Synopsis: HSBC has reaffirmed its ‘Buy’ rating on this East India cement manufacturer, increasing the target price to ₹475, suggesting a nearly 20% upside. This follows a strong EBITDA performance in the June quarter, supported by higher prices and a positive demand outlook for the cement sector in H2 FY27.
India’s cement sector is drawing renewed attention from global brokerages as pricing power returns to the industry after a prolonged stretch of cost pressure. With election-related disruptions in a few states now behind it and government capex continuing to expand, one of the country’s mid-sized cement players has caught the market’s eye following a quarter that beat expectations on operating profitability, prompting a fresh round of earnings upgrades.
With a market capitalization of Rs. 13,940 crore, the shares of Nuvoco Vistas Corporation Limited were trading at Rs. 398 per share, with a 52-week range of Rs. 477.50 to Rs. 276.25, and they are trading at a P/E of approximately 33x. The stock jumped 16 percent after the rating was given.
HSBC’s Buy Call
HSBC has maintained its ‘Buy’ rating on Nuvoco Vistas, raising its target price to ₹475 from an earlier level, implying an upside of nearly 20% from the current market price of ₹341.40. The brokerage noted that the company continued its strong performance in the June quarter, with an EBITDA beat driven largely by higher cement prices rather than volume-led gains.
HSBC said it sees a better demand, pricing, and cost environment for the cement sector unfolding through the second half of FY27 as infrastructure and housing-led government spending continues to support offtake. On the back of this outlook, the brokerage raised its FY27-29 EPS estimates for the company by 6-11%. HSBC also flagged that current valuations, at 5.7x FY28 EV/EBITDA and roughly $55 per tonne on an EV/tonne basis, look attractive relative to the sector.
Q1 FY27 Performance
Nuvoco Vistas sales volume for the June quarter came in at 5.3 million metric tonnes, up 5% year-on-year from 5.1 MMT in the same quarter last year, a creditable number given the mixed demand backdrop across several states.
On the consolidated financial front, total income for the quarter stood at ₹3,132 crore, while revenue from operations came in at ₹3,129 crore, marking a 9% year-on-year increase from ₹2,873 crore in Q1 FY26.EBITDA for the quarter rose to ₹572 crore, up 7% year-on-year from ₹533 crore, and management called it the company’s strongest first-quarter EBITDA performance to date.
Capacity Expansion
The company remains on a structural growth path, with total cement capacity set to rise from the current 27 MMTPA to around 35 MMTPA, driven by the ongoing integration of Vadraj Cement and a planned expansion in the East. As part of this, a 2 MMTPA grinding unit at Surat, Gujarat was commissioned in July 2026, ahead of schedule, strengthening the company’s presence in the Western market and freeing up capacity at its Rajasthan plants to serve the North.
The larger Kutch Integrated Unit, comprising a 3.5 MMTPA clinker unit and a 2.5 MMTPA grinding unit, is expected to be commissioned in phases between Q3 FY27 and Q1 FY28, while a bulk terminal at Sachana, Gujarat, with a handling capacity of about 1.5 MMTPA, is targeted for commissioning by Q2 FY28.
For Investors
HSBC’s raised target price, backed by a sector-wide improvement in demand and pricing visibility, adds to the investment case for Nuvoco Vistas at a time when the stock trades well below its 52-week high.
The ongoing capacity build-out through Vadraj Cement and the East expansion could serve as a medium-term volume driver, while price hikes across the industry may help offset input cost pressures tied to geopolitical developments. That said, investors may want to track execution timelines on the Kutch unit, the pace of cost inflation in fuel and packaging, and how sustainably cement prices hold up once the monsoon season passes.
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