Buy NBCC; target of Rs 45: Geojit

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Geojit's research report on NBCC

Q3FY21 revenue grew by 19% YoY led by pick up in execution in PMC segment (21% YoY) and improved labour availability. EBITDA margin improved by 181bps YoY due to fall in employee cost (-3% YoY) and other expenses (-22% YoY). Order book remains strong at Rs62,000cr, however, orders worth ~Rs18,500cr were in execution stage and NBCC targets to take total projects under execution to ~Rs27,000cr in FY21. NBCC got clearance for Nauroji & Netaji Nagar projects while Sarojini Nagar projects are awaiting forest clearances. We increase FY21E/22E revenue estimates by 15%/16% due to pick up in PMC execution and revival in real estate monetisation.

Outlook

We value NBCC‘s core business at a P/E of 20x on FY22E EPS & Rs5/share for land parcel held and revise our rating to Buy with a TP of Rs45.

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