of 0.1% in the books.
Jayakumar Krishnaswamy
Yeah, INR600 crores, just to pick up from Maneesh, so it’s consummated at seven — five years plus. At the time, Nuvoco’s balance sheet will be much stronger than where we are currently. So we have the call option at the time. And it’s, as Maneesh says, INR200 crore, INR200 crore, INR200 crore. The second INR600 crores, we have still not completed the long-term — short-term debt into CCD, I guess due to year-end holidays in the market. So we are still under discussion, should be concluded in the coming days.
Amit Murarka
Okay. Okay. So what I understood is that it is compulsorily convertible into equity at the end of the seventh year?
Jayakumar Krishnaswamy
That’s right.
Amit Murarka
And what will be the price at which it gets converted?
Jayakumar Krishnaswamy
So I think you can take these things offline or separately from the investor relations department. So as I said it is a call option at the end of fifth year, five and a half, six years from the Nuvoco’s perspective. So the intent would be depending on the market conditions and —
Maneesh Agarwal
I think at that time we should have a pretty strong balance sheet to kind of use the call option and repay the CCD. That’s the idea which we have. In the most unlikely event, that’s when I guess the put option will be exercised on the promoters of the company.
Amit Murarka
Understood. So you are — basically the idea is to essentially repay off this in the fifth year itself and through the cash flow that you will generate in this period and not really wait for the conversion into equity?
Jayakumar Krishnaswamy
No, absolutely, that’s the intention. I guess as we speak, we would be three years from now at a CAGR of 7%. Obviously, the business will grow to a much higher volume, and also with the volumes coming from Vadraj and with the overall, what you call, market opportunity, we should be able to generate much more cash, and the balance sheet should be much stronger. And as I mentioned the kind of business projections which we have in place, we should also be able to fund the Vadraj capex through internal accruals, and then we should be able to retire the CCD.
But I just want to mention one another point to you is many times I have mentioned, and also almost all times I have mentioned this particular point in the call, stating that as a company we are comfortable operating the company with the debt levels of INR3,500 crores to INR4,000 crores. That won’t continue to be — we are not going to be going into the path of retiring all the debt. I’m sure if really business scales up to that level, this debt level also should come down. But we should also — we would be able to — we would be — we have the ambition of growing the company beyond Vadraj as well. So I guess we are comfortable with a debt level of about INR3,500 crores, and at that time with EBITDA coming, we should meet our covenants. So we — targeting EBITDA to debt level around 2-ish at the time as well. So comfortable question to retire the CCD on a call option and still grow the company.
Amit Murarka
Sure. Just on the last question on the CCD bid. So at the fifth year when you have the call option to buy the debt out, will it be bought out at INR600 crores, or will there be something additional that will be required to be paid?
Jayakumar Krishnaswamy
It has to be additional because that’s how the whole structuring is done because all the so-called interest adjustment will happen into the principal of INR600 crores, which is in the form of CCD, and then the payout will be happening on top of all the yearly component numbers when it comes to the fifth year.
Amit Murarka
So what is the implied interest? I just want to understand, while I understand that this is a structured transaction debt —
Jayakumar Krishnaswamy
No worries. So, Amit, what will we do is [Technical Issues] share this, so this should get into a long discussion. So may I request you to reach out to us, come over to our office, or let’s set up a call? We’ll explain all of it in complete detail in — because obviously all of it is in the public domain. So, we should be able to give you all details. So anything that is needed, reach out to us. We should give you every bit of detail.
Amit Murarka
Okay. Sure. Sure. Thank you so much.
Operator
Thank you. We’ll take our next question from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi. Thank you. Just a follow-up to this CCD question. The remaining INR600 crores, still we are in a tie-up. Is that — have you locked in — basically the investors are more or less identified. Is it the same set of investors? Is it just some procedural delay? Just wanted to understand, where are you in the process? It’s been a while since that Vadraj deal happened. Obviously, you’ve closed INR600 crore. The remaining INR600 crore, we’ll certainly find out similar investors, different. The structuring is also going to be similar, as we look at that INR600 crore.
Jayakumar Krishnaswamy
Yeah. Satyadeep, the structuring is more or less going to be the same. Maybe the numbers could be slightly different because it’s not going to be exactly the same set of people who will do. We are more or less at the final stage of discussion. So it has nothing to do with any challenge or anything which you have faced. Just that year-end happened, and then the thing — the market — the people with whom we are working have just come back. So it should happen — I can’t give you a timeline whether it will happen in a week or 10 days or two weeks. But suffice to say that we are on top of it, and this should happen pretty much in the near future.
