NCC Ltd Shares Dip Nearly 4% Amid September Quarter Earnings Report

Shares of NCC Ltd dropped nearly 4% in early trade on Friday after the infrastructure major released its earnings for the September 2024 quarter. The stock slipped 3.82% to ₹305.25 amidst broader market volatility. At the end of the September quarter, Rekha Rakesh Jhunjhunwala, wife of the late investor Rakesh Jhunjhunwala, held a 12.48% stake in the company, equating to 7.83 crore shares.

Financial Highlights

• Net Profit: Nearly doubled to ₹174.8 crore in Q2, up from ₹86.2 crore in the same period last year.
• Revenue: Grew 10% year-on-year, reaching ₹5,196 crore compared to ₹4,719.6 crore in the previous year.
• EBITDA: Increased by 45.8% to ₹443 crore from ₹303.7 crore.
• EBITDA Margin: Improved by over 200 basis points, rising to 8.5% from 6.4%.

Over five years, NCC’s share price has surged by 425% and risen 327.19% in the last two years. The company’s market cap now stands at ₹19,284 crore, with 2.77 lakh shares traded today, amounting to a turnover of ₹8.59 crore on the BSE.

Technical Indicators

The stock’s relative strength index (RSI) stands at 60.4, suggesting it is neither overbought nor oversold. NCC’s one-year beta is 1.9, indicating a high level of volatility.

Brokerage Recommendations

Nuvama
Nuvama has raised its price target to ₹382 from ₹368. “Strong execution and new opportunities in Andhra Pradesh are key positives. We maintain a ‘BUY’ rating with a revised target price of ₹382, projecting growth into Q2FY27E. NCC secured ₹4,760 crore in orders during Q2FY25, ending the quarter with an order book of ₹52,400 crore, a book-to-bill ratio of 2.7x. It is the lowest (L1) bidder in projects worth more than ₹9,000 crore, with a bid pipeline of ₹2.1 lakh crore. For FY25E, the company aims to secure orders worth ₹200–₹2200 crore (₹51.7 billion in H1FY25),” Nuvama noted.

HDFC Securities
Price Target: ₹363
“The company boasts a diversified order book and strong execution capabilities, along with a focus on debt reduction and improved working capital. NCC’s expertise across buildings, mining, railways, and environmental projects sets it apart. With government infrastructure initiatives, NCC is well-positioned to leverage growth in sectors like buildings, water infra, transportation, metros, defense, and airports. With a record-high order book and solid balance sheet, we project revenue, EBITDA, and PAT to grow at CAGRs of 16%, 21%, and 39.6%, respectively, from FY24-26E. Investors may consider buying in the ₹273-303 range, targeting ₹363 (18x FY26E EPS) by next Diwali,” HDFC Securities stated.

Company Overview

NCC Ltd is a key player in infrastructure, focusing on construction projects such as industrial and commercial buildings, housing, roads, bridges, water and environmental projects, mining, power transmission, irrigation, and real estate.