Buy NCC; target of Rs 60: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on NCC

With Rs 15.4bn of revenue reported, NCC missed our estimate by 12.8%. However, it surprised on EBIDTA margin front, owing to cost rationalisation initiatives. With order wins of Rs 30bn during the quarter, the orderbook now stands at Rs 294bn. Management expects capacity utilisation to reach 90% by November-end.

Outlook

We maintain BUY on NCC with a target price of Rs 60/sh as (1) core EPC valuation is moderate at 8x Sep-22E EPS and (2)there isimproved visibility on net executable orderbook after removal/descoping of AP orders (3.6x book to bill ratio on FY20 revenue). Key risks to our estimates: (1) deterioration in NWC days and (2) weak real estate monetisation.

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