Accumulate Nuvoco Vistas Corporation; target of Rs 459: Prabhudas Lilladher

Prabhudas Lilladher's research report on Nuvoco Vistas Corporation

Nuvoco Vistas (NUVOCO) reported inline operating performance in Q2FY26, led by 1% increase in blended NSR. Volume grew just 2.4% YoY due to intense monsoon across the key markets. Pure cement average realization declined just 0.2% QoQ, on higher premium product share (44% from 41% in Q1); despite ~4% average price decline seen in the Eastern region as per our channel checks. Operating costs declined due to lower RM costs which declined led by longterm contract for slag and optimized fuel mix also aided in that. This led to EBITDA/t increasing by 64% YoY to Rs853 (PLe Rs846). The management will continue its efforts to reduce operating costs by Rs50/t in FY26 led by higher WHRS, higher AFR and lower lead distance aided by new railway sidings.

Outlook

We cut our EBITDA estimates by 1% on flat pricing assumptions in H2 and expect it to deliver EBITDA CAGR of 20% over FY25-28E. The stock is trading at EV of 9.3x/7.4x FY27E/FY28E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs459 (earlier Rs464) valuing at 9x EV of Sep’27E EBITDA.