The shares of a smallcap construction and infrastructure stock under Rekha Jhunjhunwala portfolio plunged as much as 14.4 percent on Friday’s trade after the company’s management cut its guidance on revenue growth and margins after disappointing Q3 results.
Share Price Movement
The shares of NCC Ltd, with a market capitalization of Rs 13,366.85 Crores, crashed as much as 14.4 percent in today’s trade marking an Intraday low of Rs 203 per share. As of noon, the shares slightly retreated to Rs 211 per share which was around 11 percent down from its previous close of Rs 237.5.
The shares generated returns of 186 percent in 3 years and 299 percent in 5 years respectively.
Reason for the Fall
The company reported a 12 percent YoY decline in Net profits from Rs 231 Crores in Q3FY24 to Rs 206 Crores in Q3FY25. However on a quarterly basis, Net Profits increased by 18 percent from Rs 175 Crores in Q2FY25.
Its Revenue from Operations increased marginally by 1.6 percent YoY from Rs 5,260 Crores in Q3FY24 to Rs 5,344 Crores in Q3FY25. On a quarterly basis, it rose 2.8 percent from Rs 5,196 Crores in Q2FY25.
Revenue from the construction segment increased slightly by 2 percent from Rs 5,183 Crores in Q3FY24 to Rs 5,286 Crores in Q3FY25. However, revenue from the real estate segment declined by 9 percent from Rs 64.5 Crores to Rs 58.6 Crores over the same period.
Its EBITDA declined by 12.7 percent from Rs 505 Crores in Q3FY24 to Rs 441 Crores in Q3FY25.
The company’s order book stood at Rs 55,548 Crores as of Q3FY25, and marked an order inflow of Rs 8,440 Crore for this quarter.
The management has cut its FY25 guidance on revenue growth from 15 percent earlier to 5 percent. The guidance on the margins has been cut from 9.5 -10 percent earlier to 9.25 percent.
Brokerage Targets
JM Financial has cut its FY25, 26, and 27 Earnings Per Share estimates for NCC by 20 percent, 13 percent and 11 percent respectively. Also the brokerage has slashed its price target on NCC to Rs 330 from Rs 365 earlier.
Nuvama slashed its FY25, 26, and 27 Earnings Per Share estimates for NCC by 15 percent, 8 percent and 5 percent respectively, and PE multiple from 22 times to 17 times. Also the brokerage maintained its ‘BUY’ rating with a revised target price of Rs 282 from Rs 382 earlier.
About NCC Ltd
NCC Ltd incorporated in 1978, is engaged in the infrastructure sector, primarily into construction of industrial and commercial buildings, housing projects, roads, bridges and flyovers, water supply and environment projects, mining, power transmission lines, irrigation and hydro thermal power projects, real estate development, etc.
Rekha Jhunjhunwala had a 10.63% stake in NCC as of Q3FY25 , which is the same figure as that in Q2FY25.
Written By Adhvaitha Nayani
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