Buy NCC; target of Rs 78: Firstcall Research

Firstcall Research's reserach report on NCCNAGARJUNA CONSTRUCTION COMPANY LIMITED now know as NCC Ltd was established in 1978 and promoted by Shri A V S Raju, Shri K I Narayana, Shri A A V Ranga Raju and Shri A G K Raju and the companies corporate office is located in Hyderabad. The Company has a well diversified business portfolio spread across ten business verticals viz., Buildings & Housing, Roads, Water & Environment, Electrical, Irrigation, Metals, Power, International, Mining and Railways. The Company has more than three decades of experience in construction sector and is recognized as one of the key construction players in the country. It has carried out variety of projects across the country and also in international geographies. The Company’s clientele consists of several reputed public and private sector organizations.At the current market price of Rs. 68.20, the stock P/E ratio is at 36.57 x FY16E and 25.39 x FY17E respectively.Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.1.86 and Rs.2.69 respectively.Net Sales and net Profit of the company are expected to grow at a CAGR of 13% & 33% over 2014 to 2017E respectively. On the basis of EV/EBITDA, the stock trades at 5.00 x for FY16E and 4.30 x for FY17E.Price to Book Value of the stock is expected to be at 1.01 x and 0.92 x respectively for FY16E and FY17E. We recommend ‘BUY’ in this particular scrip with a target price of Rs.78.00 for Medium to Long term investment.

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