Target: ₹459
CMP: ₹411.55
Nuvoco Vistas (NUVOCO) reported inline operating performance in Q2FY26, led by 1 per cent increase in blended NSR. Volume grew just 2.4 per cent y-o-y due to intense monsoon across the key markets. Pure cement average realisation declined just 0.2 per cent q-o-q, on higher premium product share (44 per cent from 41 per cent in Q1); despite about 4 per cent average price decline seen in the Eastern region as per our channel checks.
Operating costs declined due to lower RM costs which declined led by long-term contract for slag and optimised fuel mix also aided in that. This led to EBITDA/t increasing by 64 per cent y-o-y to ₹853 (PLe ₹846). The management will continue its efforts to reduce operating costs by ₹50/t in FY26 led by higher WHRS, higher AFR and lower lead distance aided by new railway sidings.
Nuvoco is transitioning from a consolidation phase into a growth phase, having completed the Vadraj acquisition and guided a targeted about 4mtpa eastern expansion through equipment upgrades, process modifications, and debottlenecking, which will take total capacity to around 35 mtpa by end FY27.
Overall, Nuvoco offers a turnaround expansion story with improving financial metrics, scalable capacity, and operating leverage that could drive strong earnings recovery over the next two years. However, timely execution remains the key. We maintain ‘Accumulate’ with revised TP of ₹459 (earlier ₹464).
Published on October 17, 2025