Satyadeep Jain
Okay. And on this Vadraj asset, just maybe an update on the rail line. I know it had already reached Naliya. What is the status for last-mile connectivity from Naliya to your plant? And then from there also, have you seen other players start basically transporting from that particular stretch, or is it still [Technical Issues] in the future?
Jayakumar Krishnaswamy
That’s kind of more or less stitched up. The railway survey is already completed within Naliya into a place called Vagoth. Vagoth is a station, which is about 4.5 kilometers from our plant. So the survey — railways have started working on that, and I think the land acquisition, railways — that is going to be done by railways. I think their initial project report says that they should be ready completing this up to this Vagoth station by the end of this year. December, January, they should be able to complete.
In parallel, the whole distance for us is there are — obviously, other than that, there are two other plants. I think they’re also kind of pursuing from the same Vagoth, Chowk, and then that’s when the line branches out to us as well as to the other two players.
For us, from that station to our plant, outside our plant boundaries, about 4.5 [Technical Issues] plant boundaries are in our land. So we already started completing the — completed the land survey, the railway route finalization, the DPR, and ESP is all done. Only on last week, Wednesday, I kind of approved purchase orders for the party to work on the railway siding as well. So it all happened parallelly. So our plan is to start work from inside the plant. Already we have control over the land. So the work will start from inside our plant compound all the way to the place where the siding comes inside our plant.
And in parallel, I guess, land acquisition. A lot of patches of land is government land. So we are already working with the government of Gujarat. So by the time work starts, we should have completed the acquisition of the land. And when railways is ready by the end of this year, we should also — we won’t be able to complete the project by the end of this year. It should take longer than that. Our target is June FY28 is when the siding is going to be completed. So we are on top of it, on course to complete stuff. The other two guys, I guess they should also be working on the same lines.
Satyadeep Jain
So as of now the other two guys — their plants are operational. Are they — have they — I just want to understand because the line is there till Naliya. So have other players started shipping? And when you look at the last mile connectivity and assuming some delays, you have been mentioning June ’28, but for at least in monsoon period, it’s a fair-weather port. Should we assume lower utilization for the first year till this last mile connectivity is there? Just maybe an update on are other people using that line as of now —
Jayakumar Krishnaswamy
Yeah, the Naliya siding has already been used by other companies. So I guess the Naliya siding is anyway operational. Though it doesn’t have any handling position, obviously it’s the manual handling loading into BOXN and moving the material so that one is operational. So push comes to so we will start with Naliya, not a problem at all. And by the time June of next year monsoon or late July or something, I guess we should be ready by then. In the unlikely event, Naliya is always there with a little bit of additional cost to move material. Other than that, the jetty is all — jetty road is already there. The jetty road will also be there, and the Naliya route will always be there.
But I think beyond June FY28 we should have the railway setting operating out of the plant, and dispatches should happen within the plant. So as I see today, we are on top of things. Obviously, in a big project like this, there could always be small delays here and there. But I don’t foresee any major stumbling block in this because I guess backup in Naliya is there. Jetty is — we have already done the bathymetric survey, and then we know how to kind of ferry material out of the jetty, cut jetty as well. So jetty route is also going to be operational around the time the clinker starts production. Naliya will be ready when the clinker production starts. Surat would be operational before that. So by the time siding comes by Q1 end, we should be fully in business moving material.
As regards to your second question of whether it meets the scale-up of the company. So as I mentioned before, our overall scale-up is one, two, three, four. That’s the kind of number which we had in mind. 1 million in FY26, which is — we will exit the year at a million kind of — annualized million sale in Gujarat. Next year we should be going into — by end of the year we should get into 2 million sale, and FY28 will be 3 million, and FY29 will be 4 million. So that’s the broad plan which we have. We are on course to achieving and delivering those one, two, three, four agenda.
Satyadeep Jain
Lastly, on Gujarat specifically, because you’re entering — expanding there in a big way. I know you’re catering to that market right now, the 1 million ton that you mentioned through North. But would you have to — as you look at bringing more volumes, when should we look at maybe upscaling your branding team before that capacity comes online? Is there something you need to do to strengthen your position of branding or team there in that region? And when would you start to do it?
Jayakumar Krishnaswamy
I guess it’s all about timing. Because if I start spending money right now, I will be wasting money. If I don’t spend late, I’ll be losing an opportunity. So we have a clear blueprint in place when to kind of get into investment mode in terms of market investment and media investment. But what are the things which we have already done? We have a full-fledged sales force in place. We have the sales offices in place. We have the market study done, and then dealer appointments started happening.
