Nuvoco Vistas Corporation Ltd (NSE: NUVOCO) Q4 2026 Earnings Call dated Apr. 15, 2026
Corporate Participants:
Bishnu Sharma — Investor Relations
Jayakumar Krishnaswamy — Managing Director
Maneesh Agarwal — Chief Financial Officer
Analysts:
Siddharth Mehrotra — Analyst
Naveen Rameshwar Sahadev — Analyst
Satyadeep Jain — Analyst
Shravan Shah — Analyst
Tejas Pradhan — Analyst
Gaurav Goel — Analyst
Girija Ray — Analyst
Pinakin Parekh — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Nuvoco Vistas Corporation Limited Q4 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 — Investor Relations
Good evening, everyone, and a Warm welcome to Nuvoco’s FY26 earnings call. We appreciate you taking the time to listen to us. Let me begin by sharing a few key highlights as we reflect on our performance in fiscal year 2026. We ended the year on a high note and delivered the strongest annual performance for Nuvoco. We achieved the highest volume of 20.4 million tons and EBITDA of INR1,881 crores in the history of the company. We expanded our industry-leading premiumization base by 300 basis points year-on-year to 43% in FY26 and thus establishing a stronger base going forward.
The fourth quarter was also a landmark quarter as we for the first time reached 6 million ton volumes with historic high quarterly EBITDA of INR580 crores. We witnessed improvement in overall demand during fourth quarter as the CapEx by both state and central government gained momentum, which is up by approximately 12% in Q4 till February supporting infrastructure activities and cement demand. Overall, in our view, we performed well in FY26 despite the challenging market conditions and headwinds witnessed during Q2 and Q3. On the growth agenda, we are pleased to share that the Vadraj cement project is progressing well and remains on schedule. The clinker unit and grinding units are planned to be commissioned in phases between Q3 FY27 and Q1 FY28.
Let me give you a quick on-the-ground update on project execution at both our Kutch and Surat facilities. In Surat grinding unit, key equipment and spare deliveries are completed. The 66 kV grid connection has been established. Equipment upgradation and electrical installations are nearing completion and trials commenced. In Kutch clinker unit, equipment upgradation and electrical panel testing are underway. Cyclone inspection for refractory assessment is in progress and deliveries are on track. In Kutch grinding unit, civil works are on track with works on Silo, VRM Foundation packing plant and hopper building processing as scheduled. Installation work of VRM has also started.
For Kutch, railway siding engineering scale plan and detailed project report approvals from Indian Railways is at an advanced stage and site exhibition has also commenced. We are also establishing a bulk cement terminal at Viramgam Sachana, Gujarat with a dedicated railway siding and a handling capacity for approximately 1.5 million tons per annum. The terminal will enable efficient unloading and storage as well as dispatch of loose bag cement. It will serve as a strategic distribution hub to expand our reach across the Gujarat market with commissioning targeted for FY28. Alongside this project, our East expansion program of adding 4 million tons per annum of grinding capacity in phases through FY28 is also progressing well.
Looking ahead, we remain confident that the structural demand story for cement is intact. On infra, central government CapEx for FY27 is planned to grow by 20% and state government CapEx to grow by 15% implying a meaningful step up in construction activity. On housing, the PMAY Gramin allocation is up 73% and in the East specifically, state governments have planned housing schemes worth approximately INR29,000 crores for FY27, which is directly positive for Nuvoco given our leadership in the geography. Moreover, the Asian Development Bank recently revised India’s FY27 GDP growth estimate upward by 40 basis points to 6.9% with a further acceleration to 7.3% projected for FY28. This is a constructive signal for cement demand going forward.
While the structural demand outlook remains positive, we are mindful of near term headwinds stemming from current geopolitical uncertainty. Rising fuel prices, currency volatility, escalation in raw material costs particularly for packing materials could exert pressure on margins in at least one to two quarters going forward. We are closely monitoring the situation on the ground. We have already initiated proactive measures of prudent programming practices, accelerated cost optimization initiatives and strengthening supply chain efficiency to mitigate the impact and protect our margin profile to the extent possible.
With that, I conclude my opening remarks. I’m here with Mr. Jayakumar Krishnaswamy, Managing Director of Nuvoco Vistas; and Mr. Manish Agarwal, CFO, Chief Financial Officer. We’re happy to answer any questions you may have. Thank you very much. Over to you, Yashasree.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] We’ll take our first question from the line of Siddharth Mehrotra from Kotak Securities. Please go ahead.
Siddharth Mehrotra
Thank you, sir, for the opportunity. Sir, one quick question on our CapEx. Now it seems that when we first announced the expansion…
Jayakumar Krishnaswamy
You have to speak a little bit louder on the mic or if it’s on the handset, so we can’t hear.
Siddharth Mehrotra
Is it better now?
Operator
Can you use your handset mode please, Siddharth?
Siddharth Mehrotra
Yeah. I’m using my handset mode. Is it better?
Jayakumar Krishnaswamy
Yeah, go ahead.
Siddharth Mehrotra
Yeah. So I just wanted to check the — at the time when we splitted our Easter debottlenecking plans, I think it was mentioned that we plan to have them possibly by the end of FY 2027 with certain capacities coming online even by the end of FY 2026. Now it seems that we slightly delayed those plans. So I mean if you could help me sort of understand what sort of timelines we are looking at with respect to the expansions in the East, that would be really helpful.
