Nuvoco Vistas Corporation Ltd (NSE: NUVOCO) Q4 2025 Earnings Call dated May. 02, 2025
Corporate Participants:
Unidentified Speaker
Madhumita Basu — Chief Strategy and Marketing Officer
Jayakumar Krishnaswamy — Managing Director
Analysts:
Unidentified Participant
Naveen Sahadev — Analyst
Pratik Kumar — Analyst
Satyadeep Jain — Analyst
Tejas Pradhan — Analyst
Parag Thakur — Analyst
Rajesh Ravi — Analyst
Shravan Shah — Analyst
Jyoti Gupta — Analyst
Sanjay Nandi — Analyst
Satyadeep Jain — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Q4FY25 earnings conference call of Novoco Vistas Corporation Limited. We must remind you that the discussion on today’s call may include certain forward looking statements and must be therefore viewed in conjunction with the risk that the Company faces. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statement on the basis of any subsequent development, information or events or otherwise. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Manumita Basu, Chief Investor Relationship. Thank you. And over to you.
Madhumita Basu — Chief Strategy and Marketing Officer
Thank you, Yasushree. Good afternoon everyone and thank you for joining our fourth quarter and fiscal 2025 conference call. Let me start by briefly discussing the broader macroeconomic landscape linked to cement demand, followed by a review of our performance and key events for the quarter. As we all know, the global economic landscape is shifting rapidly with recent trade tariffs amplifying uncertainties. Nevertheless, India has demonstrated notable resilience underpinned by robust economic growth. A solid macroeconomic framework moderating inflation and strong domestic demand drivers. After a muted first half, economic activity picked up in the second half driven by rise in government capital expenditure.
Real GDP growth accelerated to 6.2% y o y by Q3FY25 up from 5.6% in the previous quarter reflecting a robust economic recovery supported by stronger rural demand from good croppies. The forecast of above normal monsoons further strengthens crop prospects for the upcoming curry season. These developments collectively point to a favorable outlook for cement sector. Now I would like to provide you with key updates on Uvoho’s business this year. We have taken a fresh look at our mission statement as we embark on a growth phase. Our new mission of trusted building materials company creating value for our stakeholders embodies our commitment to operational excellence and enhancing value for our stakeholders.
Coming to a state of update on our acquisition of Bhadrar Cement Ltd. We have received approval from the NCLT for our Resolution Plan marking a key milestone in our growth strategy. This acquisition will enable us to reach a total cement capacity of 31 million tonnes per annum by the third quarter of FY27, further strengthening our position in the industry. Additionally, we are planning to set up a GU at Kutch as we remain very optimistic on the Kutch corporations considering Gujarat government is actively focusing on developing this region. Furthermore, the state government has favorable incentive programs in place to encourage the establishment of cement operations in Kutch, making it an attractive destination for investors to reiterate.
Overall, the Madras Cement transaction is a strategic value buy and will be funded without a significant increase in our consolidated debt levels. By adding Madras Cement assets, we are well positioned to expand and consolidate our presence in the western region. This acquisition will also allow us to further consolidate our presence in the Northern region as the release of additional capacity from Chittorgarh plant enables us to better serve that market. With this acquisition, we will become the third largest cement producer by capacity in the combined Gujarat and Maharashtra markets while also diversifying our operations and further strengthening our competitive position in these key regions.
Let’s now review our quarterly performance, evaluate the progress we have made and discuss the outlook for the coming periods. In Q4FY25, the company recorded its highest ever quarterly consolidated cement sales, volumes increasing by 8% year on year to 5.7 million metric tons with full year sales reaching 19.4 million metric tons. While demand was subdued in the first half of FY25, the second half witnessed a strong recovery. The company acted swiftly to capitalize on emerging opportunities, strengthening its market presence and driving robust volume growth. Consolidated revenue from corporations grew 4% YoY to rupees 3042 crore in Q4FY25 bringing full year revenue to rupees 10,357 crores supported by back to back quarters of improving demand in H2 FY25.
The price environment remains supportive. The price hikes introduced towards the end of 2024 were maintained through Q4FY25. The company continued to work on premiumization agenda with premiumization reaching 40% during the year. Additionally, the company maintained a sharp focus on operational excellence. This is reflected in achieving the lowest blended fuel cost in the last 14/4 and rupees 1.43 per MCAL, reinforcing Nuvoco’s position amongst the industry’s lowest in RM fuel costs on cost efficiency program, Project Bridge 2 delivered a saving of rupees 56 per metric ton in FY25. Turning to our balance sheet, we have continued to make progress on our deleveraging agenda during the year, reducing net debt by rupees 390 crore year on year to rupees 3640 crore.
Despite the challenging operating environment over the past few years we have consistently focused on lowering debt, bringing net debt down from rupees 6730 crore in FY21 to rupees 3640 crore in FY25. We are committed that once Nubopo’s debt level reaches the range of 3,500 to 4,000 crore we would initiate growth capex. With our debt now within the targeted range, the strengthened financial position places us well to initiate the next phase of growth and commence operations at Bhadrad cement plant by Q3FY27. To quote Mark Twain here, the secret of getting ahead is getting started. We are now ready to embark on a significant journey to diversify our geographical footprint.
