Nuvoco Vistas Q3 Results Review - Volume De-Growth A Concern; Downgrade To Accumulate: Dolat Capital

Dolat Capital Report

Nuvoco Vistas Corporation Ltd.'s revenue, volume in line, however realisation, Ebitda, Ebitda/tonne and adjusted profit after tax above estimates.

Nuvoco Vistas posted -7% YoY/ -5.9% QoQ revenue to Rs 24.2 billion due to -10.7%/ - 10.1% YoY/ QoQ decline in volume to 4.0 million tonne, which was partially offset by +3.4%/ +4.2% YoY/ QoQ increase in realization/tn to Rs 5,428.

Ebitda +53.0%/ +24.4% YoY/ QoQ to Rs 4.1 billion. Adjusted profit after tax sharply increased YoY to Rs 310 million in Q3 FY24 versus Rs 756 billion net loss in Q3 FY23.

We expect 6.2%/ 20.2% revenue/ Ebitda compound annual growth rate over FY23-26E led by -2.5%/ 10.1%/ 7.5% volume growth and 2.6%/ 0.9% (lower versus H2 FY24)/ 0% cement realisation growth in FY24E/ FY25E/ FY26E.

However, we expect significant improvement in APAT to Rs 5.3 billion in FY26E versus Rs 479 million net loss in FY23.

We decrease our Ebitda estimates for FY24E/ FY25E/ FY26E by 8.8%/ 7.6%/ 5% factoring lower volumes.

We downgrade from 'Buy' to Accumulate with a revised target price of Rs 403 based on eight times consolidated FY26E enterprise value/Ebitda.

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