Buy NCC; target of Rs 90: ICICI Direct

ICICI Direct's research report on NCC

NCC’s topline declined 7.3% YoY to Rs 2,187.7 crore on account of weak execution in Q1FY20. EBITDA margins expanded 84 bps YoY to 12.2%. PAT declined 21.6% YoY to Rs 81.3 crore (our expectation: Rs 128.2 crore) mainly on account of weaker execution & higher interest cost (Rs 125.9 crore in Q1FY20 vs. Rs 117 crore in Q1FY19).

Outlook

Hence, we maintain our BUY recommendation on the stock with a TP of Rs 90/share (5x FY21E EV/EBITDA implying 9x FY21 EPS).

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