Turning now to the cement demand scenario, as you are aware, FY25 was a mixed period for the industry. The first stock of the year experienced a subdued macroeconomic environment through primarily due to prolonged elections, slowing down government capital expenditure and later challenging weather conditions. However, demand rebounded strongly in the second half of FY25 during H2 cement demand showed sustained growth over two consecutive quarters driven by increased capex from both the central and state governments which supported infrastructure and housing projects. Correspondingly, Pan India cement prices began to improve from Q3FY25 onwards. Most of the price increases implemented towards the end of Q3FY25 largely sustained through Q4FY25, capital expenditure by both state and central governments has started gaining momentum.
For FY26 the central government has increased its capex by 10% y o y to Rs.11,000 crore while state governments have planned an average 17% rise to roughly rupees 10 lakh crore providing a significant boost to infrastructure and housing initiatives. Specifically, the central government’s allocation for The Qatar monthly AHAS Yoshra is set to increase by 64% and major states such as West Bengal, Bihar, Chhattisgarh, Gujarat, Rajasthan and Sharphand have collectively earmarked approximately Rs. 35,000 crore for various housing projects. Given the planned capex from both Central and state governments, cement demand is expected to remain robust in FY26.
Looking ahead, sustained demand growth is also likely to support healthy price levels. On marketing initiatives, our premium products continue to be the preferred choice for customers. Concreto Uno and Duraguard Microfiber, our flagship premium products have shown encouraging growth. We are pleased to share that our Haryana Cement which is helping us expand its availability and reach across the northern market. With improving market conditions, our trade share has gone up to 75% in our mix in Q4FY25 71% in the previous quarter. Alongside this we remain active with on Ground engagement programs that resonate strongly with our channel partners and end consumers.
The subsequent initiative in Haryana strengthened the product’s positioning around durability and strength while the Combha Mela gave us an important platform to create an enhanced experience for our channel partners and influencers. Turn now to the Ready Mix and MVM businesses. With respect to Ready mix, we added two plants in Rachi and Nagpur in Q4 and remain committed to driving growth and enhancing market presence across India. The MDM segment provides an opportunity to strengthen our cement channels and garner wallet share of our end users. The company is committed to delivering high quality differentiated products that drive growth and create long term value.
Strategic outlook for FY26 as we look ahead, our strategic focus remains on driving growth and operational excellence across all three business verticals. Firstly, in the cement business, our priorities will be refreshing our go to market strategy to align with our expanding footprint with a clear ambition to drive market share, achieve market leadership in our home markets while expanding our presence in the western region. Continue to drive premiumization agenda for value growth Deploy efficiency programs to optimize manufacturing procurement and logistics cost in the Ready Mix business, we plan to expand our manufacturing footprint to support volume growth.
Alongside this, we will continue to deploy operational efficiency programs to enhance cost competitiveness for MDM business. Our focus is on accelerating business growth by leveraging the strength of our existing cement distribution network. This will allow us to tap into additional market opportunities. Here too, efficiency improvement programs will be deployed to deliver cost savings. Together these strategic priorities are designed to enhance our market position. We will continue to build competitive advantage through customer centric culture to delight stakeholders for sustainability. We remain committed to our sustainability focus. With this I conclude my opening remarks. I am joined here by Mr.
Jay Kumar Krishnaswamy, Managing Director of NUMA Covista and Mr. Manish Pagarwal, our Chief Financial Officer. We will be happy to answer any questions that you may have. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchdown telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take our first question from the line of Naveen Sahadev from ICICI Securities. Please go ahead.9
Naveen Sahadev
Yeah. Good evening and thank you for the opportunity. Am I audible?
Madhumita Basu
Yes, Abhinav.
Naveen Sahadev
Right. So congratulations on good set of numbers. A couple of queries but let Me start by congratulating your sales team first for the wonderful realization increase and also increasing the trade share from 71 to 75% so indeed a great job. My first question was in your opening comments Madam you mentioned that the or the acquisition of Madras will be pursued without any further increase in net debt. So if you could just help us understand or just take us through how do we really plan to do that? Of course net debt has come down to 3640 but I think there is an upfront payment to be made of 1800 crore to the NCLD or to the bankers itself and then I think it was guided that 1100 to 1200 crore is what wired over two years.
So I’m assuming that 1200 crore partly at least 500 crore will come this year and the balance next year so upfront payment is almost 2,300 crore. Some maintenance capex. So just want to understand how do you see this without increasing the.
Jayakumar Krishnaswamy
Yeah thank you for this question. Last three years ever since our listing and then our investor call started way back in 2021 one of the things which we have clearly mentioned is we are for the size of the company and the size of the business we have. We are comfortable operating with a net debt around 2,500 to 4,000 crores and our pursuit in the last few years have been to tear down the debt from where we were three years ago till now and this quarter we reached 3640 and you would have seen every quarter to quarter comparison and right year to year comparison every quarter we have debt levels of the company has been lower than the previous quarter.
So we reached the stage and in the last call I had mentioned that we had successfully bid for Vadraj and then we are waiting for the NCLD process to happen and this quarter obviously the NCLT process happened and now the ruling is in our favor and then we should proceed on getting the investment going. We certainly earn the right to invest meeting the commitments which you have made consistently by reducing the debt of the organization. Now comes to how do we kind of find a way to fund this acquisition as well as the rebuild of the facility.