So by the time — even in the month of December we already sold in the state of Gujarat 1.2 lakhs. And our target in Q4 is going to be similar kind of numbers every month. So we have kind of scaled up to this kind of 1.2 lakhs would already mean more than a million ton of sales will happen in the first year itself. So that will not — that sale cannot happen unless and until you appoint dealer network which is already there. But as regards advertisement, marketing, and other spend, so I guess we have a blueprint in place. But in this call I won’t be able to tell when I’m going to break, but certainly on top of things, and by the time our Surat grinding unit is operational, we should be having all this in place in the market.
Satyadeep Jain
Okay. Thank you so much, and wish you all the best.
Jayakumar Krishnaswamy
Thanks.
Operator
Thank you. Next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Jayakumar Krishnaswamy
Hello?
Maneesh Agarwal
Hello, Rajesh.
Jayakumar Krishnaswamy
Am I audible?
Rajesh Ravi
Yeah, hi, sir. Good afternoon — good evening. My question pertains to the fuel and power cost. This INR1.41 when you say per million cal, this is inclusive of your thermal CPP power cost, but this is only kiln fuel cost?
Jayakumar Krishnaswamy
This is kiln fuel cost.
Rajesh Ravi
This is kiln fuel cost. Okay. And what would be your — in the kiln fuel, what would be the linkage and pet coke and other coal mix?
Jayakumar Krishnaswamy
Pet coke on the kiln, as you mentioned, is Q3 FY26, we have delivered 41% pet coke in the — pet coke usage in our kiln. This has got a higher load in North and a lower load in the East, the blended load for the company as whole at 41%. We were — at a similar time last year, Q3 FY25, we were at 48% pet coke. We are at 41% pet coke. Linkage coal is 34%. Non-linkage domestic coal is 15%.
Rajesh Ravi
Okay. And AFR would be the remaining —
Jayakumar Krishnaswamy
AFR, 10% is Q3 FY26. Here we should improve because last one and a half months, we had two main plants, Risda and Nimbol, under shutdown. So both these plants have the AFR facility. So the number is slightly low. Our target — before shutdown of these plants, Nimbol was already at 15% and Chittor was already at 15%. So I guess some ramp-up time will take in the next three months. By Q1 FY27, we should be able to get this number to anywhere between 13% to 15% at a company level.
Rajesh Ravi
Understood. And sir logistics costs this quarter has come down. So is there any reduction in lead distance, or what specifically has led to correction in your logistics cost?
Jayakumar Krishnaswamy
Our lead distance in Q2 was 331. We are at 326 kilometers this quarter. There is a good reduction of 5 kilometers. Most of the reduction has come in the secondary side, and impact is due to the secondary size reduction, where the PTPK is more than the primary PTPK. And that’s one reason why our logistics cost has become efficient in Q3 FY26.
Rajesh Ravi
No, because if I look at from Q1, Q2 level, it is down almost by INR70, INR80 per ton. If I look at the average of H1, it was INR15, INR25 [Phonetic]. Now, it is INR100 lower in Q3. So what explains this?
Jayakumar Krishnaswamy
Three things. One is lead distance, which I mentioned. The second one is all our primary freight has got GPS fitted now. So we are running a very tight system to ensure that any potential leakages in primary is reduced to a big extent. And third most important thing, you would have also — we have mentioned a year ago, two years ago, we started the Sonadih and Jaspur railway siding. And for the Jaspur plant [Technical Issues] by road that’s totally eliminated now. All clinker movement in East is happening only by rake.
So, that’s a big savings in terms of clinker distribution cost has come down, which is we have all the — on time we had mentioned in the previous call that the distribution — clinker distribution cost should — clinker movement cost should come down anywhere between INR25 to INR35 kind of a number. That added to lead distance reduction, GPS implementation, and last but not the least, increased focus in Chhattisgarh sales and Rajasthan sales, has also reduced the overall lead distance, which is a composite — multiple reasons to explain the reduction in distribution cost.
Rajesh Ravi
So how much is the rail share now, which was 40% in Q2?
Jayakumar Krishnaswamy
I can give rail share for the country as whole, just give me a second.
Rajesh Ravi
Yes, yes, total on a total basis.
Jayakumar Krishnaswamy
Our rail share is 37% and road share is 63% 9 months FY ’26. And at Q3 also 63% and 37%.
Rajesh Ravi
Okay, understood. Okay. And sir, lastly, on the power cost, your green power mix is holding up around close to 20%. Okay. What are the opportunity there to increase this? Because most of your peers, they’re all inching up to 40%, 50%. So can you give me a break up of your power usage grade, CPP and you know, renewable power, and what is your thought there?
