Buy NBCC; target of Rs 80: ICICI Direct
ICICI Direct is bullish on NBCC has recommended buy rating on the stock with a target price of Rs 80 in its research report dated November 16, 2018.
November 22, 2018 / 04:15 PM IST
ICICI Direct's research report on NBCC
Net sales grew at a robust pace of 39.7% YoY to Rs 1582.1 crore (our estimate: Rs 1331.1 crore) on account of 38.8% strong growth in PMC revenues to Rs 1392.4 crore (our estimate: Rs 1171.9 crore). Also, given the changes in accounting standard to Ind-As 115, NBCC reported revenue growth of 266.2% YoY to Rs 53.3 crore in real estate division EBITDA margins contracted 371 bps YoY to 3.7% (our estimate: 8.8%) mainly due to a sharp decline of 900 bps YoY in PMC division EBIT margins to 7.7% PAT grew 16.0% YoY to Rs 85.9 crore due to strong topline growth and higher other income (Rs 64.4 crore in Q2FY19).
Hence, we continue to maintain our BUY rating on the stock with an SOTP based revised target price of Rs 80 (implying ~32x FY20E EPS).
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