Q3 Results Review Nuvoco Vistas Corporation Ltd and Rate Expectation

Nuvoco Vista Corporation Ltd (NVCL), is one of the largest cement companies and concrete manufacturers in India with a consolidated capacity of 22.32 MMTPA. It offers a diversified range of products such as cement, Ready-mix Concrete (RMX), and modern building materials i.e. adhesives, wall putty, dry plaster, cover blocks, and more. • Nuvoco’s Q3FY25 EBITDA came in much lower than our estimates. • Volumes growth in Q3FY25 appear to have come at the expense of realizations. • Nuvoco’s bid to acquire Vadraj Cement would add to regional diversification. • We estimate EBITDA/ton of Rs660/771/838 in FY25E/26/27E vs Rs551 in Q3FY25. • Stock trades at an inexpensive US$79 EV/ton FY26E; lacks near-term growth triggers. • We revise FV to Rs350 on FY27E, valuing at 8X EV/EBITDA; downgrade to REDUCE. Q3FY25 Earnings update: Positives: • Volumes grew 16% yoy (+12% qoq) led by strong growth in the key eastern states. • Costs fell 6% qoq (-7.8% yoy), led by lower RM-energy costs (-10.1% yoy, -9.7% qoq). • Seasonal tailwinds to lift margins in near term. Negatives: • Realizations declined 4.9% qoq (-14.3% yoy). • EBITDA of Rs551/ton was lower-than-anticipated (-46% yoy, our estimate: Rs748/ton). • We expect leverage to remain elevated over FY25-27E.