Jayakumar Krishnaswamy
Currently our CPP is 150 megawatt and WHR is close to about 45 megawatts. Put together, we are at 195 megawatt, 196 megawatt. Our plan is to debottleneck all this WHR to get another 3.5 megawatts in the next six months to eight months. That’s the number one way to increase green power. We also have a very small solar power in Chittor factory, which is a very small one. Along with that, we have a 1 megawatt solar power in Bhiwani and 1 megawatt solar power in Jaspur factory. So these two are the current initiatives.
But in the last one month we have signed an LOI with the company to set up a hybrid power plant in Rajasthan, and that should be operational in the next 12 months to 18 months, which should be a big — which should give us a big boost to power cost in Nimbol plant. And that’s 50 megawatt hybrid model, which we are working, which should be one of the large investments which we are making going forward. It will not be a capex model. It’s going to be a group captive model, which we have concluded very recently, and that work should start very soon.
Rajesh Ravi
So 50 megawatt will be the installed capacity. And it is solar, right?
Jayakumar Krishnaswamy
It is a hybrid, solar plus wind.
Rajesh Ravi
Okay. No, I just want to — while my question is the — most people are doing this re-power through JV mode to reduce their landed power cost. So what sort of power cost reduction, and given that many companies, if you see your — few competitors have recently invested INR45 crores with a payback period of — what we understand, these heavy projects have a payback period of less than two years. So is this not an opportunity for you to invest into — invest say INR100 odd crore through JV models and increase your green mix from 20% to 40% plus and in turn also reduce your blended power cost by say INR1 odd.
Jayakumar Krishnaswamy
Very much. I think, Rajesh, it’s very clear. If you really look at where all we operate, we operate in Rajasthan, that’s a big cluster for us; Chhattisgarh is the second biggest power-consuming place; and the third one is West Bengal, where we have two GUs. So our highest power cost for the company comes from Rajasthan both because of pet coke cost as well as the overall power cost in the place is high. And the rules of Rajasthan got changed only recently. As soon as the group captive and the banking model came into economically right stream, we have gone ahead with this group captive model of putting up a plant exclusively for Nimbol. What we do in the second plant is based on our experience of Nimbol. That’s the first thing.
When it comes to Chhattisgarh, the first thing which is important for us is we run on a — what you call linkage coal, which is a big component in Chhattisgarh. And the second one also is all the three plants [Technical Issues] integration in Chittor — not Chittor, sorry, Risda, Arasmeta [Technical Issues]. So, what we learn is all these three plants run on a grid. And we — many times, we shut the CPP to use the grid, or we shut the grid and use power from one factory to another factory. It’s a common way, and we’ve got a solid benefit out of it. The payback was close to only seven, eight months and more or less the job is done.
We will go for a captive plant in Chhattisgarh. Once the economics of captive plant outweighs the savings which you are making out of our current model. So it’s very much in our agenda. It is economic which will drive at this point in time. Lastly, it is Bengal. Bengal, still the group captive model is not working because the rules of that place does not facilitate what we have in Rajasthan. We don’t have proper banking arrangements there. So once that happens, that’s the place where we’ll go for.
Rajesh Ravi
Understood, understood. Sir, what is your blended power cost currently, six months — nine months and Q3?
Jayakumar Krishnaswamy
Blended power cost for the company is — just a second, please. The blended power cost for the company is close to about INR335 per ton.
Rajesh Ravi
INR325?
Maneesh Agarwal
INR335.
Rajesh Ravi
Okay. Understood, sir. That’s helpful. Thank you, sir. All the best.
Jayakumar Krishnaswamy
Thank you so much.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Prateek Kumar from Jefferies. Please go ahead.
Prateek Kumar
Yeah, good evening. Congrats for great results. I have a couple of questions. Firstly, on your premiumization mix and increasing rate over the last few years. How do you think your gap has closed versus — gap has closed or increased versus other best brands in the market? And how does increasing premium mix contributes to your EBITDA per ton?
Jayakumar Krishnaswamy
Just I’ve got some — we’ve got some bragging rights on this. So certainly from FY22 till FY26, nine months, our premiumization percentage of trade volumes have moved from 34% to 36% to 37% to 40% to 43%, and Q3 we had 44% of premiumization. We have Concreto, which is a flagship premium brand. We also successfully launched Concreto Uno in Bihar, Bengal, and Jharkhand. And the Duraguard Microfiber is sold in Chhattisgarh, Orissa, Rajasthan, Western MP, Haryana, other north markets and also in Gujarat.
So that’s something which — and if we then look at rest of the other companies, I’m not going to rattle out other companies. I think they are at a different level; we are at a different level. Certainly going forward this will be a source of strength for us. We will further strengthen in FY27 and beyond, certainly to increase this number. We are really looking at increasing the number, certainly at 200 basis points every year in the next two years to three years.
