Kotak Institutional Equities has upgraded Nuvoco Vistas to a buy rating with a target price of ₹410 per share, citing a clear shift in the company’s strategic focus from balance-sheet repair to growth acceleration. The brokerage said Nuvoco has successfully deleveraged over FY22–25, creating room to pursue capacity-led expansion that can structurally lift volumes, expand its regional footprint and improve competitive positioning across key markets.
Kotak highlighted that Nuvoco is now preparing to commission 4.5 mtpa of new cement capacity in the western region by FY27, a move expected to meaningfully diversify its geographical mix, reduce concentration risk and strengthen its presence in a high-growth cluster. In parallel, the company is working on a 4 mtpa low-cost debottlenecking program in the eastern region. According to the brokerage, this initiative is crucial for maintaining its market share in a region where demand has remained resilient and competitive intensity continues to rise.
While the increased capex cycle will result in leverage peaking at around 2.9x in FY26, Kotak said the balance sheet remains manageable, given the company’s improved cash generation profile and the earnings uplift expected as new capacity ramps up. The brokerage believes Nuvoco’s expansion blueprint marks a decisive shift towards volume-led growth, with a more balanced regional contribution setting the stage for stronger medium-term performance.
Disclaimer: The views and recommendations above are those of Kotak Institutional Equities. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
