Feb 16, 2017 11:32 AM IST | Source: Moneycontrol.com
Hold NCC; target of Rs 93: Karvy
Karvy recommended hold rating on NCC with a target price of Rs 93 in its research report dated February 14, 2017.
Karvy's research report on NCC
NCC’s Q3FY17 Adjusted PAT of Rs 661 mn was better than our estimate of Rs 460 mn, mainly on account of higher than expected other income and lower effective tax rate. Revenues of Rs 19.04 bn declined ~7% YoY (lower than our estimate of Rs 19.95bn) due to slowdown in execution marred by de-monetization. EBITDA of Rs 1.74bn (down 6% YoY) was largely in-line with estimates as margins a tad higher (9.2% vs. est. of 8.8%).
Implied valuation at 12.5x P/E on FY18E standalone earnings looks fair after the downward revision in earnings estimates. We downgrade our rating on NCC to Hold (from Buy earlier) with a revised target price of Rs 93 (based on 14x P/E standalone FY18E EPS and Rs 18/share to development business).
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