ICICI Securities Maintains Hold Rating on Nuvoco Vistas Corporation with Revised Target of ₹369

Nuvoco Vistas Corporation has received a maintained Hold rating from ICICI Securities, though the brokerage has revised its target price downward to ₹369 from the previous ₹400. The recommendation comes following the company's Q3FY26 performance analysis and updated market outlook.

Q3FY26 Financial Performance

The company's Q3FY26 results showed mixed signals with EBITDA growth offset by pricing pressures. Key performance metrics include:

Metric	Q3FY26 Performance	Details
EBITDA Growth	+49% YoY	Growth on low base, broadly in line with expectations
Realisation	-4.6% QoQ	Decline vs ICICI's forecast of 2.5% drop
Variable Cost Management	-3% QoQ	Helped offset pricing pressures vs flat estimate

Despite the realisation falling more than anticipated, Nuvoco's efficient cost management helped the company navigate the challenging pricing environment. The variable cost per tonne decreased by 3% quarter-on-quarter, compared to ICICI Securities' estimate of it remaining flat.

Revised Earnings Estimates

ICICI Securities has adjusted its earnings projections for the company, reflecting current market dynamics and competitive landscape:

Parameter	Revision	Rationale
FY26E EBITDA	Reduced by ~6%	Higher competitive intensity in Q3FY26
FY27E EBITDA	Reduced by ~7%	Capacity addition impact and 9MFY26 alignment
Capacity Addition Impact	185mtpa over FY26-28	Significant industry capacity expansion

The downward revision incorporates three key factors: heightened competitive intensity witnessed during Q3FY26, the potential impact of substantial capacity additions totaling approximately 185 million tonnes per annum over FY26-28, and alignment with the company's 9MFY26 performance trends.

Market Outlook and Seasonal Expectations

The brokerage remains cautiously optimistic about near-term price recovery prospects. With the onset of the busy construction season from January to May each year, ICICI Securities expects potential price improvements in line with Nuvoco's earnings call commentary. However, this optimism is tempered by broader industry challenges and competitive pressures.

Valuation and Investment Rationale

ICICI Securities continues to face constraints in raising its valuation multiple due to persistent debt concerns. The firm maintains its valuation approach:

Valuation Parameter	Details
EV/EBITDA Multiple	9x FY27E
Target Price	₹369 (revised from ₹400)
Rating	Hold (maintained)
Key Constraint	Sticky debt concerns limiting multiple expansion

The maintained Hold rating reflects a balanced view of the company's operational efficiency against industry headwinds. While Nuvoco demonstrated effective cost management during a challenging quarter, the broader competitive landscape and upcoming capacity additions present ongoing challenges for sustained margin expansion.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.39%	-1.28%	-3.49%	-10.14%	-1.16%	-34.47%

Nuvoco Vistas Corporation has received a maintained BUY rating from Prabhudas Lilladher, with the brokerage revising its target price upward to ₹443.00 from the earlier ₹435.00. The recommendation comes following the company's inline operating performance in Q3FY26, which demonstrated resilience despite challenging market conditions.

Q3FY26 Operational Performance

The cement manufacturer reported decent volume growth during the quarter, with key performance metrics reflecting mixed results:

Performance Metric	Q3FY26 Result	Change
Volume Growth	-	+7% YoY
Pure Cement Realizations	-	-5.3% QoQ
EBITDA per Tonne	₹763.00	+39% YoY
Power and Fuel Costs	-	-9% YoY

The decline in pure cement realizations was primarily attributed to weak prices in the eastern region. However, this was offset by significant improvement in EBITDA per tonne, which reached ₹763.00 compared to Prabhudas Lilladher's estimate of ₹775.00.

Cost Structure and Margin Dynamics

Raw material costs remained elevated despite the company's access to better-priced slag under long-term contracts. The power and fuel cost reduction of 9% YoY was aided by a higher share of domestic coal in the energy mix. Management expects overall fuel costs to remain largely stable, supported by increased domestic coal usage.

The recent uptick in pet coke prices poses a risk to margins in Q4FY26. However, cement price hikes implemented in January are holding amid improving demand conditions, providing some support to realizations.

Expansion Plans and Capacity Growth

The Vadraj acquisition remains on track with commissioning expected by Q1FY28. This strategic expansion will take Nuvoco Vistas Corporation's total cement capacity to approximately 35 million tonnes per annum, significantly enhancing its market presence.

Financial Projections and Valuation

Prabhudas Lilladher has raised its EBITDA estimates by 2% based on slightly higher volumes. The brokerage expects the company to deliver EBITDA CAGR of 19% over FY25-28E period.

Valuation Metrics	FY27E	FY28E
EV/EBITDA Multiple	8.2x	6.8x
Target Valuation	9x EV of Sep'27E EBITDA	-

The stock is currently trading at EV of 8.2x FY27E EBITDA and 6.8x FY28E EBITDA. The revised target price of ₹443.00 is based on 9x EV of September 2027E EBITDA, reflecting the brokerage's confidence in the company's growth trajectory and operational improvements.