In the last call we had mentioned that the cost of acquisition is around 1800 crores and our current estimate at that time was to rebuild the Surat and the Kutch facility will be to the tune of about 1200 crores. That was the messaging which I had done in the last quarter. As we come to the consummation of the transaction here is what we plan to do we would find a way to fund this transaction to keep the debt levels of NO CO at a reasonable level. What do you mean by reasonable level? Out of these 800 crores of financing which we need to do up front we will take a long term debt of 600 crores in Noco’s books and then the balance 1200 crores will be through instruments like CCDS and CCPS which will be on a long term maturity.
Interest cost of this will be at the tag end, at the end of the period so that the balance sheet of Novoco doesn’t get loaded. So NOCO will pick up a debt of close to 600 crores in short term. And till the financing happens we will also take a bridge loan of about 1200 crores for a max max period of 6 months but much before 6 months before we complete the payment for the transaction. So in short 600 crores will be on the books of NOKO in the form of long term debt. And the balance 1200 crores will be through CCPS and CCD which will be long term and not figure in the debt level of no co.
That’s the first bet in terms of paying that 1800 crore. The second thing is about the investment of about 1200 crores. I just want to inform all of you in this meeting that subsequent to the last investor call and now some important positive welcome development happened which Meeta mentioned in her speech. We’ve also identified there are fiscal opportunities available in the state of Gujarat for expanding in Kutch. And we have decided to set up a landing unit in Kutch facility for 2 million tons. Hence the overall capex needed to rebuild Kutch facility, Surat facility and also put up a GU in Kutch will now be turned up from the original number of crores.
So about 1500 crores. But the timeline to do all these things will be in three calendar years of FY of 20, 25, 2026 and 2 027. And the phasing of the investments would be in the tune of about 600, 600 and 300 in the next three years 24 to 30 months. And along with that to fund this capex from internal accruals we will pare down our capital expenditure to run the current operations to a max of 100 to 150 crores so that we have adequate cash flow in the organization to fund the capex of. So that’s the sum and substance of how the 1800 crore funding will happen.
And also the 1500 crores which was 1200 plus the current change into 300 of setting up the grinding unit in Kutch. Plus also expand refurbishing kutch and storage facility. Hope that’s clear to you. If you have any further queries you can ask.
Naveen Sahadev
Yeah, sure. So just off this a bit. When you say CCPS and I’m assuming you’re talking about compulsory convertible preference, is it the promoters who will be looking to subscribe this, are they putting in more money or. We are looking at an external combination of both. How should one look at it?
Jayakumar Krishnaswamy
We will have investors who will invest into Vadraj in the form of CCPS and CCD and at an opportune time with a long term maturity. And when the maturity happens then we kind of repay the CPPs and CCBs the maturity time.
Naveen Sahadev
Understood. And just one last question from me. Are we building in the acquisition or the. I think that there’s a power plant which is in control of gsw. It’s not part of the deal but it’s in the vicinity and we need it for operations. Are we. Are we accounting for back acquisition cost as well?
Jayakumar Krishnaswamy
Currently we are in discussions for the cbp. The deal is not concluded but as and when it is done we will have to. We will find a way to incorporate in the refurbishment cost.
Naveen Sahadev
That’s helpful. Thank you so much. I’ll come back in queue for more queries.
Madhumita Basu
Thanks again.
operator
We’ll take our next question from the line of Prateek Kumar from Jefferies. Please go ahead.
Pratik Kumar
Yeah. Hi sir. And congratulations. My first question is on your cost savings. So you have been like sort of rolled out cost saving programs. If you can quantify how much of on a per term basis was achieved in FY25 at the company. And how are you looking at in terms of FY 2627 in terms of any more incrementally initiated there.
Jayakumar Krishnaswamy
Okay. Meeta mentioned in his speech that program Bridge delivered close to about 56 rupees per tonne that has come through three routes. One is raw material costs reduced by close to about five to eight rupees on a full year basis. The power and fuel cost from FY24 to 25 reduced by 30 to 33 rupees. And then the distribution cost which is including of SFG. Okay, I’m sorry, it reduced by 130 rupees. So I just missed a number there about raw material cost about 5 to 7 rupees. Power and fuel cost close to about 130 rupees.
Distribution cost reduced, including the semi finished income movement reduced by close to about 100 odd rupees. So all this came through cost savings which were planned through the railway siding in Sonadi, railway siding in Tajpur which is more or less complete but will be completed in the quarter. Setting up of alternate fuel systems in Nimble and Chittor which brought this fuel cost down. And also ramp up of the AFR facility in Drift up namely three buckets raw material cost reduction. Second one is power cost savings and third one is paring down of distribution cost overall when compared to FY24 to 25.
We had these savings and Project Bridge is one part of the overall cost saving. And the project bridge delivered close to 56 rupees per tonne. And the second part of your question was what is the future targets for us? I think we are targeting this with the implementation of full ramp up of Sonati railway siding, full ramp up of Jaspur siding and also other productivity improvement programs. In terms of getting the full benefit of AFR in these sites we are targeting close to about 100 to 150 rupees per tonne in the next two to three years.
