Nuvoco Vistas surges 30% in 3 days after promoter increases stake

Shares of Nuvoco Vistas Corporation moved higher by 12 per cent to Rs 387 on the National Stock Exchange (NSE) in Wednesday's intra-day trade, extending their rally into third straight day. Since last Thursday, the stock has rallied 30 per cent after one of the promoters bought over 50,000 shares of the company via open market.

On February 25, 2022, Niyogi Enterprise Private Limited, one of the promoters of Nuvoco Vistas, purchased 68,222 equity shares of the company via market purchase, according to company's disclosure on the stock exchanges. Post acquisition, it's holding has increased to 59.18 per cent from 59.17 per cent, data shows.

BofA Securities Europe SA had sold 3.06 million equity shares, representing 0.86 per cent stake, at Rs 303 per share, making the sale proceeds worth around Rs 93 crore. The names of the other buyers could not be ascertained immediately.

Nuvoco Vistas Corporation is a leading building materials company and the fifth largest cement player, in terms of capacity, in India. The stock had hit a record low of Rs 294.55 on February 24, 2022. Moreover, it has corrected 49 per cent from its 52-week high level of Rs 577.50 hit on September 6, 2021. The company debuted on the stock market on August 23, 2021 by issuing shares at a price of Rs 570 per share.

It reported consolidated loss of Rs 86 crore in third quarter of FY22 (Q3FY22) due to lower revenue as against a consolidated profit of Rs 44 crore in Q3FY21. Revenue from operations declined 3 per cent year-on-year (YoY) to Rs 2,165 crore as against Rs 2,231 crore in the corresponding quarter of the previous fiscal year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins also contracted 1,000 bps to 11 per cent from 21 per cent in Q3FY21.

However, the company expects Q4FY22 to witness strong demand recovery amid potential clinker shortage resulting in opportunity to correct prices. It also expects to exploit market growth as Q4 is seasonally stronger quarter with robust demand drivers. The aggressive price hikes in key markets are expected to offset input cost increase and see higher incentive from Jojobera volumes.

Nuvoco has been working on multiple projects for a sustainable growth with an aspiration to diversify its market base and reduce the business risk. The ongoing debottlenecking projects to increase the clinker capacity at Risda and Nimbol Cement Plants are on track.

"Furthermore, the Blending Unit at Bhiwani, Haryana will be upgraded to a Grinding Unit to leverage on the successful launch of Double Bull cement brand in North and the Company’s existing channel in the region. This will provide key impetus to serve high growth North India markets," the company said.