Citi upgrades Nuvoco Vistas stock rating to Buy on strong EBITDA growth

Published 21/07/2025, 05:52
Citi upgrades Nuvoco Vistas stock rating to Buy on strong EBITDA growth

Investing.com - Citi has upgraded Nuvoco Vistas (NSE:NUVO) Corp Ltd (NS:NUVOCO) from Sell to Buy and raised its price target to INR475.00 from INR325.00, citing strong first-quarter performance and improved market positioning.

The cement manufacturer reported first-quarter EBITDA of Rs5.19 billion, representing approximately 51% year-over-year growth driven by higher cement sales volumes and realizations. This figure significantly exceeded Citi’s estimate of Rs4.32 billion.

Nuvoco’s EBITDA per ton reached Rs1,023 in the first quarter, compared to Rs963 in the fourth quarter and Rs715 in the first quarter of fiscal year 2025. The outperformance against estimates was primarily attributed to higher-than-expected realizations.

Recent cement price hikes have elevated Nuvoco’s EBITDA per ton to more than Rs1,000, a substantial improvement from the fiscal years 2023-2025 average of approximately Rs740 per ton. While Citi believes further price increases may be limited, the company appears to be focusing on volume growth and likely gained market share in the first quarter.

Citi noted that Nuvoco’s current enterprise value per ton of $70 appears inexpensive, and its volume-focused strategy should strengthen its balance sheet and help fund the Vadraj acquisition.

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