ICICI Securities's research report on NCC
NCC’s Q2FY26 reported a decline of 16% in revenues in Q2FY26 (vs I-Sec’s flat expectation). The execution was negatively impacted on account of 1) low execution in existing order book for water segment (due to payment delays), 2) prolonged monsoon andCo 3) delay in start of work on order received during FY25 (40% of current order book). The management withdrew the guidance in view of uncertainty. EBITDA margin came in at 7.4% (-160 bps YoY) and PAT at INR 1bn (-37% YoY) in the quarter. It has a robust orderbook (OB) of INR 720bn aided by strong order inflows of INR 98bn in H1FY26 (+91% YoY).
Outlook
We downgrade to HOLD (from Buy) with a revised TP of INR 193, given the uncertainty in near-term execution and cashflow headwinds. Stock is trading at 14x FY27E earnings.
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