Prateek Kumar
Sorry, my question was regarding how your net realizations or market pricing would have increased or gap on a better side versus your competition during this period and contribution of better premiumization on EBITDA per ton.
Maneesh Agarwal
At the premiumization level — we have to — we can’t look at an all-India level because premiumization has to be calculated — the base product in the state and the premium in the state. Contribution changes from state to state. Suffice to say that at the premiumization level we can get anywhere between INR150 to INR200 increased contribution per ton of cement sold. So that’s a big boost. And as we go forward, this will provide us leverage to overall improve the realization for the company.
Prateek Kumar
Okay. And my other question is on your 4Q. So we have seen acceleration in demand growth for your company. Based on current trends because we had a very high performance base in Q4 last year. We look volume growth accelerating from 7% this quarter. And also a related question on pricing, how is your pricing undertaken on 10, 12 January compared to the exit price of December quarter?
Jayakumar Krishnaswamy
Yeah, I guess the first one is in terms of Q4, obviously our base was high last year. We sold 5.7 million tons in Q4. So I’m really looking at good growth. If you remember my previous call in Q3, I mentioned that demand for the industry should be anywhere between 7% to 8%, kind of a number. So we hope to kind of hit that number or cross that number certainly going forward. That’s on the demand side, basic side. But I guess Q4 overall, the cement industry also peaks, and then we will certainly ride the demand perking up.
Second, in terms of the price increase and the impact of price increase, as I said as an answer to the first question, pricing corrections we took on 10th, 11th of January. So non-debt prices have moved most markets. Trade prices also have moved in certain markets. I’ll have to wait for the next week or 10 days to see whether these prices continue to remain where it is there. I see no reason why prices coming down from where we have taken them because these prices have to sustain going forward and also in a quarter where demand is going to be pretty robust.
Prateek Kumar
Thank you, sir. And all the best.
Jayakumar Krishnaswamy
Thank you.
Operator
Thank you. We’ll take our next question from the line of Tejas Pradhan from Citi. Please go ahead.
Tejas Pradhan
Yeah. Hi, sir. So you had mentioned that you will be expecting 7% to 8% demand growth in fourth quarter. Now, from fourth quarter last year, if I’m not wrong, we operated at 90% plus capacity utilization, and I assume there’ll be a regional skew over there. So how are we placed in terms of having capacity available both from grinding and clinker capacity perspective to sort of meet this demand growth that could be there?
Jayakumar Krishnaswamy
Yeah, we have to divide our market between East and North/West. Certainly, in the North markets sourced from Chittor, Nimbol, Bhiwani. We would be operating at near capacity utilization in Q4. That’s very clear. The only way we can get more volumes is to go more and more into blended cement, even in non-trade category, and that’s our goal in Q4 to kind of get our year’s 6 million tons of capacity in North. We will set our assets to come very close to that number.
However, in the East, we still have a lot of headroom. Our installed capacity needs is close to — clinker capacity, not installed capacity. Clinker capacity is close to about 20 million tons at CK ratio of 2.1. So one of the goals here again is taper down the OPC levels at non-trade and go hammer and tongs on trade levels. We have sufficient headroom in these to kind of get the growth this year. Even next year, a double-digit growth, and the year after also a double-digit growth.
So certainly, suffice to say, for the next two-and-a-half years, we have adequate capacity needs to kind of stretch the assets and get the volume growth going. The other one, which we will certainly work on, is get into more and more blended cement, get into more and more slag cement. Also, quantitative owners of composite cement, it’s a premium composite. So we’ll more and more switch over from the plain PPC or plain PSC into composite to do clinker release. So clinker release will be the agenda moving from OPC to blended cement. Whatever little we do in the second agenda, sufficient headroom to grow, certainly in Q4 and beyond FY27 and ’28 also we have adequate capacity in the east.
North will be a tight scenario. After this quarter, we’ll continue to operate at near capacity utilization in North. And that’s one of the reasons Vadraj will come into play. Once Vadraj capacity comes into play, we release close to about the current 1 million ton sale in Gujarat into North markets. And certainly get Vadraj to serve Gujarat as well as West Maharashtra, or also some bordering portion of West MP, also will happen from the Surat factory. So all in all, the entire Vadraj expansion strategy is to release capacity in the North. And East, we are self-contained for the next two years to three years.
