Buy NCC; target of Rs 184: Geojit

Geojit is bullish on NCC has recommended buy rating on the stock with a target price of Rs 184 in its research report dated August 24, 2023.

Broker Research

August 24, 2023 / 12:49 IST

Buy

26 Aug, 2025 12:21

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Geojit's research report on NCC

NCC Ltd. (NCC) is one of the largest, well diversified construction companies in India, with a foothold in every segment of the construction sector. NCC reported a top-line growth of 30% YoY, backed by its strong execution in Jal Jeevan Mission projects (30% of revenue). EBITDA margin improved by 41bps YoY to 9.9% in Q1 FY24, principally due to higher execution and moderation in input prices. NCC expects margins to improve to 10% in FY24, led by a better gross margin. In Q1FY24, order inflows increased by 83% YoY, taking the total order book to an all time high of Rs54,110cr (3.8x TTM revenue), providing strong revenue visibility in the coming years. With a strong order book, the company has guided for revenue growth of 20%/15% for FY24/FY25, respectively. With a pick-up in execution and benign input prices, we increase the FY24/FY25 earnings estimates by 5%/10%, respectively.

Outlook

We reiterate BUY rating on NCC and value the stock at a P/E of 11.5x on FY25E EPS with a TP of Rs.184.

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