Jayakumar Krishnaswamy
Okay. Thank you. So as mentioned in a couple of calls ago, we had clearly mentioned that we are doing a debottling of close to about 4 million ton capacity expansion in East with 1 million ton coming from all the four plants of Jojobera, Orissa cement plant, Panagarh cement plant and Arasmeta cement plant. The timelines we had mentioned was in end of FY26 or Q1 FY27 we will commission Jojobera, Panagarh and then subsequently Jajpur and last could be Arasmeta. So we have more or less done the debottlenecking in Jojobera as well as Panagarh.
We’re just waiting for the CTO. So NIPL has been completed which is this no increase in pollution load with — there’s a clause which is that much amount of expansion you can do. That is already done and we’re just waiting for the final approval to happen. So in terms of hardware modification, it’s all done in this two plants. Jajpur should happen in the next two to three months and Arasmeta will happen by the end of this year. So certainly, by the next few weeks or month or so, we should be able to — once the CTO comes, we should be able to make an announcement on completion of this expansion.
Siddharth Mehrotra
Understood. So everything should be online by the end of FY 2027, is this correct way to look at it?
Jayakumar Krishnaswamy
Definitely. It should solve more or less — we just waiting for the CTO to happen.
Siddharth Mehrotra
Understood. Secondly, sir, quickly on the fuel mix given the sort of volatility in the energy markets due to the ongoing conflict. Could you just tell me what is our current kcal cost and what sort of change do we sort of expect once we sort of transition to the newer coke procurement or coal procurement as the case may be? And what sort of price increases we are looking at on the power and fuel cost side?
Jayakumar Krishnaswamy
Yeah. I guess number of things which you asked, basically the impact has happened on three levels. One is obviously pet coke. Second is impact of international coal prices in the — domestic coal prices and the third one is the impact of rupee depreciation because all the pet coke is imported. In Q4, our blended fuel cost for the company was INR1.44 per million cal and that was more or less same as the previous quarter. We were already done at INR1.43 types. So we are more or less little bit more than that, but at INR1.44, not too much of a difference. But then as we enter Q1, pet coke which was at INR1.84 per million cal is becoming INR2.01 per million cal.
And we also have adequate stocks for six to eight weeks and some of the orders which we have booked on pet coke or on high seas at the rates which were prevailing during middle of March or end of March. So we are foreseeing a number of in Q1 anywhere between INR1.51 to INR1.55. So we will also keep on altering the mix to ensure that we get kacha coal or Eastern collieries, east coal or increase or decrease of AFR. So that’s how we should have a range of close to about INR1.51 to INR1.55 should be the number I foresee for Q1. But all the shipments which are currently booking which should come around July, August which will have the impact for Q2, there I guess there will be a further increase in blended cost for the company and there I think it’s too early for me to give an outlook what will be the cost as we see because we are already booking now. But suffice to say that this INR1 to INR1.55 which we are forecasting for Q1 will further increase in Q2. So that’s the outlook I can give.
Obviously all this will have an impact on the energy cost for the company. A few things which we have taken during the month of March and certainly in the month of April from the exit prices of March into the prices in April, we have taken price increases in both trade and non-trade channel in all our markets. In Eastern markets, we have taken a price increase of INR10 in the trade channel across the states of Bihar, Jharkhand, Bengal, Chhattisgarh and Orrisa. And on the non-trade side, we have taken close to about INR20 per bag price increase in all our states. So East has been INR10 per bag in trade and INR20 per bag in non-trade is the price increase we have taken. And this has not happened on 1 April. It has happened around 6, 7 and the non-trade typically price increase we’ve taken on the 10 once we finished the orders for the previous month.
And hence, I think we would get a number which will be anywhere between INR7 to INR10 rupees for the full month. And also non trade could be INR12 to INR18 for the full month. That’s on the East side. On the North side similar price increases we have taken in all our key markets of Rajasthan, Haryana, Gujarat, Western MP and Punjab and Western UP. There we have taken a INR10 price increase in trade and non-trade has been different in different places. Close to INR15 price hikes in Gujarat and about INR10 price hike in Rajasthan, Haryana and Western UP. Here again, if you see the blended price increase in trade should be anywhere between INR8 to INR10 and non trade will be INR10 to INR12. So technically, across the market where we operate, we can say that we want to inform that price increase we have taken is anywhere between INR10 to — INR8 to INR12 in trade and INR10 to INR15 on non-trade.
Siddharth Mehrotra
Thank you, sir, for the detailed answers. Thank you.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Pinakin from HSBC. Please go ahead. Pinakin, your line is unmuted. Please go ahead with your question. Since there is no response, we’ll move on to the next question. Next question is from the line of Naveen Rameshwar Sahadev from ICICI Securities. Please go ahead.
Naveen Rameshwar Sahadev
Yeah. Good evening and thank you for the opportunity. Two questions. One was if you could talk more about the cost that we — cost impact probably which we faced in March month in particular because ever since this Middle East crisis broke out, we were hearing a lot about issues related to the packaging cost especially the bags not being available. So did we face any impact in the month of March or we had inventory, so now the impact of that front would come in Q1? And then related to this, my cost — related to the same cost angle, my second question was what was the pet coke mix in this particular quarter? And how flexible is it to like I’m assuming you would be looking to lower it. So how flexible — how much could it go down further and offset by domestic coal so as to mitigate the impact? That is my first question.
