Hold NCC; target of Rs 27: ICICI Direct

ICICI Direct's research report on NCC

NCC’s topline declined 35.6% YoY to Rs 2182 crore, impacted by slower execution and impact of Covid-19. EBITDA came in at Rs 280.5 crore, down 29.5% YoY. The consequent margin, was higher at 12.9% (up 112 bps YoY) driven by a better segmental mix with contribution from higher margin segments, variation claims and some arbitration awards. The company reported a PAT of Rs 110.4 crore, down 36.7% given the weak operating performance on a YoY basis.

Outlook

We note that NCC is currently trading at attractive 5.3x FY22E P/E. However, we would turn constructive only when we see improvement in execution. We have HOLD rating with a TP of Rs 27/share (3.5x FY22E EV/EBITDA).

NCC 01062020

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