Nuvoco Vistas Corporation delivered a resilient performance in Q2 FY27, recording 14% revenue growth and a 9% rise in volumes. The company successfully commissioned its 2 million-ton Surat grinding unit and entered a green energy deal with CleanMax. Despite a rise in net debt to Rs 5,000 crore due to front-loaded capex and inventory building, management expects better cash flow in H2. Investors should track input cost management and the integration of new logistics assets.
Nuvoco Vistas Reports Strong Q2 Growth and Capacity Expansion
Revenue grew 14% YoY, while sales volume increased 9% during the same period.
Reader Takeaway: Operational expansion in Surat and renewables boost long-term potential, while rising petcoke costs remain a near-term margin headwind.
What just happened
Nuvoco Vistas Corporation has posted resilient growth for Q2 FY27, marked by a 14% increase in revenue and an 11% rise in EBITDA. A major highlight of the quarter was the commissioning of the 2 million-ton grinding unit in Surat, which is expected to hit full annualized capacity by Q4. The company has also prioritized sustainability by signing a pact with CleanMax for a 46.4 MW wind-solar hybrid project in Rajasthan to lower energy costs.
Why this matters
For shareholders, the performance indicates successful execution of growth plans despite macroeconomic hurdles. Premium products now account for a record 45% of the sales mix, aiding profitability. The shift toward sea-route clinker logistics via the upcoming Kutch project is expected to structurally reduce transport costs, which have historically pressured margins.
The backstory
The company is currently in an active expansion phase with a total FY27 capex target of Rs 1,200 crore. Of this, Rs 780 crore was deployed in H1. This spending, combined with strategic petcoke inventory building, has pushed net debt to Rs 5,000 crore. Management expects this to normalize as new assets contribute to earnings and working capital is released in the second half of the fiscal year.
Risks to watch
Input cost volatility is the primary concern, with energy costs per million kcal rising from Rs 1.52 in Q1 to Rs 1.59 in Q2. Management projects this could reach Rs 1.80 in Q3. While petcoke supplies are hedged through February and price hikes of Rs 20/ton have been implemented, the company's ability to maintain margins depends on sustaining these pricing actions in a competitive market.
What to track next
Investors should monitor the operational stabilization of the Surat plant and the phased rollout of the Kutch jetty project in Q3. Furthermore, management aims to keep the net debt-to-EBITDA ratio under 2x in the medium term, providing a key benchmark for financial health as the company integrates these new assets.