22 Nov , 2021 By : monika singh
ICICI Securities has buy call on Nuvoco Vistas Corporation with a target price of Rs 645. The current market price of Nuvoco Vistas Corporation Ltd. is Rs 527.65.
Time period given by analyst is one year when Nuvoco Vistas Corporation Ltd. price can reach defined target.
Nuvoco Vistas Corporation Ltd., incorporated in the year 1999, is a Small Cap company (having a market cap of Rs 18848.92 Crore) operating in General sector.
Nuvoco Vistas Corporation Ltd. key Products/Revenue Segments include Cement, Other Operating Revenue and Scrap for the year ending 31-Mar-2020.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 2026.72 Crore, down -8.23 % from last quarter Total Income of Rs 2208.56 Crore and up 13.03 % from last year same quarter Total Income of Rs 1793.14 Crore. Company reported net profit after tax of Rs -25.77 Crore in latest quarter.
Investment Rationale
Nuvoco Vistas Corporation (NUVOCO), led by Dr. Karsanbhai Patel Nirma group, has emerged as the fifth largest cement group in India and is amongst top-3 in East region with 23.8mnte capacity (as of Sep’21), post 8.3mnte acquisition of NU Vista (earlier Emami Cement) in Jul’20. The brokerage believes cost synergies from the said acquisition, improved cost efficiencies, higher premiumisation coupled with scale benefits and operating leverage may drive ~30% (Rs265/te) blended EBITDA/te rise to Rs1,180/te over FY21-FY24E. Valuation at 8.6xFY24E EV/E or US$125/te adequately factors concerns around higher East region concentration, higher leverage and lower profitability vs peers. As NUVOCO narrows its EBITDA/te gap vs peers, valuation gap may shrink. It initiates coverage on the stock with a BUY rating and target price of Rs645/share (11x Sep’23E EV/E). Key risks: lower demand / prices, and high concentration (~70%) in East region.
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