Broker’s call: Nuvoco Vistas (Hold)

Target: ₹386

CMP: ₹353.45

Nuvoco Vistas has announced its Q3FY25 results, reporting another substantial loss, despite the growth in sales.

Q3FY25 consolidated revenues at ₹2,409.40 crore, (vs our est. ₹2,380.70 crore), was down 0.5 per cent y-o-y but up 6.2 per cent q-o-q. Consolidated EBITDA for Q3FY25 was reported at ₹258.20 crore, (vs est. ₹301.50 crore), down 37.1 per cent y-o-y and up 18.1 per cent q-o-q. EBITDA/t for Q3 came at ₹549 (vs est. ₹701), down 46.2 per cent y-o-y and up 5.5 per cent q-o-q. PAT for Q3FY25 reported a loss of ₹61.30 crore, (vs est. ₹3.2 crore), vs 31 crore profit recorded in Q3-FY24.

Nuvoco has successfully secured the insolvency resolution application for the acquisition of Vadraj Cement. We anticipate that the company will need to raise funds to complete this acquisition, as it aims to maintain its net debt below ₹4,000 crore, compared to the current level of ₹4,350 crore.

We revise our FY26/27 EPS estimates by -9.9/19 per cent and maintain the rating to ‘Hold’ with a revised TP of ₹386. The management is optimistic about cement volume growth, forecasting a 10 per cent increase in FY26. Alongside this volume growth, cement prices are expected to continue upward trend, with further price hikes anticipated in the coming months.