India’s civil construction sector is rapidly expanding, projected to reach Rs 25.31 trillion in 2024 and Rs 39.10 trillion by 2029, with an annual growth rate of 8.8 percent. Driven by government infrastructure investments and urbanization, India is set to become the world’s third-largest construction market by 2025, valued at $1.4 trillion.
With a market capitalization of Rs 14,594.29 crore, the shares of NCC Ltd were trading at Rs 232.35 per share, increasing around 0.61 percent as compared to the previous closing price of Rs 230.95 apiece.
Brokerage Recommendations
CLSA, one of the well-known brokerages globally, has given an ‘outperform’ rating on this Infra stock with a target price of Rs 315 apiece, indicating a potential upside of 36 percent from Wednesday’s price of Rs 232.35 per share.
The brokerage noted that NCC delivered a strong Q4, marked by stellar order inflows that boosted its order backlog by 21 percent year-on-year. Despite flat execution, a 100 basis points improvement in margins led to a 20 percent rise in net profit compared to the same quarter last year.
NCC’s order backlog rose 29 percent sequentially to Rs 71,500 crore, aided by resumed order inflows in Andhra Pradesh. However, with guidance indicating slower execution and margin recovery, CLSA has cut its FY26 and FY27 EPS estimates by 10 percent and 12 percent, respectively, reflecting near-term caution.
CLSA highlighted that NCC remains the most liquid stock among water-theme plays, with 17 percent of its FY25 order backlog from this segment. The brokerage added that NCC is well-positioned to benefit from the Modi 3.0 capex cycle, supported by its strong order book and underleveraged balance sheet.
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Financial And Operational Highlights
Looking forward to the company’s financial performance, revenue fell by 5 percent from Rs 6,485 crore in Q4FY24 to Rs 6,131 crore in Q4FY25. During the same period, net profits jumped by 11 percent from Rs 239 crore to Rs 265 crore.
In FY25, NCC derived 98.8 percent of its revenue from construction, with NCC Limited contributing 86.5 percent, Pachhwara Coal Mining 12 percent, and other subsidiaries 0.3 percent. Real estate, via NCC Urban Infrastructure, contributed just 1.2 percent, highlighting NCC’s core focus on construction and infrastructure-related activities.
NCC’s diverse client portfolio includes major government bodies, metro rail corporations, PSUs like Indian Oil and NBCC, and private players like Adani. It serves sectors such as water, power, transportation, defense, and urban infrastructure, highlighting its strong presence in India’s infrastructure ecosystem.
In FY25, NCC achieved a record annual order inflow of Rs 32,888 crore, surpassing its guidance with major wins in buildings, T&D, and irrigation. Its consolidated order book hit an all-time high of Rs 71,568 crore, ensuring strong revenue visibility for the coming years.
NCC Limited secured contracts for the Ken-Betwa river interlinking project, highlighting growth potential in the sector. Its smart meter projects in Maharashtra and Bihar are progressing well, with substantial installations completed in Bihar, reinforcing its presence in India’s infrastructure and utility sectors.
Written- Abhishek Singh
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