Pratik Kumar
Sure. Just a clarification for 25 over 24 you said 8 rupees from RN 130 from PNF and 100. So total like 240 rupees kind of savings they get, right? 240% savings from
Jayakumar Krishnaswamy
more than 200 rupees. But overall if you remember rightly year ago we defined what all items came in the form of bridge agenda. So in a speech Meeta clearly mentioned the bridge agenda which we announced delivered close to 56. But on top of that programs which are not part of the bridge which is namely ramping up of AFR and also getting the allied slack and other projects in raw material delivers the balance savings. The bridge agenda typically had new batch sourcing model. It had bridge integration program out of Chhatturgarh. It had efficiency improvement in variable cost and also it had a component of so percentage increase in sales.
All this was part of the bridge agenda. We delivered 56 rupees out of the bridge agenda this year. Over and over the bridge agenda there was a fuel cost saving which came through rate variance as well as through AFR improvement and also announced some finished groups movement through the railway setting.
Pratik Kumar
Right here. Another question is on pricing. So like exit of March quarter so like some price hikes and then April some more price hikes. So how is Q1 trending over average of last quarter?
Jayakumar Krishnaswamy
Just to drop the memory that when we did the earnings call in January. I had mentioned that we ended the quarter with a 6% increase in realization. Happy to report that the kind of realization we ended Q3 almost continued throughout the quarter with some changes. But we had mentioned at that time itself that we will see the benefit of price corrections which we made in Q4 which did happen and that’s one of the main reasons for our improvement in results. Also quite confident that the price increases and the changes which we did in Q4 large part of it is sustaining in as we entered April, completed April, entered in May.
But as we stand on the 1st of May a large component of what happened in Q4 continues to be present in April and as of now in May.
Pratik Kumar
Well, thank you sir. I’ll get back to the team.
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 couple of questions on Bhagwat. Just a clarification question. When you say you’re looking at GCPAs from external investors. Mr. Jaikumar, have you already do you already have an agreement in place with these investors would largely be and getting private equity investors who put in the CCPA. When you say 600 you already have an agreement in place?
Jayakumar Krishnaswamy
Yeah, we are on term sheet exchange levels right now. As you know that we signed the court order came on 3rd of April and sometime earliest could be 3rd week of May. We are still working on the various procedural issues with the CCP would be the RP over the next two to three weeks we should be able to firm up the term sheets. So we are pretty confident that these two instruments, CCDs and CCPS will be concluded before we kind of conclude the deal. In any case what we have done as I mentioned in this earlier remark while the shake hand has to happen it might take a week or two here and there.
We will do a bridge financing to ensure that if the date of paying the money happens. So we will do a bridge financing in interim and that’s why I mentioned in my speech that we’re doing a bridge financing of 1200 crores for a max period of six months. But we are fairly confident in completing the CCPS and the CCD rule before the timeline Mrs. I mentioned.
Satyadeep Jain
Okay, fair enough. Just secondly on the now that you have completed the formality for acquisition, you have better idea when you look at the refurbishment, the entire commissioning of plant. Can you maybe walk us through the timelines the milestones that we can also track from here? Let’s say for the next 24 months.
Jayakumar Krishnaswamy
Sure. As I mentioned, the original plan when we did the due diligence as well as the closer truth date when we did a technical discussion with our technical partners, the original scope was to refurbish cuts and also get the Surat lending unit going. Along the way we also realized that there are incentives available in the state of Gujarat. And so we have changed the scope, increase the scope in cuts to refurbishment plus also the branding unit setting. Setting up a branding unit in Kutch. So the broad timelines of this obviously we can expenditure till the deal is consummated.
So I’m assuming in the next few weeks we consummate the deal. But to get a head start of the we have done a couple of recce trips to the place. We already appointed a technical consultant who is going to design the plant for us. Internally we have very clear cut understanding of what are all the changes which we need to make in Kutch as well as Surat. Namely the. I will just give a little bit of a broad highlights of what we are planning in Kutch and then I will talk about the broad highlights of Kutch being basically many things are in very good shape there in Kutch in terms of the kill per se, in terms of the ccr, in terms of overall crushing equipment, mines equipment, all those things are just needs overhauling.
The VRM there, the coal mill as well as the raw mill, all of them. I think we have had all the OEMs are in necessary and made a technical estimate as well. The cost estimates already in terms of how long it will take, how much it will cost to kind of refurbish these assets. The housing is also kind of half complete residential complex for the employees. The mining area is almost. Equipment is in fairly decent shape. So lot of things are in good shape in terms of our original assessment as well as what we saw later.
I guess we are very happy that our due diligence was fairly accurate and we have not gone quite away from our original estimate in terms of what we needed to do. The broad timelines being as soon as we complete the deal. Our target is in the next six to eight weeks all the purchase orders will be rolled out and the longest lead time item for could be the desalination plant and some of the other infrastructure should take typically 12 months, 12 to 13, 14 months. An outside limit of delivery into the site and then pre commissioning should start sometime end of Q2 next year and then by Q3 we should have commissioning completed in Kutch.
