ICICI Securities issued a hold rating on Nuvoco Vistas Corporation with a target price of Rs 348. The firm said the Q2FY27 EBITDA beat estimates, but rising fuel costs and weak demand remain concerns. Analysts got cautious due to high debt and competitive pressure, choosing to keep their current outlook.
ICICI Securities research report on Nuvoco Vistas Corporation Nuvoco Vistas Corp's (Nuvoco) Q2FY27 EBITDA (up 11% YoY/down 28% QoQ) stood ~9% ahead of our estimate - beat across volume, realisation and cost. Yet, we remain uninspired to pursue any earnings upgrade due to rising fuel cost, even as the industry attempts price hikes (to pass on the cost impact). Further, given the sticky concerns - 1) potentially weak demand due to drought in several states; 2) our view of unabating competitive intensity amid significant capacity addition; 3) volatile global fuel cost; 4) Nuvoco-specific issues of high leverage; and 5) muted RoE - we see little scope to revise up our valuation multiple as well. Outlook We continue to value Nuvoco at 8x FY28E EV/EBITDA, but our TP is now lower, at INR 348 (vs. INR 358), due to the recent debt uptick and higher capex guidance for FY27. Retain HOLD. For all recommendations report, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Nuvoco Vistas Corporation - 2610026 - icici