Jayakumar Krishnaswamy
Okay, fine. In the previous question which was asked, I responded only for the pet coke and energy cost movement from Q4 to Q1 in terms of INR2 million cal. Of course, in the month of March, we had a relatively sizable impact which came from the packaging bags and granules. The granule prices in the market which was at INR99 per ton — per kilo which was in February over multiple phases have shot up to INR155 per kilo, which resulted in increase in cost of packing bags. And that did impact the March costing of bags. We had an overall impact of close to about INR20 per ton at a consolidated level for the company. But that is for — since we also carried sufficient, what do you call, bags inventory as well as we are on a granule conversion model.
So we also had granules of different values with us. And hence, the impact which happened in the month of March was close to about INR20 per ton. But the number is going to further increase in the month of April. Certainly already we are looking at a close to about INR100 per ton increase due to packing bag cost increase and granule cost increase and conversion cost increase, which has happened. So that’s something which currently loaded on the cost line. Certainly, I have no view on whether this INR100 will remain INR100 or would it go up. That’s all subject to the granule cost which is kind of gone up from INR99 to INR120 to INR140 to INR150 to INR155 in multiple steps.
Currently, it’s holding out at this kind of number. But if the conflict were to continue for longer and then we are going to have issues with incoming crude, I think this number will also have negative side because the Government of India has already asked the granule manufacturers to divert crude for making LPG and other stuff and hence, there is a general shortage of granules in the market. So April, we are looking at INR100 per ton increase in packing bag costs. And May and June could be — I can’t make a guess. It could be at this level or little bit go higher also in the coming months. Other than that, the cost inflation did not happen in March, but will happen going forward is the cost of mineral gypsum.
Mineral gypsum is also used in manufacturing of cement along with FGD as well as chemical gypsum. And there we can see close to about INR20 per ton increase because of mineral gypsum import cost. Most of the mineral gypsum comes from Oman and there again the supply lines are cut. So the second question is you asked what is the company doing to mitigate this cost inflation. As far as bag is concerned, it’s going to be difficult because it’s not possible to mitigate because that’s the only — only source is the granule manufacturer in the country like IOCL or Reliance. So that’s where the granules come and there I think there is a challenge. So it can’t be mitigated. It can be only offset by price increases.
As far as pet coke increase, obviously, we have a formula. We have a fuel mix in East and North is different. Nuvoco is also close to about 70% plus sales, which happens through East market and there our key factories of Arasmeta, Sonadih and Raseda. One of the things which we have done in our three plants is we are reducing continuously the use of pet coke. We are changing the fuel mix in the calciner and we are changing the fuel mix in the main kiln. As we speak, people are all working on this effort to reduce the pet coke consumption in Arasmeta and Sonadih to less than 20% from the current 23% odd and also from Raseda from the current 35% to less than 30%. So that’s going to have a good impact.
And with this reduction, we’re also looking at other coal sourcing from Eastern collieries and kacha coal and various other coal initiatives. So the blended cost is being controlled by reducing the pet coke consumption as well as try and get local coal, which will offset the overall coal. Local coal prices have also gone up. But overall, I guess, the initiatives are being taken to reduce the consumption of pet coke by at least 300 to 500 basis points from Q4 actual consumption. That’s on the Eastern side. On the Northern side, again, we have entered into some unique coal contracts with Central India as well as from Varanasi Depot to get also some domestic coal, which we have not used in the past to be used in the kiln in our Chittor factory. There again our target of pet coke consumption which was in the 55% and 60% has been brought to 50% and we are further reducing to 45% by use of domestic coal.
In Nimbol, we are still trying to work out some new alternative to see whether lignite can be blended on the kiln and reduce further the pet coke consumption. So technically speaking in Northern plant, our pet coke consumption from 50% we are trying to come to 45% which with their first manufacturing team will be able to certainly reduce by 200 to 300 basis points. Number two, increase of AFR in these two plants, we have full fledged investments done in Chittor and Nimbol for AFR processing, which will have the refused material or carbon black or rest of all the stuff. So North is going to be unique domestic coal into these plants, number one agenda.
Number two agenda is to try and see whether we can process lignite. Number three agenda is to increase our AFR quantity so that our cost in North is brought down to less than 50% of pet coke consumption. East is going to be overall reduction in pet coke by about 300 to 400 basis points supplemented by increasing use of kacha coal, coal waste or get it from Eastern collieries. So that’s the broad work the teams are doing.
And on gypsum usage, a big initiative we are doing is to find out how can we supplement mineral gypsum from — replace mineral gypsum with FGD gypsum. I think our procurement teams are working with nearby power plants in all the plants to try and increase use of FGD gypsum in all the plants, which will reduce the cost of gypsum usage. So gypsum will be controlled. Fuel costs, we are working on. Bags, I don’t think at this point of time there’s a clear cut way forward. So we’ll have to live with the price increase. And that’s broadly the agenda for the company to mitigate the cost challenges.
Naveen Rameshwar Sahadev
Yeah. So thank you for the detailed reply. My second question then was on the pricing and the competitive intensity. So you did mention in your I think previous questions that the range of price hikes that have happened both in North and as well as the East region. I think similar sort of a commentary we had I think witnessed or heard in the previous con call also at the time of January that there is some price hikes. Despite peak season demand, I think the price hikes that have happened in March quarter as a whole have been a little underwhelming, just about 2% or so. So I just wanted to get your views about the confidence of this price hike now sustaining because I think April, May onward, you also start seeing the seasonally weak monsoons coming through and then the impact of overall volumes and the regular weak season thing. So do you think these price hikes in April are more sustainable or you think it can still be — could still face challenges with the onset of monsoons? Thank you.