In terms of the clinker manufacturing, the geo pursuit again will start start in parallel. But that again should take close to 15 to 18 months. So we should be having matching timeline, give or take one month here and there for the GE to be operational in Kutch. Coming to Surat. While we knew what was available there in Surat. So we now have a clear cut idea what all needs to be done in terms of the mill, in terms of the packing line, the truckloader, the ccr, rest of all the stuff. Again here again our current estimated it should take after the purchase order which is released in close to six to eight weeks, anywhere between 12 to 15 months for the mills to be operational.
So technically as we speak we are timing in such a way that six to eight weeks purchase orders goes before the technical design is completed. Contractor mobilization as well as rest of all the stuff will happen in parallel. And by the time we hit Q3 next year we should be ready for pre commissioning trials in both the sites and GU should be operational touch end of Q3. That’s broadly the timeline. When we meet up for the next earnings call, I’ll be able to give a little bit more color to the plan which we are building right now.
Satyadeep Jain
Thank you for all the details. Mr. Jaikum. Just on the decision to have the GU in Kachai, if you look at coastal transport, would it not have been more prudent to transport linker rather than transporting sinker? What’s the thought? I know you also have a rail line you’re looking at from Mundra sign. Just want to understand the thought behind putting up a GU in Karachnar than Surat.
Jayakumar Krishnaswamy
No, Surat Gu is very much on. Actually Surat has got three VRMs. So we are going to operationalize two of the VRMs from day one. That’s the plan and certainly one will be commissioned at the timeline. So we are targeting all the five regions of Gujarat, Mid Gujarat, South Gujarat, Saurash and Kutch. Then you have the Banskarta as well as the Ahmedabad area. All the markets we are targeting currently we sell in Baroda, Sures and Barraskata. But then with the Kutch facility coming, we are targeting the markets of Sourach, Rajpur, Porbandar and that part of Gujarat to the grinding unit in Kutch.
And the clinker movement via jetty will continue to happen in the original plan which we spoke about in the last call all the way from Kutch into the jetty in Surat. And we would be grinding cement in Surat as well for the markets in South Gujarat as well as West Maharashtra and North Maharashtra.
Satyadeep Jain
Okay, thank you. I have a couple of more questions. I will join the queue. Thank you so much.
Madhumita Basu
Thank you Satyaji.
operator
Ladies and gentlemen, in order to ensure that management is able to answer queries from all participants kindly restrict your questions to three at a time. You may join back the queue for follow up questions. We’ll take our next question from the line of pages. Pradhan from Citi, please go ahead.
Tejas Pradhan
Yeah. Hi sir. On the like breakup of the refurbishment cost that you have mentioned. 600 crores, 600 crores and 300 crores in three years. FY 26, 27, 28. So just wanted to understand is this just related to the planned startup or considering the that I mean there is some Capex to be done in FY28 as well. Whereas the commissioning is expected for 3Q27. Is this 1500 crore split into some part of Capex which is not required to start the plant or is that difference just timing delays of like. I mean the delay in making payments to your contractors.
Jayakumar Krishnaswamy
So it’s very clear actually when we are going to start the plant when I mentioned Q3 kick starting the facility, we will certainly start the clinical facility in Kutch. End of Q3 will be the GU. Q3 means December FY27 and also then comes the Surat out of the three mills at the first stage we are going to commission one mill because at day one we are not going to sell the 6 million capacity. So we need to ramp up the market. So we are not in the hurry to kind of set up all this on the first one and a half years.
So that’s why we kind of phasing the expenditure in such a way, investment in such a way that get the clinker line going, get the sewer branding unit going, one unit, one VRM and also get the GU going which means this year FY26 there will be a set of expenditure. FY27 there will be set of expenditure but part of the investment will get into maybe Q FY28 and hence the phasing is what I mentioned. All that is needed to get into the market and be in the market will happen by end of Q3 next year which is FY27.
However this overall project should be completed will be completed not the end of December next year it will get into another three, four months which will technically get into FY28.
Tejas Pradhan
Okay, okay. And just in addition to that I mean what would be the pace of ramp up that you would be expecting over here. Once you like start the commissioning, how long would it take for you to fully utilize the capacities over there?
Jayakumar Krishnaswamy
Again, I’ll go back three months ago during your earnings call in January. We did speak about it, just kind of refresh the stuff. Currently in Gujarat we already sell close to a million tonnes of cement in trade and not trade. And as we speak we have the facilities in Chittor and Nimbol which service the entire north market as well as Gujarat. And one of the rational for Abhadra is to kind of. It’s a value buy and gives us the opening in the west market of Gujarat and Maharashtra. Plus also frees up capacity for north when the plant is more or less sold out next year, same time.
The thought process being once the Vajraj starts at Q3 next year, the 1 million ton which we have been selling in Gujarat during the course of this year, certainly as for market growth as well as our trade channel expansion, this number itself is going to increase. So I am really giving a. It is not a kind of number which I am kind of, but I’m just giving a regular course of things. This number certainly would have gone from a million ton to million and a quarter. So the thought process is the million and a quarter tonnes will move from Gujarat.
The cement which is spared out of Gujarat will be used in Rajasthan, Ariana, Western MP and Afghan. So FY27, Q3 onward, the capacity which is freed up from Gujarat will get into North. And when Bhadraj starts, we will already have a million and a half market which is already developed from our products in north open for Bhadraj production. Along with that, during the course of this year Q3 and Q4 and Q1 next year we plan to start appointing dealerships in Gujarat, expanding the market, spend behind our brand, spend the network, employ people, establish the channel, create key accounts.
