Buy NCC; target of Rs 98: Reliance Securities

Reliance Securities' research report onNCC

NCC’s reported performance has come in below the expectation as dismal revenue booking and higher exceptional items dragged earnings. Further, a lower than estimated order inflow aggravated the concern. Its top-line de-grew by 13% YoY to Rs 21.4bn (vs. our expectation of Rs 23bn), mainly owing to revenue loss in its electrical division in UP due to assembly elections.

Outlook

We believe that turnaround of international business, further divestment of non-core assets and improvement in order intake will be the key catalysts for NCC in near to medium-term. Thus, we maintain our BUY recommendation on the stock with a revised SOTP-based Target Price of Rs 98 (from Rs 100 earlier).

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