January 10, 2017 / 16:56 IST
AUM Capital's research report on NBCC National Buildings Construction Corporation Ltd. (NBCC) is a 56 year old Navratna PSU company. The company is present in three main segments, i.e. (i) Project Management Consultancy (PMC), (ii) Real Estate Development (RE) & (iii) EPC Contracting. The PMC contributes 85-90% of its annual turnover. It gets PMC contracts on nomination basis, as it is notified as a Public Work Organization under revised Rule 126 (2) of general financial rules (GFR). It undertakes the entire project from concept designing to commissioning.
Outlook
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A strong debt free balance sheet and huge opportunity in redevelopment space along with strong order book continue to play positive on NBCC. Benefit of low inflation, low interest rate and transparency post demonetization will give big boost to the construction sector as a whole. Hence we recommend BUY on NBCC with a price target of Rs.299 assuming a P/E of 30x FY18e EPS of 9.95 over a period of 12 months with an upside of 27%.
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