ICICI Direct's research report on NBCC Ltd
Media reports indicate that the Delhi High Court (HC) has maintained its stay on tree felling until further orders. Also, the National Green Tribunal (NGT) has ordered not to fell trees for redevelopment of government colonies till July 19, 2018. Previously, the Delhi High Court had directed NBCC to stop tree felling till July 4, 2018. This decision came after a PIL was filed, which sought setting aside of terms of reference (ToR) and environment clearances (EC) granted to the project by the Environment Ministry, saying it would lead to felling of over 16500 trees.
Outlook
We continue to maintain our BUY rating on the stock with an SOTP based target price of | 96 (implying ~32x FY20E EPS). We value NBCC’s PMC and redevelopment business on DCF based methodology and have now consider discounting rate of 13% (12% earlier) for PMC and 14% (13% earlier) for the redevelopment business.
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