Motilal Oswal sees Nagarjuna Const Jul-Sep revenue up 50%

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Broking house, Motilal Oswal expects Nagarjuna Construction to report revenues of Rs5.5b (up 50% YoY) and net profit of Rs366m (up 75% YoY).

Their report says, "During 2QFY07, we expect Nagarjuna Construction Company (NCC) to report revenues of Rs5.5b (up 50% YoY) and net profit of Rs366m (up 75% YoY).

As at June 2006, NCC's order backlog stood at Rs62.7b (equivalent to 3.5xFY06 revenues), up 22% YoY. The order book composition stands thus: Roads Rs31b, water projects Rs11.2b, buildings Rs10.3b, electricals Rs4.3b and irrigation works Rs6b.

NCC has announced order intake of Rs9.5b (notified to the stock exchange) in 2QFY07. Some of the key orders received by the company includes: Road project in Oman (Rs7.2b), and orders from structures, dams etc (Rs2.3b).

Management has given guidance for 63% YoY growth in revenues to Rs30b in FY07 and order book as at March 2007 at Rs70b.

The company is focusing on new verticals such as gas pipelines, real estate development and international operations. The company has drawn up sizeable plans in the real estate sector. We recommend Buy."