Tejas Pradhan
Okay, sir. Just to add on to that, so if I look at the presentation, the cement-to-clinker ratio for nine months is mentioned at 1.72x at the company level. Could you break this down into East and North? What would be the CK ratio in those region separately because —
Jayakumar Krishnaswamy
Yeah. East will be close to about 1.95 to 2, North will be about 1.3 to 1.35. So, we’ll have to further improve North from — move away from OPC to PPC. I guess that’s going to be the focus in the coming two quarters to release cement. And because there’s growth in the market. We’ll have to move away from non-trade into trade and move from OPC to PPC. We hardly sell any OPC in trade. So whatever little non-trade OPC, we’ll move from — based on contribution, of course, into PPC. East certainly at 2. We still have headroom to go to 2.1 in certain markets. We have done 2.1 in the past as well. We should go to 2.1 very soon so that there again I think we will curtail the OPC sales in non-trade and go out and out into PPC or move from PSC into composite cement.
Tejas Pradhan
Okay. And in the interim, do we have any scope for any debottlenecking, or we have already sort of exhausted the likely sort of limit?
Jayakumar Krishnaswamy
As we speak right now, I don’t — we don’t have any debottlenecking plan in East. However, the cement capacity increase of 4 million tons grinding will help us more grinding capacity closer to the market to get this capacity going in the market. And also the Chhattisgarh GST benefit will help us garner a little bit more money by the debottlenecking in Arasmeta. The entire composite cement agenda, blended cement agenda for the company, is the reason for doing the expansion of grinding units in East. Most —
Tejas Pradhan
I was checking from a clinker perspective.
Jayakumar Krishnaswamy
I’m talking about that. Yeah, I’m coming to that.
Tejas Pradhan
Okay. Okay.
Jayakumar Krishnaswamy
Hold for a second, I’m coming to that. East, we have debottlenecked our installed clinker capacity is close to 9.5 million tons. So we can always get the squeezing done to the point where, at this point of time, I’m not focused too much on increasing clinker capacity from 9.5 million tons beyond simply because I have headroom. Even in 9.5 million tons at a 2.1 CK ratio, I can go more than 20 million tons at East. And I have adequate cement at 2 million, 10% growth for next three years, I have adequate cement capacity unlocked for East.
Maybe same time next year we can think about debottlenecking. We don’t have plans to put a full-fledged clinker line in East at this point of time. But maybe I think as the year progresses and we come into next year, we can look at that. In North, debottlenecking certainly we will do. We already debottlenecked Nimbol from 4,500 to 6,100. That’s a big debottlenecking exercise we did. Chittor factory used to be 5,000; it went to 6,100. But right now I don’t have any plans to increase the clinker capacity in North from 6,250 to 12,500 [Phonetic]. Vadraj will be the one which will come and help my clinker capacity in the North.
Tejas Pradhan
Sure. Thanks. Just one last question from my side. What would be the cost of borrowing for the company as of now?
Jayakumar Krishnaswamy
Just a second.
Maneesh Agarwal
So it is currently in the range of around 8%.
Tejas Pradhan
8%. Okay. Thanks a lot. That’s it from us.
Jayakumar Krishnaswamy
Thanks.
Operator
Thank you. [Operator Instructions] Next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi. Thank you, sir. Sir, just to summarize, so at a blended level and given the 3 million ton capacity that will come off, particularly this East one, so 1 million ton I hope, will be coming by March, Jojobera and Jaspur. Jojobera and Panagarh will be coming by this March, and maybe 1 million ton Jaspur by 1Q FY27. And plus 2 million ton Surat also will be coming up and will be available for the second quarter of FY27. So at a broader level, this fourth quarter at least we should be doing 7%, 8% growth, and for the next two to three years, as you are highlighting, at a blended level, closer to our double-digit growth is doable?
Jayakumar Krishnaswamy
Absolutely. I guess, say, you summarized everything what I wanted to tell. Certainly, in Q4, our target should be what you mentioned, and next year and beyond, we are targeting a CAGR of 10% volume growth at least for the next two years if not more. Surat will give us — Gujarat will give us a benefit in the East — in North. And East with the Jojobera debottlenecking, more or less it is going to be ready. I guess, in the next two months, we should have Jojobera expansion completed.
Jaspur expansion, Panagarh expansion work have started. We have the — there is something called NIU approval, so we are working with the governments for getting the no-load increase approval which is happening currently and side by side the modifications are happening in this plant. Arasmeta debottlenecking is a little bit longer because it involves putting up a totally new mill. That should be available in FY28. FY27, certainly Jojobera expansion will be completed early part of FY27, and even Panagarh and Jaspur, I guess we should be ready by max Q2, but certainly end of Q1.
