Feb 16, 2017 01:22 PM IST | Source: Moneycontrol.com
Hold NBCC; target of Rs 273: Edelweiss
Edelweiss recommended hold rating on NBCC with a target price of Rs 273 in its research report dated February 14, 2017.
Edelweiss' research report on NBCC
Client specific issues in PMC division and continued slowdown in real estate vertical restricted NBCC’s Q3FY17 revenue growth to 4% YoY. EBITDA margin improved 100bps YoY to 5.3% due to change in payment norms for PMC projects. Rising interest costs, up 73% YoY, curtailed PAT growth to 10% YoY.
While NBCC’s order book of INR560bn provides strong revenue visibility (book-to-bill at 9.1x), we believe execution will remain soft in near term and pick up only in H2FY18 when work on redevelopment projects in Delhi commences. Maintain ‘HOLD’ with a target price of INR 273 as we roll over to FY19E.
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