We call it the project wide. So this is the project which is set up to kind of expand Gujarat. And when the market, when the plant is ready, we already have a market which is one and half million tonnes and then the channel which will be ready by Q3 next year. So in FY27, half month probably 0.3, 0.4 million tonnes from Bajraj will be sold in Gujarat. And in FY28 we are targeting a full year 2 million tonnes sale in Gujarat. And in FY29 this will go to higher number and then on the build up happens.
That’s the kind of target which we have in mind.
Tejas Pradhan
Sure. Thanks. That’s all from it.
Madhumita Basu
Thanks Tejas.
operator
We’ll take our next question from the line of Parag Thakur from Fort Capital. Please go ahead.
Parag Thakur
Yeah, hi. Thanks a lot and congratulations for excellent set of numbers. So just wanted to understand that in this year, this quarter itself after paying interest I think your cash profit was close to 400 crores. So what I am trying to say is that how much of the entire 3000 crore you feel that actually on a cash flow basis net debt addition due to the 3000 crores in Nuoco’s book, as you said you are just taking 600 crores right now. But since Vazaraj is your company ultimately the investors are going to look at consolidated consolidated net debt, right? So I would like to say that you can generate around 1200-1300 cash profit every year based on if the demand and pricing remains favorable, which is looking to be favorable right now.
So on an at the end of the CAPEX cycle again what your net debt to EBITDA can be, is there any number in your mind.
Jayakumar Krishnaswamy
At this point of time? End of CAPEX cycle three years from now I won’t be able to tell you what is the kind of number which we will have. But suffice to say the target which we have is three year cycle from now we certainly will be back at anywhere between 3,500 to 4,000 crores because that’s the number which we have always maintained that we are comfortable carrying a debt of close to 3,500 to 4,000 crores in our books because eventually we have to grow as well. And when we have to grow we need to fund the capex.
And as we have mentioned in the past we would be targeting a number anywhere between 3,500 and 4,000 crores around the end of CAPEX cycle for us to be ready for the next wave of expansion once the Bhattraj is done.
Parag Thakur
Correct. So basically you are saying that at the end of this capex also your net debt on a consolidated level will remain at around 4000 crores only because of the internal accruals which you are generating and funding your CAPEX through internal accruals.
Jayakumar Krishnaswamy
If we have to kind of okay, I have to do a mass handling modeling for you. If I were to look at the current market condition and the volume growth and the EBITDA and the overall cash that the business will generate if I simply one swallow doesn’t count as quantified Q4 into full year and the next three years I won’t do that. But still I would Be kind of very balanced in terms of projecting the numbers to the organization. Because the market conditions may not be the same all the time. But suffice to say that at any given time during the tail end of this capex period and also at the end of this capex period our target will be to kind of keep a debt level anywhere between 3,500 to 4,000 crores.
Parag Thakur
Yeah, thanks. That is very helpful. And just to ask one last question that when you said that large part of the price increases done in Q4 are sustaining and it will flow into up till now in April and May, how is the demand behaving after March in terms of volumes?
Jayakumar Krishnaswamy
I won’t be able to give a forward looking statement in terms of volumes as well as how the price will pan out going forward. Because I mentioned as we stand complete April as well as the threshold of May, we are looking at this kind of number. But as the market estimate as well as our read of market as well as what’s being projected for the cement industry the industry is looking at close to about 7 to 8% volume growth in the coming year. And then that’s the kind of number which I am foreseeing going forward.
Parag Thakur
Thanks. All the best.
Madhumita Basu
Thank you.
operator
We’ll take our next question from the line of Rajesh Ravi from HDFC Securities. Please go ahead. Rajesh, can you please unmute your line and go ahead with your question please.
Rajesh Ravi
Hello. Hello.
operator
But there’s a lot of background noise.
Rajesh Ravi
Okay, I’ll come back.
operator
Thank you. We’ll take our next question from the line of Shravan Shah from Dalit Capital. Please go ahead.
Shravan Shah
Yeah, thank you. Ma’am, just to get us some data point first is the lead distance for fourth quarter railroad mix. Petco share in the fourth quarter and AFR share in the fourth quarter.
Madhumita Basu
Yeah, Shaban, I think I’ve got some of the data points here. So let me take it. Q4 FY25 lead distance. We did get some incremental improvement. Stood at 324. The road share was 63%. And what was your third question?
Shravan Shah
AFR and petcoke, sir.
Madhumita Basu
Okay, so the fuel mix and just coal 38% of which 26% was linkage. Petco 52% depend on Petco. And volumes were high, Operational volumes were high and AFR was 11%.
Shravan Shah
Got it. And Ma’am Sarvan mentioned 7 to 8% industry demand growth, similar growth in FY20.
Madhumita Basu
The context was how we are looking at the FY26 growth. As you know that the Year gone by the growth has been more in the region of 4%. But this is since it rose. And our outlook. I shared earlier too that we see a Demand growth of 7 to 8% over 2 or 3 quarters should also create a favorable environment for prices to sustain. That’s the outlook as of now.
