Cement stocks are in focus as pricing trends and demand visibility begin to improve. The brokerage house Nomura, in its latest report, has turned positive on Nuvoco Vistas Corporation.
According to the brokerage report, the stock could see as much as 53% upside from the current levels, with a target price of Rs 470.
Let’s take a look at the key reasons why the brokerage house is bullish on this stock –
Earnings beat driven by better pricing
One of the key triggers, according to Nomura, is the company’s stronger-than-expected March quarter performance.
“Q4FY26 EBITDA of Rs 590 crore beat our /Bloomberg consensus estimates by 13%/ 5%,” added the brokerage house report.
Furthermore, the brokerage house report added, “The beat was largely driven by better realizations. As a result, Nuvoco recorded unitary EBITDA of Rs 979/trillion, coming in 12% above our estimate.”
This means that the company earned more per tonne of cement sold than expected.
According to the brokerage report, even though volumes remained broadly steady, pricing gains played a crucial role in boosting overall profitability.
Demand holds steady, cost pressures remain manageable
The second factor supporting the investment case is stable demand trends. Nomura pointed out that, the company’s core grey cement business continues to see gradual growth. “Grey cement volumes increased 5% y-y to 6.0MT and were largely in line with our estimate,” they added.
The brokerage also pointed to regional strength as a key contributor to pricing improvement.
“Blended realisation improved 2% q-q and was 1% above our estimate, largely on account of exposure to improving pricing in the eastern market, in our view,” the brokerage report noted
However, the report also flags near-term risks from rising input costs. Raw material plus power and fuel (RM+P&F) costs have inched up due to higher prices of imported pet coke, which is used as fuel in cement manufacturing.
“Amid the recent uptick in imported pet coke prices, Nuvoco’s Q4 RM+P&F cost/t increased by 3% q-q and came in 1% above our estimate,” Nomura report noted.
According to the brokerage report, cost trends will remain an important factor to watch in the coming quarters.
Expansion plans indicate long-term growth intent
The third key reason behind the bullish stance is the company’s ongoing expansion strategy. According to the brokerage report, Nuvoco is strengthening its distribution network to capture future demand. The house added, “The Board has approved setting up a 1.5MTPA bulk cement terminal at Viramgam, Sachana, Gujarat, with a dedicated railway siding.”
This terminal is expected to act as a logistics hub, improving the company’s ability to supply cement efficiently across Gujarat. The project is targeted for commissioning by FY28 (FY28E).
Nomura highlighted that such investments are aimed at improving reach and supporting volume growth over the long term. While the company’s consolidated net debt stood at Rs 4,440 crore after recent acquisitions, the focus remains on scaling operations.
What investors need to know
According to the brokerage report, the near-term outlook may see some pressure due to rising fuel and packaging costs amid global uncertainties.
“We maintain our ‘Buy’ rating and target price of Rs 470. The stock currently trades at an EV/EBITDA multiple of 8.1,” Nomura added.
Disclaimer: Investment in Nuvoco Vistas involves market risks and specific price targets as outlined in this brokerage analysis. Readers should treat these projections as informational and consult a SEBI-registered investment advisor before making any buy or sell decisions. This report does not constitute a formal offer or solicitation.
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