Nuvoco Vista has the highest premium product contribution in the industry at 41%, as its products, Concreto and Duraguard gain traction, resultantly improving realisations and margins. Management expects Ebitda/tonne to improve by Rs 60-80 FY26 onwards, driven by cost rationalization and better product mix.
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Systematix Report
The buoyant industry landscape is fueled by strong demand, supported by government's continued emphasis on housing and infrastructure. Nuvoco Vista Corporation Ltd.'s strong capacity expansion and strengthening presence in India's western and eastern regions, operating efficiency and expected price hikes should boost its earnings.
Higher leverage is the reason why the company gets lower multiple vs peers. We expect this gap to narrow once free cash flow starts improving sharply FY28 onwards.
We value Nuvoco Vista at an EV/Ebitda of 10 times FY27E and arrive at a target price of Rs 540. Initiate coverage with a Buy.
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