Nuvoco looks beyond East with Gujarat expansion

“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.

He, however, said entering South India is not part of the company’s plans for the next five years. The decision is largely driven by the availability of limestone, a key raw material for cement production. “If you don't have limestone mines, you cannot go into a region. You have to only do the acquisition mode,” Krishnaswamy said.

Instead, Nuvoco plans to expand its existing limestone-backed footprint. It has adequate limestone reserves in Rajasthan and also has deposits in Gulbarga, Karnataka, which could help it 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,” Krishnaswamy said.

Diversification strategy

The diversification plans came even as Nuvoco reported better-than-expected results and saw a 9% jump in revenue for the June quarter to ₹3,129 crore and 19% jump in net income to ₹158 crore as strong cement prices helped offset cost pressures rising due to the West Asia war.

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 Nuvoco’s broader effort to reduce its dependence on eastern India—estimated to account for about 75-80% of its capacity—where any slowdown can have an outsized impact on its performance, 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,” he said.

Nuvoco is also 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.

“We are waiting for such a thing to happen to buy limestone mines at the right price and not pay a premium, which will impact the business for many decades,” he said.

Industry pecking order

Nuvoco’s expansion is unlikely to immediately translate into a sharp rise in its overall industry ranking. 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 in the country remains substantial, with companies across the top five continuing to expand capacity. As a result, moving up several positions in the industry rankings within a few years would require significant capital expenditure and could be difficult even for companies with ambitious expansion plans.

“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 has a concentrated structure with the top four companies, including UltraTech Cement, Adani Cement, Shree Cement and Dalmia Bharat, accounting for a 60% share of the industry's annual production capacity of about 700 million tonnes, and the top nine holding 81%, according to brokerage Systematix Institutional Equities.

Since 1 April 2025, UltraTech Cement and Ambuja Cements (Adani Cement) have each delivered returns of around 9%, while Shree Cement has gained 15%, Dalmia Bharat nearly 3%, and Nuvoco 24%, compared with a roughly 9% return for the benchmark Nifty 50.

While the war in West Asia has raised concerns about fuel and packaging costs, Nuvoco is confident it can take on the challenge and reduce its reliance on petcoke, which is used in cement kilns as fuel, the managing director said.

The company has already reduced its petcoke usage from around 38% to about 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%.

Nuvoco first set up a two-million-tonne greenfield cement plant in Rajasthan in 2014, spearheaded by Hiren Patel, son of Nirma Group founder Karsanbhai Patel.