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Nuvoco Targets Gujarat as East Dependence Fades

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Nuvoco Targets Gujarat as East Dependence Fades

2026-07-20 06:49 UTCBy AlphaScala Research DeskSource reporting: livemint.comEditorial standards

Nuvoco Targets Gujarat as East Dependence Fades

Nuvoco Vistas posted a 19% jump in net income to ₹158 crore. The company aims to reach 5 million tonnes of Gujarat sales by 2030, reducing east India dependence.

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Nuvoco Vistas Corp. Ltd posted better-than-expected June-quarter results, with revenue up 9% to ₹3,129 crore and net income jumping 19% to ₹158 crore. The cement maker used the strong print to detail a regional diversification that is shifting the company's center of gravity away from eastern India, where 75-80% of its capacity sits.

Managing director Jayakumar Krishnaswamy said the company now sells about 1.5 million tonnes of cement annually in Gujarat, a state where it had no manufacturing presence until its recent acquisition of Vadraj Cement. That figure is expected to reach a two-million-tonne annualized sales rate by the end of the current fiscal year, with roughly one million tonnes added each year after that, pushing Gujarat sales to five million tonnes by 2030.

“With the state’s cement market expected to grow from about 32 million tonnes currently to nearly 40 million tonnes by 2030, Nuvoco would have a market share of about 12% and could become the third-largest player in the state,” Krishnaswamy said.

South India, however, is not part of the company’s plans for the next five years. The decision is driven largely by the availability of limestone, a key raw material. “If you don't have limestone mines, you cannot go into a region. You have to only do the acquisition mode,” Krishnaswamy said. Nuvoco has adequate limestone reserves in Rajasthan and deposits in Gulbarga, Karnataka, which could serve markets in Maharashtra, including Pune and Nashik.

“Over the next five years, our aim is to, after Vadraj, either do a greenfield or brownfield expansion in Rajasthan or set up a plant in Gulbarga to service the Maharashtra market,” he said.

Nuvoco is also setting up a bulk cement unit near Viramgam, about 40 kilometres from Ahmedabad, to serve the Kutch, Ahmedabad and Surat markets. The facilities are expected to become operational in phases over the next year.

The expansion is part of a broader effort to reduce the company’s dependence on eastern India, where any slowdown can have an outsized impact, Krishnaswamy said. “Hence, we went and invested in the North. Now we've invested in the West. We want to be a company which is in the north, west, central, and the east, so that we have broad-based growth across the regions.”

Nuvoco is waiting for more limestone deposits to come up for auction before expanding further into central India. Krishnaswamy said the company would avoid paying excessive premiums for limestone mines because high acquisition costs and royalties could affect the economics of a project for decades.

The company expects to reach 35 million tonnes of capacity by FY28 and aims to sell about 30 million tonnes over the following three to four years, implying capacity utilization of around 80%. Krishnaswamy said the gap between the largest cement makers remains substantial, and moving up several positions in the industry rankings would require significant capital expenditure. “The gaps between everybody are kind of big enough, and it will not be possible for four to three, three to two, two to one,” he said.

India's cement market is concentrated: the top four companies – UltraTech Cement, Adani Cement, Shree Cement and Dalmia Bharat – hold a 60% share of annual production capacity of about 700 million tonnes, according to brokerage Systematix Institutional Equities. Since 1 April 2025, Nuvoco has delivered a 24% return, outpacing UltraTech and Ambuja Cements (both up about 9%), Shree Cement (up 15%), and Dalmia Bharat (up nearly 3%). The benchmark Nifty 50 returned roughly 9% over the same period.

On costs, Krishnaswamy said the company is confident it can manage the impact of the West Asia war on fuel and packaging costs. Nuvoco has reduced its petcoke usage from about 38% to roughly 27%. In the East, a couple of plants have brought petcoke usage down to zero, while another is operating at less than 25%. In the North, petcoke usage has declined from a high of 55% to around 40%.