Shravan Shah
Okay. Okay, got it. Second, sir, to summarize in terms of the cost including the — even the startup cost of Vadraj from here on in terms of the — at the company level in terms of the cost saving how one can look at?
Jayakumar Krishnaswamy
This is our annual operating plan time. I guess when we meet in 4Q numbers, I’ll be able to share the next two to three years’ cost-saving agenda for the company. We are on the — we are currently working. So next time when we meet, I will be able to share with you the next two to three years’ cost-saving agenda for the company.
Shravan Shah
Okay. And sir, on capex, you have mentioned for the fourth quarter for FY27 and ’28 if you can because I think that our capex was slightly getting postponed to FY27. So for FY27, ’28, if you can spell the capex number?
Jayakumar Krishnaswamy
Yeah. FY27, I’m looking at the overall capex of close to about INR1,000 crores, and FY28, close to INR700 crores. 2026 will be INR650 crores — INR650 to — INR650 crores is what I mentioned, INR620 crores to INR670 crores. Let’s take INR650 crores as FY26. FY27 should be anywhere between INR1,000 to INR1,050 crores. And FY27 will be anywhere between INR650 crores to INR700 crores. This will have Vadraj capex, which will come — we already spent close to about INR200 crores in Vadraj by December. We should have another INR300 crores — INR250 crores, which will happen in the next two months to three months. Then on next year about INR800 crores and the year next another INR500 crores from Vadraj. Rest will be routine capex. So overall summing up FY26 our capex will be INR620 crores to INR670 crores, give or take INR50 crores here and there. FY27 will be INR1,000 crores to INR1,100 crores [Phonetic]. FY28 will be INR650 crores to INR700 crores.
Operator
Mr. Shravan, I’m sorry to interrupt. I request you to join back the queue. To interrupt. I request you to join back.
Shravan Shah
I’m just completing that. So does that mean [Speech Overlap] yeah, so does that mean that we are not factoring any kind of a capex for Chittorgarh expansion? So that should be happening in the FY28 at least. So —
Jayakumar Krishnaswamy
At this point of time, it’s too early for me to say when we will start. Either we’ll start in FY28 or FY29. It could be give or take one year here and there. But I think let’s get into FY27. H2 of FY27, we will give you clarity on when do we start. Because we’ve got still — like Bishnu mentioned in his opening remark, we have options with Gulbarga, we have options with Chittorgarh. We have the Nimbahera mine. We also have the JMK mine in Jodhpur and also have the Gulbarga mine. So we will decide closer to the date where we will expand, either a greenfield expansion or a brownfield expansion. FY28 onwards it will start, but it’s too early for me to say when I’m going to put money to H2 of FY28 or Q1 of FY29.
Shravan Shah
Okay. Okay. Got it, sir. Thank you.
Operator
Thank you. We’ll take our next question from the line of Navin Sahadeo from ICICI Securities. Please go ahead.
Navin Sahadeo
Yeah, good evening, and thank you for the opportunity. Hello. Am I audible?
Jayakumar Krishnaswamy
Yeah.
Operator
Yes, please go ahead.
Navin Sahadeo
Oh, great. Yeah, great. Thank you. So, two questions. One was on the industry-wide pricings. As you said, you’ve taken some price hikes in January. Now — and you also mentioned that December as a month, not just — I mean, it witnessed a double-digit kind of a growth, and I think our channel checks are also indicating both North and East witnessed a very decent, or may I say, very bumper sort of rebound volumes in the month of December. Typically January volumes are at par to what they are in December. So my question was that if December as a month, which witnessed such a sharp recovery, could not give any prices, rather prices continued to reel under pressure, what gives the confidence that January would see some better pricing, please?
Jayakumar Krishnaswamy
Volume certainly from the first 14 days of the month, I guess we are tracking decent volumes. I am sure industry also — demand for cement in general is pretty good in the market as January has started. So I’m not going to qualify any — put any adjective to the past month. But certainly I think December was a good month for us and maybe for industry once their results are published. But certainly in January, I see a demand sustained from — sustaining from December 20 level — December 20th to 30th levels. And that’s the reason why we have gone ahead and made these changes in pricing.
So as I said earlier, this is just only what one week into price increase time. So I will wait and watch going forward whether we are able to sustain these prices. So my gut sense is the prices had fallen below to GST levels because we had passed on all the benefits of GST, and we continued with the quarter, but with a little bit of cost inflation, we had to do some adjustment, and that’s how we took this correction. Non-trade prices had gone quite below trade prices, and that’s the reason why we took the correction in non-trade first.