Shravan Shah
Okay, got it. And then just to clarify in terms of the whatever the way we will be funding the weather. Just to put you a simple number in terms of the Capex for the console level in FY26 27. So obviously this 1800 crore whatever way we are funding so that we will be spending immediately by maybe by June days and then another maybe 150 odd crore. So is it fair to say for this year FY26 it would be a close to 2,200 crore plus kind of capex will be there and next year would be a kind of 1500-1700 crore capex will be there in FY27 at console level.
Madhumita Basu
If I might make a request. Mr. Krishna Swami has been taking this question in many forms almost three times in this call. May I request you to reach out to the investor relations department. We’ll give you a specific perspective.
Shravan Shah
Got it. And also when sir was mentioning that even by end of third year we are also looking at 3,500 to 4,000 crore kind of a net debt. I was just wondering how that will be. Even if I. Let’s say look at the. The way that we were saying one and a half million ton volume in the for Vadraj in FY27 then 2 million 3 million. So 5 and 6 and a half million. Even if I take a thousand rupees EBITDA would be a close to a 650 odd crore kind of EBITDA that will generating.
So is it. Is it still. Are we confident that at the end even FY28 we will be having a 3500-4000 crore kind of a net debt.
Madhumita Basu
Right? That is our operating framework Shaman. As I said because we can’t be doing a full financial modeling on the call. So do please reach out to us and we will walk you through the.
Jayakumar Krishnaswamy
Part we can add one more thing to Shravan. You are looking at Batraj is going to be a wholly owned subsidiary of Nocos. So it’s no which is going to invest on capex in the group companies of Nova Vista, Glio Vista Ltd. And Madras Commenced Ltd. So we have to look at the overall results of the PND L of the company to find out where the cash will come out, how capital deployment will happen. Suffice to say I mention one statement at a local group level in the coming year we’re looking at a Capex not more than 100 to 150 crores.
Hence all the money which will be generated. No to group will be used to fund the Madras Capex. Hope that meets your question.
Shravan Shah
Yeah, got it. And the pink curve. But we have three and a half minutes.
operator
Back in the queue please as we have other participants.
Shravan Shah
Okay, thank you. Thank you.
operator
We’ll take our next question from the line of Jyoti Gupta from Nirmal Bank. Please go ahead.
Jyoti Gupta
Good evening ma’am. Good evening sir. I hope the performance that we have done in quarter four is still over in quarter one, FY26 as well. And to that you know, to this I want to add. We are adding almost 150 million capacity in the next two years. 26 and 27.
operator
Can you speak a bit louder please? Your volume is very low. Can you use your handset?
Jyoti Gupta
Can you hear me? Yeah. So we are adding literally 95 million tons and at 7% growth we will have an incremental demand of only 67.9 let alone 70, 68 million tons. How do you think, is this not one of the first prices going forward? And how are, how do you think we want to manage or be able to maintain our market share going forward?
Madhumita Basu
Thanks Shoti. Actually when we look at the numbers, firstly, you know the kind of operating mix we have for us the dominant space in which we need to take a look at these numbers is still in the eastern Asian market, particularly in the perspective of FY26. So here again this is a discussion we heard it had earlier paused too. There are four things we should look at. What is the additional cement capacity that is coming in and what is the clinker based cement capacity that we are expecting? So if we take a look at the clinker based effective clinker capacity during this period I am looking at FY25 to FY27.
Clinker and yeast will go up from a 56 million tons to 62 to 67. So clinker backed cement capacity will go up from an estimated 96 million tonnes to 105 million tonnes to 114 million tonnes. And this if you take a look at the percentage growth in the cement demand even at 8 ish percent two years in a row because that is the outlook we are taking now. The capacity utilization backed by clinker and east continues to. So there is Not a radical change in the supply situation to dampen the prices. And again as we said, we have gone through a period in east of severe dips in demand cycle.
This is now improving and outlook of anywhere between 6 to 8% sustained quarter on quarter on a y o y basis. We feel is a good environment for prices to stabilize.
Jyoti Gupta
What about north, ma’am? Because if I understand Your mix is 60% east and 40% north. We have a lot of biopsies coming. In the north as well,
Madhumita Basu
Jyoti. That is right. But in north the we are a 6 million ton player there. It is not that our leadership position in the top fleet is being challenged. So we do believe that there is growth given our strategic intent and our product portfolio to grow in the north.
Jyoti Gupta
Thank you ma’am.
Madhumita Basu
Thank you.
operator
Thank you. We’ll take our next question from the line of Sanjay Nandi from VT Capital. Please go ahead.
Sanjay Nandi
Thank you ma’am. Thank you sir, for the opportunity. Congress in a good set of numbers. Sir, can you please throw some lights on the pricing front? Like what has been the price movement from the exit of Q4 to as long at least as we talk to.
Jayakumar Krishnaswamy
Yeah, I think from Q4 average to March exit overall the realization has increased close to about 8 to 10 rupees per bag.
Sanjay Nandi
So from exit of Q4 it’s up by 8 to 10 rupees per bag.
Jayakumar Krishnaswamy
Right. End of December to Q4 the price realization increased between anywhere between 8 to 10 rupees per bar.
Sanjay Nandi
And I was asking like from the exit of Q4 like for the March quarter. And as we stock in the like second week of. Yeah, yeah.
