Shares of Nuvoco Vistas extended gains for a second straight session on Wednesday after the company reported higher first-quarter earnings and global brokerages Jefferies and HSBC reaffirmed their positive view on the stock while raising target prices.
The stock rose about 8% in early trade after advancing 7.6% in the previous session. It traded at Rs 369 at around 9:30 a.m. on the NSE, up Rs 27.6 from its previous close of Rs 341.4.
The rally followed the company's June-quarter results, which showed growth in profit, revenue and EBITDA. The earnings prompted Jefferies and HSBC to retain their "Buy" ratings and increase their target prices, adding to investor interest in the stock.
Jefferies, HSBC Raise Target Prices
Jefferies raised its target price on Nuvoco Vistas to Rs 430, implying an upside of about 26% from Tuesday's closing price. HSBC increased its target price to Rs 475, indicating a potential upside of around 39%. Both brokerages maintained their "Buy" recommendations.
Jefferies said stronger pricing and execution helped the company deliver earnings ahead of expectations.
"The company navigated cost headwinds through a sharp reduction in petcoke mix/better procurement, while execution in a challenging macro exceeded expectations," Jefferies said.
The brokerage added that EBITDA could soften in the second quarter because of seasonal factors and the delayed effect of cost inflation. It said the commissioning and ramp-up of the acquired Vadraj asset would remain a key factor to watch.
HSBC said the company reported EBITDA above its expectations, supported by better pricing.
"While the second quarter is seasonally weak, demand, pricing and the overall cost environment for the cement sector are expected to improve in the second half of FY27," HSBC said.
ALSO READ: Nuvoco Vistas Shares Jump 12% After Q1 Profit Rises 20%, Revenue Grows 9%
Q1 Performance
Nuvoco Vistas reported a 20% year-on-year increase in net profit to Rs 160 crore for the April-June quarter. Revenue from operations rose 8.9% to Rs 3,129 crore.
EBITDA increased 9.6% year on year to Rs 568 crore, while EBITDA margin remained unchanged at 18.2%.
Stock Performance
The stock has gained more than 18% over the past month, compared with a 1.84% rise in the Nifty 500 index.
Over the past week, the shares have advanced 19.76%, including gains recorded since Tuesday.
During the past 52 weeks, the stock has traded between Rs 276.25 and Rs 477.5.
As of July 14, Nuvoco Vistas traded at a price-to-earnings ratio of 31.57, with a market capitalisation of Rs 13,227.28 crore.
ALSO READ: Nuvoco Vistas Q1 Review: Brokerages Stay Bullish On Double-Digit Growth — Check Target Price
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