Jayakumar Krishnaswamy
Demand, supply and pricing typically will go through the classic demand supply model. But right now, we are not on certain demand supply framework at all. These are all unique times. And if you see almost every industry and every sector in India has taken price increase, paint industry, adhesive industry, automobile industry, FMCG industry. Almost every industry whose raw material is crude linked have taken price increases. So there is no escaping the fact that we will not absorb this. We will absorb this inflation and reduce the profitability of the company.
So unlike in a normal scenario where demand peaks or demand drops and then supply is there, there will always be pressure on pricing. But these are all abnormal times. And I guess every player in the industry in our sector or outside the sector is facing the impact of crude. And I am fairly confident that the price hikes which we have taken will stay put in the near term and hopefully further cost inflation doesn’t happen then we could — I am confident we can stabilize with the current prices. But I certainly feel that if further cost inflation happens, I guess, we will have to find a way to pass on the cost inflation down. So that’s the view I have and that’s how our thought process is.
Naveen Rameshwar Sahadev
Yeah. So just to conclude, we will see more price hikes if there is a further cost inflation. Otherwise, so far the cost — the price hikes are good enough. Is that the way to look at it?
Jayakumar Krishnaswamy
If you really put the mathematics of it, so I cannot get into details of the total cost increase and the total price increase. Obviously 100% one cannot defray on step one. But by and large, the efforts which we have taken to take the prices up in trade still doesn’t meet all the cost inflation. But there again I think efficiency programs are being run in the factory to offset the impact of the cost inflation. But certainly supported by price increase, geo mix, product portfolio and trade, non-trade ratios, all the other agenda which we are working. So it’s not like 1:1 ratio cost increase by 100, price increase by 100, that’s not the way one works. So I guess there is certainly acknowledgment there is a cost increase. So we have done the price increase to kind of mitigate that issues coming out of the cost inflation. But in parallel as a company, as a manufacturing organization, we are embarked into number of initiatives on energy side, raw material side, efficiency side, product mix side, rest of all the stuff to ensure that we are able to compensate for the cost increase with some internal efficiencies as well.
Naveen Rameshwar Sahadev
Thank you, sir.
Operator
Thank you. [Operator Instructions] Next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead.
Satyadeep Jain
Hi. Thank you. Sir just — Mr. Jaykumar, just a follow-up on the packaging part. You mentioned that there is some conversion where you source granules on your own and then give to packing companies for conversion. Just a couple of questions around packaging specifically. So A, what is the inventory that you have for packaging? Just trying to understand because there are too many moving forces right now in terms of seasonality for packaging that we’re hearing. So what is the inventory level you’re carrying? Just trying to assess the risk of availability of packaging bags. When you source granule on your own, is it something higher versus the industry and are you facing any challenges like everybody else in sourcing the granules?
And third, on this packaging specifically that historically when we saw fuel cost inflation in ’22, there was a pivot to blending because we reduced the share of clinker in the overall mix for the industry. Now you have higher fuel cost inflation, but you also have higher packing costs which would naturally mean companies try more non-trade cement. So where are you pivoting to in terms of trade, non-trade mix this year? So all these are tied to packaging. Then I have another question. I’ll come back for balance sheet, cash flows and all.
Jayakumar Krishnaswamy
Okay. In terms of the bags, typically, we carry about 15 to 20 days of bag inventory, that’s the stuff. And I guess, it is so volatile that the bags currently which I have are at a price which was already at INR155 per kg granule and I guess any further increase in price again the bag cost is going to increase. So when I mentioned the impact of granule price increase which will come for full month April will be close to about INR100 per ton. So that’s like kind of done deal for the month of April. Any further increase in granules will anyway go to month of May, there can be next — cost impact will further go up in the month of May.
As regards the granules and conversion models, so I don’t know about other companies. So we had adopted this approach for more than a year now where we Source granules from granule manufacturers and then put it on a conversion contract with our bag manufacturers and run. But currently, since the overall granule availability itself is kind of reduced, so we still get granules from our granule manufacturer, but also use the granules which the packing suppliers already have. So right now, it’s a blend of granule supply model as well as outright bag purchase model. So that’s how we are navigating. We’ll continue to navigate the same way till such time the entire situation gets back to normal. That’s the scene on packaging.
But in terms of impact of packaging into trade segment and non-trade segment or moving from bag cement to loose cement, typically, we are a company which operates at a pretty high trade to non-trade ratio. And also our CK ratio in East which is already over — 2.1 is the CK ratio which we operate in East and in North and the CK ratio is little bit lower because we have more OPC content in North. So overall, the company’s CK ratio is 1.72. It’s pretty high per industry standard. I don’t see the CK ratio going much higher than this kind of number in the short run. So we don’t have any programs to move from CK ratio at current level to any other number to compensate for the various cost increases.
As regards the moment of non-trading from bag cement to loose cement, certain markets do operate at a loose cement model, which is typically the Gujarat market. So we would — and also some parts of Chhattisgarh where we still would send through loose cement. And if you ask the question, is there a huge thrust to move from bag into loose? Not really. One thing which we are really focused on right now is to kind of move away from OPC to blended cement more in East in the short run so that our CK ratio can further increase our energy cost per ton of cement can come down. So that’s the specific agenda I need.
