Hold NBCC; target of Rs 220: ICICI Direct

ICICI Direct's research report on NBCC

In terms of colonies redevelopment projects, for Nauroji Nagar, NBCC received a strong response in Q1FY18 and was able to sell properties worth Rs 1100 crore. Revenue booking for the Nauroji Nagar is expected to start from Q3FY18 onwards. For Netaji Nagar, the company would begin the sale and construction by Q4FY17 while for Sarojini Nagar, it expects to book revenues Q1FY19 onwards.

Outlook

Given the opportunities and order book in place, we would like execution to be ramped up. Furthermore, given the rich valuation of the stock (currently trading at 31x FY19E EPS), we maintain our HOLD rating on the stock with an SOTP based revised target price of Rs 220 (32x FY19E EPS).