NCC stock gains as PSU bags contracts worth Rs 3,496 crore in October

NCC is among HDFC Securities' top Diwali stock picks with a target price of Rs 363.

Shares of NCC edged a little higher after the PSU informed that it has bagged multiple contracts amounting to Rs 3,496 crore in October 2024.

All the contracts were from central and state government agencies and private companies, the company said, adding that these projects span across the Building, Electrical, and Water divisions.

The Building Division secured the largest share, with contracts worth Rs 2,694 crore, followed by the Electrical Division, which received orders worth Rs 538 crore, and the Water & Other Divisions, with projects valued at Rs 274 crore. The execution timelines for these contracts range from six months to six years.

In a statement, NCC clarified that neither the promoters nor the promoter group have any interest in the entities awarding the contracts, and none of the orders fall under "related party transactions."

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At 10:02 am, NCC shares were trading marginally higher at Rs 313 on the National Stock Exchange (NSE). The stock has risen around 85 percent so far this year, outperforming Nifty's returns of 10 percent.

In the past 12 months, the counter has gained 103 percent, doubling investors' capital. Nifty rose 23 percent during this period.

NCC is among HDFC Securities' top Diwali stock picks with a target price of Rs 363. According to the brokerage, the company has a well-diversified order book, robust execution capabilities, strong focus on debt reduction and improvement in working capital.

Segment diversity across building, mining, railways, electrical, water & environment is one of the key differentiators at NCC.

The company’s vast experience and proven execution capabilities can help leverage rising opportunities in the buildings, water infra, transportation, metros, defense and airports as the awarding momentum picks up, said HDFC Securities, adding that positive tailwinds with Government’s focus on infrastructure development by various schemes will also aid the growth of the company.

"Given the all-time high order book, execution ramp-up, and robust balance sheet we expect NCC to capture healthy growth in the medium term. We expect Revenue/EBITDA/PAT to grow at CAGR of 16%/21%/39.6% over FY24-26E. Investors can buy the stock in the band of Rs 273-303 for a target of Rs. 363 (18x FY26E EPS) till next Diwali," it added.

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