Not again, OPC markets we are trying to go a little bit slow. But in Gujarat, we won’t be able to do because the market constructed itself in that way. But rest of the markets like Rajasthan or Haryana, our focus is to kind of move away from OPC to get blended cement. But that’s independent of this energy agenda. Because in the past calls I had mentioned that our North capacity is more or less reaching capacity utilization. So if you have to kind of unlock cement in North in the short term till Vadraj comes into being, we will continuously move away from OPC to a blended cement to increase that much more cement available for sale in the market. So that’s a separate agenda not linked to the energy crisis.
Satyadeep Jain
Thank you so much for this elaborate answer. Just a follow-up on this. So cost increase on the packing side is well understood. Just on the availability of bag also at the granule or bag, are you foreseeing any challenges where there is shortage and that restricts the ability for cement manufacturers to manufacture? And in that context, we heard from some channel checks that there was specific pockets where Nuvoco actually faced some challenges for very short period in the quarter. I mean that was overcome through various means. Maybe if you can talk about were there any challenges in the quarter in terms of availability and did that disrupt production at all and how are you foreseeing the availability and what actions can you take in this? So generally, there is a fear that there may be some disruption if you have lower availability of bags.
Jayakumar Krishnaswamy
I think it’s an industry phenomena. So everybody in industry got impacted due to bag non-availability in the month of March and it continues in April as well. So if you look at the East market, any market for that matter, lot of bag capacity — bag manufacturing capacity came into force three years ago. And hence, there has been a general capacity utilization — reduction in capacity utilization around COVID time and beyond that I think lots of capacities came into being. But typically April, May is the time when fertilizer movement also happens. And also with this Bangladesh issue of jute bags not coming to India there was a general scarcity of bags which started happening from February onwards.
So one was of the view that this entire fertilizer movement as soon as Bangladesh nothing can happen because that is — right now there is no jute availability there. But however, starting February itself this issue of overall bag availability and heating up of bag conversion first happened Jan end, February, March. This war is a new phenomena which happened — additional phenomena which happened in the month of March. So we were of the view that come May, once this fertilizer moment and all happens, the capacity utilization of bag manufacturer will come back to normal and this should not be a problem. But with this issue of granule itself not available, then I think that add a new layer of serious challenge. Not even new layer, a serious challenge. Availability issue, price is a problem.
I certainly can talk for Nuvoco, but I think because bag manufacturers are all common for all the cement manufacturers, I guess there is a widespread challenge for timely bag availability in certain markets all over India, more so in East where capacity utilization of bag manufacturer is running to the extent of 90% plus. So we did face in the month of March bags and the number of 6 million we could have done little bit more in the month of March. We had two major disruptions which happened in the March. One was rake availability was a serious problem in the month of March because the government decided to divert all rakes for movement of coal to power plants.
So typically, we would get 4.5 rakes per day and that came down to 4 rakes per day. So there was overall clinker moment challenge as well as bag availability challenge. In spite of that, we hit a historical high of 6 million tons in the quarter. We could have done more because we could have served the market. Demand was pretty good for us. But I guess that’s what we have to live with. So we have to sail through the coming few months with this bag shortage. And also if somebody had asked the next question, I was anyway — I had to share the issue of rake availability in the month of March. And as we sit right now, we are having serious problems of rake availability as well. And we have resorted to moving material by road to some of our grinding units because rake is not available sufficiently because all rakes are diverted to power plants.
So I think this should reduce once the monsoon sets. But that’s still the month and a half, two months away. So we face problems in bags. We will continue to face problems. So I guess it’s a tightrope walking. It’s an everyday journey where we kind of find a way to source bags, incentivize for short term incentives for the bag manufacturers to make. So net-net with all the incentives granule cost increase, it came to about INR100 in the month of March. It is continuing at a similar level in April.
Satyadeep Jain
Mr. Jaykumar, just ask one quick follow-up on the…
Operator
Satyadeep, I request you to join back the queue please as we have other participants. Thank you. We’ll take our next question from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Hi, sir. Yeah. Sir, you mentioned about in terms of reducing the pet coke share both in East and North, so roughly around 3% to 5% odd. But currently in Q4 what was the pet coke percentage and the AFR percentage in the fuel mix at the company level?
Jayakumar Krishnaswamy
Company level, our Q4 number fuel — all blended fuel was INR1.44 rupees per million cal — was 1.2 — yeah, I’m answering your question.
Shravan Shah
Yeah, sir, go ahead.
Jayakumar Krishnaswamy
Fuel cost for the company was INR1.44. Coal came at INR1.27. Pet coke came at INR1.84 and AFR was at INR0.9 that was the number which we had for last year.
Shravan Shah
And in terms of the fuel mix percentage share, pet cock share and AFR share in Q4 was how much because we were looking at even AFR also to increase to 13% to 15%
Jayakumar Krishnaswamy
Okay. Our coal percentage as a company was 53% with linkage 31% and non linkage 21%, which is domestic open market coal and then pet coke in Q4 was close to 37% and AFR was about 10% that’s the number we had in Q4.
Shravan Shah
And this AFR in Q1 can we see — will further go up to 13%, 15% that’s what we were looking at.
Jayakumar Krishnaswamy
FY27 our target is to get this AFR percentage as a company from 10% to 12%, 13% is what we will look at. That’s the number we are targeting to offset the coal price increase.