Navin Sahadeo
Understood. Helpful. Second, a slightly long-term or a mid-term question. This is in with respect to the capex plans that you have mentioned. So historically you always mentioned that whenever the net debt of the company comes to — in the range of INR3,500 crores to INR4,000 crores, you will pursue the next capex, which you are doing in the form of Vadraj. So now, since the last two quarters, you have been mentioning medium-term growth plans of Chittorgarh plant and greenfield optionality for Gulbarga. So is there any thought process as to when, at what levels of debt will the company then again — net debt or the net debt to EBITDA, will the company look to pursue these capex?
Jayakumar Krishnaswamy
I still continue to say that we will pursue our growth at this kind of numbers in future as well. But with this kind of capex spend in the last year with Vadraj acquisition and going forward in the next two years, certainly we need to have the next set of expansion, moment we complete Vadraj. But the current focus is going to be getting Vadraj right. So, we are a company which grows one at a time company. So that’s how we will progress on this.
When we reach FY28, I guess, as I answered the previous question, sometime in FY28, either H2 or Q1 FY29, is when we will start the next phase of expansion. But as I build the business plan for the company from current year for the next two to three years, we should be in a pretty favorable position at similar kind of debt levels two years from now for us to kickstart the next expansion.
Navin Sahadeo
Noted. One question if I can squeeze in. Sorry. So very quickly your freight cost tends to be very volatile. I mean, it’s heartening to see a decline, but then it also tends to bounce back. For example, in Q4 of ’25, it has fallen on a percent which is as low as 1,401. But suddenly in Q1, we saw a jump to 1,550. So I’m just trying to understand it’s good to see the current quarter’s outstanding like reduction in the freight. But how sustainable is this is now the limited question. Thank you.
Jayakumar Krishnaswamy
To keep the freight cost under control, I think there are two, three levers which we have done. Certainly, I think the railway siding in Sonadih and Jaspur has been instrumental in reducing the clinker movement rate, which is important. The second one is the starting of Bhiwani factory. The lead distance of Haryana cement plant has got positively impacted.
As regards to your question about erratic behavior of a trade cost, I would say that certainly from FY25 Q2 onwards till as we speak, I think gradually we are chipping away the freight cost mainly due to three reasons. One is focusing on home markets and reducing the lead distance. Second one is what do you call the railway siding in Sonadih as well as Jaspur.
But one of the principal reasons is we are a company which is on 37% rail share and 63% road share. As you would have seen post-COVID, for the next two years, the government did not levy the — what we call freight subsidy for lean season. They delivered freight subsidy for lean season, and suddenly they went back again two years or year and a half last year I guess. This FY26 and FY25, the freight subsidy got cancelled. Hence, the freight cost increased because we have a certain big amount of rail share, and the overall freight cost increased due to subsidy going away.
From now on — from last year, which is FY25 to FY26, I guess it’s a steady state period. You will see us progressing continuously on sustained reduction in freight cost mainly through home market sales, increased home market sales, reducing leakages through GPS, getting the clinker distribution cost between Jaspur and Sonadih. And last but not the least, one of the things which also came as what do you call a fluctuation for two, three — for two quarters was also in certain markets we moved from H2 to H1 [Phonetic], but then I think the entire industry works on a particular practice. And then we had to change the model. And that’s the reason where you would have seen some spikes on the freight cost.
All that is behind us now. We now have a steady-state market with sustained railway with all the costs, which are built going forward contains the — what do you call, lean season discount not happening during the period. Number two being Sonadih, Jaspur siding, is completed. Number three being increased focus on home markets in Rajasthan, Chhattisgarh where the distribution cost should come — Haryana, distribution cost should come down. So suffice to say, as we go forward, we should be able to have efficiency improvement in logistics costs to get the maximum savings in the coming quarters.
Operator
Thank you. Ladies and gentlemen, we’ll take that as the last question for today. I now hand the conference over to Mr. Bishnu Sharma for closing comments. Over to you, sir.
Bishnu Sharma
Thank you for all your thoughtful and insightful questions. We hope your questions have been addressed. The investor relations team is ready to provide any additional clarifications you might need for the call.
Before we wrap up today’s call, let me affirm our resolute commitment to driving sustained growth and strengthening our market position. Vadraj cement plant project’s execution remains on track with phased commissioning targeted from Q3 FY27 to strengthen our Western region presence. Our Eastern expansion fueled by strong demand for blended cement under Concreto and Duraguard will further enhance our leadership position in the region.
Looking ahead, we will continue to drive premiumization, an area where we have consistently expanded our base and set new benchmarks while maintaining our focus on geographical optimization and cost discipline to enhance profitability and create sustained shareholder value. Thank you for being with us today. Thank you.
Operator
[Operator Closing Remarks]