The peak construction season is currently underway. In addition, the Union budget is just a few days away. The Union budget typically pays considerable attention to housing in rural and small towns via the Pradhan Mantri Awas Yojana coupled with the development of infrastructure projects across the country. This in turn creates strong demand for cement companies over the next few quarters.
The Valuation Gap
To help investors shortlist cement companies with reasonable valuations and strong growth prospects, we looked at two criteria — market capitalisation of the stock should be more than Rs 10,000 crore. In addition, we selected stocks that are the lowest on the valuation matrix – enterprise value (EV) to EBITDA (operating profit).
The two stocks that met the criteria – Nuvoco Vistas Corporation and Dalmia Bharat.
Company Analysis: Nuvoco & Dalmia
Let’s dig in to find out about both these companies.
Valuations at a glance
| Market capitalisation in Rs crore | EV / EBITDA | |
| Nuvoco Vistas Corporation | Rs 12,502 crore | 9.8 |
| Dalmia Bharat | Rs 39,023 crore | 14.3 |
| UltraTech Cement Company | Rs 3,76,396 crore | 24.1 |
| Industry Median | 12.6 |
Nuvoco Vistas Corporation trades on the valuation multiple – EV to EBITDA at about 9.8, while Dalmia Bharat trades at 14.3 times.
The largest cement manufacturer in the country, UltraTech Cement Company trades at an EV to EBIDTA of 24.1 times.
The industry median is 12.6 for the above valuation matrix.
Now, let’s evaluate the business performance of these two cement companies.
Operations at a glance – December 2025 quarter
| Operational capacity (million tonnes) | Growth in consolidated revenue from operations (%) | Growth in net profit (%) | ||
| Dalmia Bharat | 49 million tonnes | 10% y-o-y | 94% y-o-y | |
| Nuvoco Vistas Corporation | 25 million tonnes | 12% y-o-y | – |
Dalmia Bharat
The New Delhi-based company is the fourth-largest cement player in the country with a capacity of 49 million tonnes at the end of the December 2025 quarter. It also has a 212 MW thermal power capacity along with 410 MW renewable power capacity at the end of Q3FY26
The company sells cement in the south, east and north-east along with western region. The company expects to reach 55.5 million tonnes of cement capacity by FY27 and 61.5 million tonnes by September quarter of FY28. The company is well positioned to leverage the expected pick-up in infrastructure spending in different parts of the country over the next few years.
In the December 2025 quarter, the company sold 7.3 million tonnes of cement vis-a-vis 6.7 million tonnes a year earlier.
Its realisations grew nearly 1.2% y-o-y to Rs 4,802 per tonne in Q3FY26, and the company’s strong presence in the eastern region helped it to keep realisations steady at a time when other cement companies are facing pressure on their realisations on a y-o-y basis.
Higher volume of sales and better realisations helped its consolidated revenue from operations grow 10% y-o-y to Rs 3,506 crore in the quarter under review.
Operating profit margin grew nearly 140 basis points y-o-y to 17.5% in the third quarter of FY26. The company benefited from a near 5% y-o-y fall in its key freight charges to Rs 1,058 per tonne. The company has highlighted direct dispatches to its distribution network was 62% in Q3FY26 vis-a-vis 56% a year earlier along with other cost savings strategies.
Also, its increasing use of renewable energy supplies helped to keep a tight check on its power costs, which showed a very marginal increase to Rs 1,019 per tonne in Q3FY26. The company has highlighted that renewable energy accounted for 48% in Q3FY26 vis-a-vis 33% a year earlier.
Tight check on its costs helped consolidated net profit rise nearly 94 % y-o-y to Rs 128 crore in the December 2025 quarter.
This stock was down 1.3% in Wednesday trading at Rs 2,080.5, and it had reached a 52-week high of Rs 2,496 on 17 September, 2025.
It has a market capitalisation of Rs 39,023 crore on the BSE. Also, it trades at a valuation multiple, EV / EBITDA of 14.3 times.
Nuvoco Vistas Corporation
The Mumbai-based cement player has 25 million tonne operational capacity at the end of the December 2025 quarter, with 76% in the east and the remainder in the north.
In early April, 2025, the company received approvals from the National Company Law Tribunal’s (NCLT) Mumbai Bench for its resolution plan to acquire the bankrupt Gujarat-based Vadraj Cement with 6 million tonne capacity for Rs 1,800 crore. The acquired capacity is expected to be operational from Q3 FY27 – Q1 FY28, according to its investor presentation.
This acquisition had enabled the company to become the fifth-largest cement player in the country.
The company is also implementing a 4 million tonne cement capacity expansion and this is expected to commissioned in phases by March 2027, and its total cement capacity would reach 35 million tonnes.
It also has renewable energy capacity of 50 MW at the end of the third quarter of FY26.
In the December 2025 quarter, the company sold 5 million tonnes of cement vis-a-vis 4.7 million tonnes a year earlier.
Its realisations grew 5.7% y-o-y to Rs 4,910 per tonne in Q3FY26.This was also due to its strong presence in the eastern markets. Its consolidated revenues from operations grew 12% y-o-y to Rs 2,701.3 crore in the December 2025 quarter.
Its operating profit margin grew 610 basis points y-o-y to 14.4% in Q3FY26, and that was thanks to its power and fuel costs declining nearly 8 % y-o-y to Rs 996 per tonne. The company has highlighted an optimal combination of conventional and renewable power for keeping this overhead under check.
The company reported a net profit of Rs 49.4 crore in the December 2025 quarter vis-a-vis a net loss of Rs 61.4 crore a year earlier.
The stock had gained 1.4% to Rs 350 on Wednesday, and it has a market capitalisation of Rs 12,502 crore. Also, it trades at a multiple, EV to EBITDA of 9.8 times.
Investors on Dalal Street
The Union budget is expected to provide a stimulus to housing and infrastructure sector, which in turn should help catalyse demand for cement companies, going forward.
Of equal importance is the RBI is taking steps to boost lending in the broader banking system and lowering interest rates for loans / credit via various policy measures. This in turn should increase construction activity in the country and demand for cement, going forward.
On account of reasonable valuations and aggressive growth plans, investors can add Dalmia Bharat and Nuvoco Vistas Corporation to their watch list of stocks for 2026.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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