Shravan Shah
And sir, in terms of cost furthermore, let’s assume by the end of this month end election is over, state elections and if we further can see diesel price going up by INR10 odd which the central government has took excise hit. So how one can look at this INR10 let’s assume or 10%, 11% kind of increase, will it be a entire — 10% will be the direct increase in the freight cost or will it be a 60%, 70% and 30%, 40% is kind of a fix that’s way one can look at?
Jayakumar Krishnaswamy
No, I don’t think in this investors call I wouldn’t be able to give pricing strategy of the company and what are the minute steps how are we going to manage it. So I basically gave an overview because this is a strategy which we will work, other companies will work and I would refrain from giving what are all the detailed steps the company will take in the coming six to eight weeks to manage. I give an overarching picture of reducing pet coke quantity, increasing geo mix, improving our premium share and moving away from mineral gypsum to FGD. These are the big initiatives we will work on, but to kind of give a mathematical model if this goes up, this will be the price raise. I don’t think I would like to share such kind of information in this call.
Shravan Shah
Yeah. I got it, sir, but sir, just on a broader perspective whatever we have said till now INR8, INR12 kind of a trade hike and INR10, INR15, so roughly INR10, INR11 rupees kind of at a blended level price hike and given the obviously the pet coke cost will be if it stays as it is today, maybe July, August onwards we will have a hit. And let’s assume that then roughly we are still — and then the INR100 packing cost increase is there. So roughly still we are behind in terms of INR10 odd on the price hike — INR8, INR10 rupees still…
Jayakumar Krishnaswamy
I don’t think I will be answering this question because I cannot do a mathematical reconciliation and say that this much price increase, this much cost increase suddenly I will not able to tell. But that won’t be — that’s not going to be my approach of giving both the details. But all I can share with you is certainly costs have gone up which I shared with you in a transparent manner what has been the impact of bags and what has been the impact of fuel in March and March is all done now. So I guess April what will be the impact of bags on fuel? I guess certainly the blended cost of fuel, bags, gypsum, rest of all the stuff.
I am really looking at a cost inflation of close to INR200 per ton and hence at INR200 rupees ton with the kind of price increase net of GST, there is still going to be some gap. So our effort will be to work on the internal levers plus I guess an appropriate time when the, the year has started, I guess quarter ending schemes have ended in the market and then demand will pick up. Summer is coming with elections finishing and all the labor getting back to major markets from the post election scenario in key states, I think I foresee demand opening up to 7% to 8% going forward. That’s when I plan to catch the pricing trajectory.
Operator
Thank you. We’ll take our next question from the line of Tejas Pradhan from Citigroup. Please go ahead.
Tejas Pradhan
Yeah, hi, sir. Just on the balance sheet, if I look at historical trends, 4Q has been typically a quarter when we have unwind in terms of the debt reduction, right? But this quarter if I look at net debt it has gone up from INR42 billion to INR44 billion and in addition to that we also had the CCD issue at the Vadraj level, right? So if I adjust for that, then maybe that INR3 billion also in addition the debt would have gone up. So any reason why we had an increase in net debt in the quarter?
Jayakumar Krishnaswamy
Yeah. Let me ask Maneesh, our CFO, to address this very quickly. Maneesh?
Maneesh Agarwal
Yeah. So basically if you look at during the quarter, so first of all we had this CCD which has come in and we use the proceeds to pay off the commercial paper or in terms of the bridge plan that we had taken earlier for the purpose of this Vadraj acquisition. So that is there. Besides that in terms of — if you look at the overall net debt for the entire year, right, so I’ll just give you the whole waterfall for that. So if you look at that, we started the year with a INR3,640 crores and overall net debt we have ended with a INR4,445 crores. So there’s a INR900 crore increase that has happened. And this is primarily because of the Vadraj acquisition that has happened.
So overall investment value for the Vadraj, if you recall in the previous calls what we have talked about is INR1,800 crores. And on top of it, there is this INR200 crores that we had funded or made the investment for the BG (ph) acquisition. So altogether INR2,000 crores of investment has been done. And as against that we have a INR900 crores of CCD that has come in. So there’s INR1,100 crores of internal accruals or the borrowing that has gone into funding the entire acquisition. And from the operating cash flow, if you look at from INR1,880 crores of EBITDA that has been generated, there is an interest of around INR450 crore that has gone in. Besides that the working capital to fund the scale of operations from 19.4 million tons to 20.4 million tons.
So there is increase in the working capital besides the CapEx that has gone in across the plant, the sustaining CapEx, the normal CapEx that has gone in for the land mining as well as the CapEx that has gone for the Vadraj stuff. So that is how the overall INR1,880 crores of operating cash flow has been utilized. And then there is income tax payment that has gone in this financial year. So altogether if you look at from the operating cash flows, there is actually a INR300 crores of net debt that has reduced, right? But because of this Vadraj acquisition that has happened, so there is a increase that is coming on, on the balance sheet side the extent of INR900 crores.
Jayakumar Krishnaswamy
Let me just Maneesh finished it. Maneesh, thank you for explaining this. We started the year with INR3,640 crores of net debt. We ended the with INR4,445 crores of net debt. This INR3,640, you have to add close to INR200 crores of investments which you have made. It would have gone to INR5,640 crores. INR5,640 crores had 900 crores of CCD. So knockoff INR900 crores from INR5,640 crores. So it will come to INR4740 crores. Technically speaking, we had debt, we bought something, we did CCD. We should have ended the year with INR4740 crores, but we ended the year with INR4445 crores, good INR300 crores reduction in debt on a like to like comparison coming out of operational efficiency, prudent CapEx and cash flow generation.
