Hold Nuvoco Vistas Corporation: target of Rs 360: ICICI Securities

ICICI Securities research report on Nuvoco Vistas Corporation

Q4FY25 turned out to be a dream quarter for Nuvoco Vistas Corp (Nuvoco) with: 1) an all-time high EBITDA (up 12% YoY), being 24% ahead of our estimate (driven by beat across realisation and cost); and 2) net debt retreated further to INR 36.4bn (down INR 4bn YoY). The underlying improvement in cement prices (endorsed by Nuvoco in the earnings call) evinces scope for margins ascending further. However, our FY26E EBITDA/t (of INR 913 vs. INR 963/INR 707 for Q4FY25/FY25) largely captures the potential gains.

Outlook

Keeping up the optimism, we introduce FY27E EBITDA/t of INR 938. Yet, we retain HOLD (rolling over valuations to FY27E) with a revised TP of INR 360 (INR 369 earlier), owing to persisting leverage concerns, amplified further by recent acquisition of Vadraj Cement. While Nuvoco has hinted at a potential CCPS issuance of the new subsidiary (to raise INR 12bn), pending clarity over its terms and conditions, we view it as quasi-debt.