Accumulate Nuvoco Vistas Corporation; target of Rs 372 Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Nuvoco Vistas Corporation with a target price of Rs 372 in its research report dated October 24, 2024.

Broker Research

October 28, 2024 / 14:56 IST

Accumulate

26 Aug, 2025 12:21

Volume

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Prabhudas Lilladher's research report on Nuvoco Vistas Corporation

Nuvoco Vistas (NUVOCO) reported weak operating performance in Q2FY25 on sharp 6% YoY decline in volumes due to weak demand in the monsoon quarter. Average NSR declined 2.6% QoQ on weak cement pricing in eastern markets. EBITDA/t declined 30% YoY due to lower operating leverage. Mgmt expects domestic cement demand to improve gradually post festivities, once GoI projects get funding and demand starts rolling in across states. Cost optimization measures such as railway sidings and usage of WHRS are expected to improve EBITDA/t by Rs75 in the near term. Current debt level of the company hinders the growth plan, which we expect would result in market share loss in the medium term. Key things to watch out for: a) spending on infrastructure projects and housing in eastern states, b) stability of pricing amidst rising capacities in the East, and c) early repayment of debt, which is hindering capex plans.

Outlook

We cut FY25/26/27 EBITDA estimates by 4%/0%/2% on lower volume assumption and expect EBITDA to grow ~7% CAGR over FY24-27E. The stock is trading at EV of 7.8x/7.1x FY26E/FY27E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs372 (earlier Rs386) valuing at 8x EV of Sep’26E EBITDA.

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