So I guess whatever things which I have been talking on every call to kind of find a way to restrict CapEx, reduce working capital, manage cash flows to do a debt reduction and all the time we have been talking about when our debt reaches INR3,500 crores to INR4,000 we will make the next investment. So that is how we made the next.iTvestment the next investment took the debt up. Now the debt ranges at INR4445 crores. Technically on mathematical terms on a like to like comparison, it should have been INR4745 crores, but wonderful the work done by the teams brought the number to INR4445 crores.
Tejas Pradhan
Sure. Okay. Just to sort of clarify the question also just on a quarter-on-quarter basis if I look at at least the last four, five years generally 3Q end versus March there has been like a INR4 billion to INR5 billion quarter-on-quarter reduction in net debt versus that this quarter there is a INR2 billion increase. So anything specific in this quarter. I understand the full year. So that explanation I understood. Just on a quarter-on-quarter anything particular to flag off because of which the debt increased?
Jayakumar Krishnaswamy
Our net debt December stood at INR4817 crores and again that INR4817 crores we are at INR4445 crores. So there again I think there is a —
Maneesh Agarwal
So the point that you’re making is the net debt has gone down slightly higher this time as some of the previous quarters — previous years?
Tejas Pradhan
Okay. So my number was INR4,217 crore I mean correct me if I am wrong…
Maneesh Agarwal
That’s not the right number. The number is INR4817 crores.
Tejas Pradhan
Okay, understood, sir. I’ll take it offline, not an issue. Just on the other data question that I had was the clinker production in full year FY26 and the lead distance for the fourth quarter, just these two.
Jayakumar Krishnaswamy
We don’t clock clinker production only company. We report cement production. As regards the lead distance reduction, Q4 to Q3 no substantial reduction in lead distance. We are at 325 just about 1 kilometer less 325 km largely coming due to our — as I explained little while ago to Satydeep’s question. We had challenges in clinker moments. So we had to kind of do little bit of trade off of how can I move clinker to the right places because rake availability was not there everywhere. And second also is the fact that we had to — what do you call packing bag was also challenge in certain places. And [Indecipherable] factories which was different. Each was different. So we couldn’t do too much of impact on the lead distance reduction. It remained at 325.
Tejas Pradhan
Sure. Thanks. That’s all.
Operator
Thank you. Next question is from the line of Gaurav Goel from UTI AMC. Please go ahead.
Gaurav Goel
Hi. Thank you for the opportunity. Just one quick question. So if you could give the debt…
Jayakumar Krishnaswamy
Can you speak on the handset, please? You’re very, very feeble.
Gaurav Goel
Am I audible?
Jayakumar Krishnaswamy
Yeah. At this level, you’re audible.
Gaurav Goel
Yeah. Thank you. So just one quick question. If you could give a guidance on the debt and CapEx for FY27?
Jayakumar Krishnaswamy
Okay. So on the CapEx, I would give a guidance every quarter we’ve been talking about CapEx. So in FY26, the year gone by I have given a outlook of INR700 crores for CapEx, we ended with INR712 crores, a small INR10 crore increase. So more or less exactly the same way which we planned for the year. ’27 and ’28 will be INR900 crores for ’27 and INR960 crores for ’28. That’s all largely coming out of Vadraj refurbishment INR627 crores and INR728 crores. Overall next two years INR900 crores in FY27, INR960 crores in FY28. As regards the debt level number, I guess there is going to be a period of few quarters where this debt is going to be around this number because we have borrowed and invested in Vadraj. However, our goal has been to maintain that debt level to 2 to 2.5 times EBITDA and there we will meet our numbers during the fiscal FY27.
Gaurav Goel
All right. Thank you so much.
Operator
Thank you. Next question is from the line of Girija Ray from Nirmal Bang. Please go ahead.
Girija Ray
Hi, thanks for taking my question. So one confusion like if I go back to 2022 to September post COVID again there is a spike in pet coke. Even though after COVID, the market opens and everything the infra also started booming. So we were not able — the industry was struggling to pass in this input cost to the consumers. So even this normal course of situation when infra is doing well and the things are getting in a good phase. So seeing this cost increase like pet coke prices and packaging cost.
So how do you see the kind of price hike will take which can be passed into the consumers post GST rate cut? Even if I remember post no the GST rate cut given a headroom of INR35 to INR37 for bag of increase. So so far we have increased around INR10 to INR12 on a blended basis. So even in September 22, most of the pockets they have taken a price hike of INR50 to INR70. Still it was not adequate enough to pass on to the consumer. The profitability was impacting that time. So how do you see this can be — what kind of price hike we can take and how this will be feasible to pass onto the consumers?
Jayakumar Krishnaswamy
If we look at four year window, so I guess I’ll little bit jog from my memory and talk about September ’22. It’s pretty far away, but all I can say is at that time pet coke was trending nearly close to about $250 per ton. And then the rupees per million cal was also pretty high at that time. It took a good six to eight months for the prices to taper down. But this time around if you see pet coke is currently trending at INR2.04 per million cal. And at this kind of levels, the price hike which we have taken just about meets the cost inflation. So whatever currently we have taken is just about meets the current kind of price cost inflation which has happened. So it’s kind of a neutral ground as we speak. But any further increase in cost I guess we will go for additional price increase. I will not be able to comment right now whether it will be INR10 per bag or INR15 per bag. God forbid the cost doesn’t go so much.
