NCC reported a revenue of INR 193bn, flat YoY despite having a book-to-bill ratio of 3.7x. EBITDA and PAT for the year were down 5% YoY each, at INR 175bn and INR 8bn, respectively. EBITDA margin was 9.1% (-90bps YoY). The weakness in revenues stemmed from slow execution in water projects and smart meter orders. While the order execution on water projects is yet to pick up, it now forms only a small portion (6%) of the total order book (OB).
OutlookAlso, NCC received an order of INR 300bn in FY25. We believe that order execution on a few of the older orders is slow, leading to low growth in FY26E. We believe, revenues are likely to pick up in FY27E. Thus, we expect earnings CAGR of 15% over FY25–27E. Retain BUY; TP revised to INR 262. NCC is our top pick in construction universe.
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