Jayakumar Krishnaswamy
We can again look at close to about anywhere between 8 to 10 rupees per bag increase in the prices from Q4 all the way to Q1 next year.
Sanjay Nandi
Okay. From Q4 8 to 10 rupees. Right.
Jayakumar Krishnaswamy
That’s right.
Sanjay Nandi
Great. Great, great. So that’s what my. Sir. I’ll come back in a queue sir. Wish you all the best.
Madhumita Basu
Thank you.
operator
So we’ll take our next question from the line of Satya Deep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi, just a couple of follow up questions. One was you mentioned you would be running lean on maintenance capex for the next three years. Somewhere about 100 odd crores. Just wanted to understand this long duration going lean on maintenance defects. How does it impact the maintenance and operations of the assets? It’s just a relatively low number sustaining for such a long period of time. I just wanted to understand the implications.
Jayakumar Krishnaswamy
Okay. When I mentioned Satajeep, the maintenance Aspect is not maintaining the plant. So these are all routine capex which are there to kind of do debottlenecking, increasing small capacity increases or basically all of them is technically mandatory safety capex or improving product quality or increasing productivity. That’s the kind of capex historically our company spends in the tune of 100 to 100%. We used to be less than 100 crores before the acquisition. Now with the Imami plant coming in that number is anywhere ranging between 100 to 150 crores. When I mentioned that the maintenance capex is not bearing on the maintenance equipment.
Maintenance of equipment comes in recession. Maintenance that gets into the operational expenditure of the company. There is no kind of compromise on keeping the equipment on shipshape. All I mentioned was at 19 million tonnes in east and 6 million tonnes in north. Right now in this year and the coming year we don’t intend to expand the capacity big time in any place in terms of clinker increase or branding increase or the AFR which we did or the siding in Sonati or the siding in Jatpur. Such kind of capexes we don’t intend to invest in the coming year and the year next.
However, maintaining equipment is part of the routine expenditure that anyway will incur to ensure that the lines are in good shape. So suffice to say the philosophy of the company is to maintain the reliability of greater than 98% and we run total productive maintenance in all our plants and maintaining equipment health and equipment well being and ensuring equipment productivity continues to be of the highest level and it is our competitive advantage.
Satyadeep Jain
Okay, just one follow up on the marketing strategy. There is now new marketing team looking at this quarter also has there been any change in branding strategy? Is it more status quo so far? Just want to understand. You mentioned price correction. I understand. Is it generally industry pricing fees or has it been brand positioning or something? Especially with the new team in place.
Jayakumar Krishnaswamy
People are there occupying positions. So I guess I’m not going to talk about who occupies the chair or not. Eventually the no co leadership team runs the company where all of us are part of the leadership team of the company. So there might be odd change is always at the top. So I don’t think people changing is going to change the strategy of the organization. So we have been consistent with the top leadership of the company. So I want to assure all of you that no cool strategy in terms of being a premium player, being a blended cement player priority in slack cement and having a higher trade share and getting a TK ratio one of the tops in the industry, all those have been consistent for many years.
We don’t intend changing any of those core principles of the organization. Our brand being Concreto, Euroguard or the two flagship brands. That’s how we run our organization. On the Concreto side, very happy to report that in fiscal 25 we launched Concreto Uno at a price point of close to 35 rupees more than the regular Concreto and we are very, very pleased. In the month of March we sold 80,000 tons of Quantito in the states of Bihar, Bengal, Jharkhand and expanding the same to Orissa. Going forward our target is to get a million tons of Quantito Uno in the coming year.
Along with that Hiraguard microfiber as Meeta mentioned, we now make in Haryana cement plant, make it available in Haryana, Rajasthan, Western mp, Chhattisgarh and rest of North India. And this product currently it used to sell about close to about 16 to 20,000 tons per month. We have ramped it to about 35,000 tons per month and going forward our target is to take it to half a million tons in the coming fiscal and beyond. So no for strategy of rename and super premiumization continues to hold. Good. So if you had to ask me a question, did we do anything different in FY25? Yes, we did something very, very different in FY25.
Launched concrete to Uno at a price point which is right at the top in the market which is got and we’ve demonstrated that it sells at extra 56,000 tonnes per month and rolling Nira Guard microfiber through the Duraguard franchisee Bank of India. So These are the two salient points. Other than that Q4 trade share increase versus Q3, our TIKI ratio is at 1.72 and above. So all those things continue to hold good. Marketing strategy is strong, brand strategy continues to be stable and consistent with the path and we have things in order in place.
Satyadeep Jain
Thank you for the detail Andre. Thank you so much and wish you all the best.
operator
Thank you ladies and gentlemen. We’ll take that as the last question for today. I now hand the conference over to Ms. Matumita Basu for closing comments. Over to you.
Madhumita Basu
Thank you Yashastre. Ladies and gentlemen, thank you for your questions which we trust have been well addressed. Our investor relations team will remain available for any clarifications required. To conclude, we remain optimistic about the cement demand. As we look ahead, our focus will be on scaling growth and expanding our market footprint. The company will continue to drive key initiatives pertaining to premiumization, geo optimization and cost optimization. This aligns with our renewed mission of being a trusted building materials company, creating value for our stakeholders. Thank you once again for being with us today. Good day.
operator
Thank you on behalf of Nuvoco Vistas Corporation limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.