So we’ll be mindful as responsible company, but certainly I think eventually when the overall cost lines go up, I think it will have an impact on the overall economy of the country. So we will go by as the situation unfolds. What is in our control is to tweak the fuel mix share, tweak the model mix, tweak the geo mix, bring about efficiencies and that’s where our immediate focus entire team is working on to squeeze out some of the money so that the cost increase can be obviated by the efficiency improvement within the company. Beyond that, we will have to take a price increase. I hope this situation doesn’t happen there where we have to take big time increases. But I don’t rule out any situation where we will not take price increase. I won’t say we will take, but certainly I will give a different way I will answer your question. I am not ruling out any price increase going forward.
Girija Ray
Okay. My last question will be now there is some kind of decline from past three quarters. I can see the employee cost per ton has declined. So that is one and second one is related to our capacity utilization. It is very good to see that we have reached a very significant capacity utilization in fourth quarter. So is there anything like we are trying to capture the market or gain the market share breaking the pricing power? These two questions. These will be my last questions.
Jayakumar Krishnaswamy
Certainly, I think we will not drop price to increase market share. So I think our focus is profitability. Nuvoco, we’ll have to find as a company we do a good balancing act between ensuring profitability and also get growth. So we will not kind of buy growth by throwing money. So that’s not in the DNA of the organization. We will work very hard to get the profitability right. But certainly, I think we’ll run behind growth, but certainly not throw money to get growth. That’s the DNA of the organization. That is how we have been running our company for last many years. And that’s the way we look at things going forward.
As regards the overall employee benefits per ton, I guess scale also comes to picture. If you see our overall absolute volume growth in FY24 and ’25 was 18.8 and 19.4. Two years we were stuck at 18.8. Another year we went only to 19.4. This was the year where I think the market also improved. We also kind of improved to what do you call 20.4. That’s where I guess the volume scale benefit also comes to use — comes to our cost per ton impact.
Girija Ray
Thank you, sir. All the best. Thank you, sir.
Operator
Thank you. We’ll take our next question from the line of Pinakin from HSBC. Please go ahead.
Pinakin Parekh
Yeah. Thank you very much, sir. Sir, my first question is related to demand. So in your view what was the industry growth in F26? And given in April there has been so much disruption that we are hearing about, how is demand trending in April? Is it flat or has it started declining on a year basis?
Jayakumar Krishnaswamy
Looking at what’s the demand, there’s been — I guess if you really recall our quarter two, I think we did not have aggressive volume growth whereas quarter three and quarter four, I guess we did grow. Industry we are looking at volume growth in FY26 or ’25 anywhere between 6% to 9%. So that’s the outlook for the last. I think that’s my read of how the overall market, but again India is north, south, east, west, central. So various markets have got various growth rates. At an all India level, industry has grown by 6% to 9%. But certain markets like east or even Gujarat for many months during the year or Maharashtra for many months during the year growth was tepid less than the national average. But however, as in our opening speech, we mentioned about the infrastructure improvement and the investment government is going to make. I’m still looking positive for this industry to grow anywhere between 7% to 9% in the coming year as well.
Pinakin Parekh
Sure, sir. And related to that how is demand shaped up in April so far given whatever disruptions we have seen?
Jayakumar Krishnaswamy
Okay. First week anyway, April typically our first week is also always a challenging week with the March annual targets for all the dealers across the staff. But as we speak, I can overall I can basically say there is — there are few markets where we don’t operate all over India. But certainly, in the markets where we operate north, east and west and some parts of central, I think there are pockets in India currently where there our demand is likely weak. So I’m not going to kind of list on which states there are demand is weak. But in our four states of Bihar, Bengal, Jharkhand, Chhattisgarh there is good demand. And in terms of the first 13, 14 days of the month our pro rata is as per our plan.
Pinakin Parekh
[Indecipherable]
Operator
Pinakin, your voice is muffled. Can you repeat your question, please?
Pinakin Parekh
Yeah. So for FY27 you mentioned demand growth at industry level of 7% to 9%. So at a Nuvoco level it’s very early days. But what is the target that you are working with? Because FY26 was 5%. Should we see a pickup in volume sales in F27?
Jayakumar Krishnaswamy
You want what I tell my employees or you want what is likely to happen? So certainly I think we will certainly want to grow in line with industry of 7% to 9% for sure in the market. But practically if you see markets in north, we are kind of operating at 95% capacity utilization. So there I think once our Vadraj comes in there is going to be few months in the coming year where we’ll be short of cement in North. But that’s a pumping phenomenon. That’s part of the stuff. But I still — I have adequate capacity needs. I still have more cement available in east. So we are targeting to grow anywhere between 7% to 9% in line with industry in the coming year as well.
Pinakin Parekh
Got it. Thank you very much.
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, Yashashree. Thank you everyone for the question and engagement today. We trust the discussions have been both informative and useful. The IR team remains available for any follow-up clarification you may need after the call. As we close, let me leave you with a few thoughts on where Nuvoco stands and where we are headed. Our growth agenda is firmly on track. The Vadraj Cement project is progressing as planned with phased commissioning beginning Q3 ’27 further strengthening our presence across the western and northern markets. Beyond capacity, our strategic priorities remain clear and consistent. Premiumization, geographic optimization and cost discipline, these are not just aspirations as they are disciplines we have demonstrated quarter after quarter and they will continue to drive long-term shareholder value creation. Thank you for your continued support and trust. We look forward to speaking to you again next quarter. Thank you very much.
Operator
[Operator Closing Remarks]