1. At a Glance
Nuvoco Vistas (₹360) is a ₹12,900-cr cement and building materials arm of the Nirma group. With 25 MMTPA cement capacity and a fast-growing RMX/construction chemicals franchise, it posted a mere 9% five-year sales CAGR, 0.24% ROE, and zero dividend. At ~590× FY25 EPS, the valuation leaves little room for error.
2. Introduction with Hook
Imagine pouring a fresh batch of ready-mix concrete that costs you more than gold per kilogram. That’s Nuvoco’s P/E of ~590× FY25 EPS in a cyclical sector where peers trade at 30–60×. A company once riding the Nirma brand wave now risks getting buried under sky-high multiples and mediocre returns.
3. Business Model (WTF Do They Even Do?)
- Cement: 25 MMTPA clinker capacity across West Bengal, Bihar, Odisha, Maharashtra.
- Ready-Mix Concrete (RMX): Urban infrastructure and real estate tie-ups in 50+ cities.
- Building Materials: Wall putty, adhesives, dry plaster, cover blocks under “Nuvocem” and “PowerBuild” brands.
- Integration Play: Backward integration into clinker for margin control, forward into RMX for value capture.
- Distribution: 10,000+ dealers, 2,000+ RMX plants, pan-India footprint.
4. Financials Overview – Profit, Margins, ROE, Growth
- Sales CAGR (FY20–25): ~9% (from ₹9,318 cr to ₹10,357 cr)
- EBITDA Margin (FY25): 13%
- ROCE (FY25): 3.9%
- ROE (FY25): 0.24%
- Net Profit (FY25): ₹22 cr vs. ₹147 cr in FY24 (-85% TTM)
- EPS (FY25): ₹0.61 vs. ₹4.13 in FY24 (-85% TTM)
5. Valuation – Is It Cheap, Meh, or Crack?
- Current P/E: ~590× FY25 EPS; P/B: 1.43×
- Peer P/E Range: 16× (ACC) to 60× (UltraTech), median ~50×
- Fair Value Range: 8–12× FY25 EPS = ₹5–7
- Rationale: At 8–12×, you pay for a secular cement play with RMX diversification. Anything north of 15× feels like chewing cement aftertaste.
6. What’s Cooking – News, Triggers, Drama
- Apr 2025: Completed acquisition of Vadraj Cement (1.8 MMTPA) for ₹1,800 cr, pushing capacity to 31 MMTPA by FY27.
- Jun 2025: West Bengal revokes ₹728 cr incentives; Nuvoco has challenged the order in court.
- May 2025: Q4 EBITDA hit record ₹556 cr; net debt fell ₹390 cr year-on-year.
- Ongoing: RMX price wars intensify in metros, squeezing margins.
7. Balance Sheet – How Much Debt, How Many Dreams?
- Borrowings (FY25): ₹4,074 cr vs. reserves ₹8,645 cr (net debt ≈ ₹4,000 cr)
- Assets: ₹18,158 cr; Equity: ₹9,002 cr
- Working Capital: Negative cycle of -56 days (debtor days 23, inventory 135, payable 281)
- Liquidity: ₹1,329 cr operating cash flow vs. ₹337 cr capex (FY25)
8. Cash Flow – Sab Number Game Hai
- OCF (FY25): ₹1,329 cr
- Capex (FY25): ₹337 cr (clinker lines, RMX plants)
- Free Cash Flow: ₹992 cr (funding acquisitions and debt paydown)
- Dividend: Nil since IPO (0% payout)
9. Ratios – Sexy or Stressy?
| Ratio | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| ROCE (%) | 8 | 6 | 4 | 5 | 4 |
| ROE (%) | 10 | -1 | 1 | 4 | 0.2 |
| Net Debt/Equity | 0.68 | 0.65 | 0.56 | 0.51 | 0.45 |
| Inventory Days | 179 | 215 | 215 | 177 | 135 |
| Cash Conversion Cycle | -27 | -26 | -113 | -118 | -123 |
10. P&L Breakdown – Show Me the Money
- Revenue Mix (FY25): Cement 72%, RMX 15%, Building Materials 13%
- Gross Margin (FY25): ~28% (steel, fuel volatility weigh)
- Other Income: ₹19 cr (vs -₹393 cr in FY23 writedown)
- Interest Cost: ₹496 cr (vs ₹533 cr in FY24)
11. Peer Comparison – Who Else in the Game?
| Company | CMP | P/E | ROCE (%) | 5-Yr Sales CAGR |
|---|---|---|---|---|
| Nuvoco Vistas | 360 | 590× | 4 | 9% |
| UltraTech Cement | 12,495 | 60× | 11 | 10% |
| Ambuja Cements | 587 | 35× | 10 | 8% |
| ACC | 1,983 | 16× | 17 | 12% |
| Dalmia Bharat | 2,176 | 58× | 6 | 11% |
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 72.0%
- FIIs: 3.6%; DIIs: 19.4%; Public: 5.1%
- Key Managerial Personnel:
- Mr. Harsh P. Gandhi, Chairman
- Mr. Ratnakar T. D, MD & CEO
- Ms. Bhawna Kannan, CFO
13. EduInvesting Verdict™
Nuvoco Vistas boasts integrated cement capacity, RMX diversification, and aggressive expansion—but the financials are underwhelming: sub-5% ROCE, zero dividend, profit volatility, and sky-high valuation. At ₹360 (590× FY25 EPS), the only place you’ll get growth is on your blood pressure monitor. A fair-value tilt of ₹5–7 (8–12× EPS) might be more concrete.
Tags: Nuvoco Vistas, Cement, 5-Year Recap, Fair Value, EduInvesting
✍️ Written by Prashant | 📅 12 July 2025
