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Nirmal Bang Report
Nuvoco Visats Corporation Ltd.'s overall revenue came in line with our estimate (actual/estimated: Rs 25,730 million/Rs 25,098 million) with marginal variations in volume (actual/estimated: 4.50 metric tonne/4.47 metric tonne) and realisation/tonne (actual/estimated: Rs 5,718/Rs 5,609) by 0.6% and 1.9%, respectively.
Nuvoco Visats completed planned expansions in Risda and Nimbol (clinker capacity enhanced to 12,000 tonnes per day and 6,000 tpd, respectively). 1.2 million tonnes per annum cement expansion is scheduled to come on stream in Q3 FY24, which will take the company's cement capacity to 25 million metric tonne.
After reducing its net debt to less than Rs 40 billion, it will engage in expansions. It has future brownfield expansion ambitions in Rajasthan and greenfield in Gulbarga - Karnataka.
We maintain our Ebitda estimates, target price and 'Buy' rating on the stock. We assign eight times enterprise value/Ebitda on September 2025E to arrive at a target price of Rs 414, a 22% upside from the current market price.
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