The topline of the Issuer has remained volatile for the last three fiscals. Total revenues have increased by 10% for FY21 to Rs 7522 crore from Rs 6829 crore in FY20. The revenues were reduced by 4% for FY19 as against revenues for FY18. Nuvoco posted a loss of Rs (25.92) crore for FY21 as against profits of Rs 250 crore in FY20. However, the EBITDA of the Issuer has grown on year to year basis; EBITDA margins have been strong for all three fiscals.
Debt to equity is at a higher side being 1.19 as of 31st March 2021. Return on net worth is (0.35%).
Revenue from operations
|Cash and Bank||527.77||510.85||124.71|
|Cash Generated from operations||1717.36||1024.77||860.09|
The Issuer has a negative P/E as the EPS is -0.82 as of 31st Mar 2021. However, on an average EPS basis for last three fiscals, the Issue is priced at 204x calculated at the upper price band of Rs 570 per share. Thus the Issue is aggressively priced. P/BV is 2.45x at NAV of Rs 232.43 as of 31st Mar 2021.
|Particulars||Ultratech Cement||Shree Cement||Ambuja Cement||ACC Limited|
|Face Value per share||10||10||2||10|
|Total Income for FY21 (INR Crores)||45459.97||13942.7||24965.8||14002.7|
|NAV per share||153.06||428.17||14.65||67.64|
|Return on net worth||12.36%||14.82%||10.68%||11.26%|
The Issuer has a strong brand value of being associated with Nirma Group. Nuvoco has diversified product offerings and is the largest cement manufacturer in East India and the fifth largest cement manufacturer in India in terms of capacity. If we look at the sector outlook, the cement sector would have strong demand as Government increases its infra spending. But it’s bound to happen only in the long term.
The financial performance of the Issuer is weak, it has losses after tax and the topline is volatile. Even after repayment of debt with IPO proceeds, debt to equity would be at higher levels. Hence considering all the above factors, one can avoid this IPO.
Review By CA Priyanka Choudhary on 26th Jul 2021
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
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