NCC Limited is a prominent player in the Indian construction sector and is currently trading at a substantial discount of 22% from its 52-week high. Despite the dip, the company has strategically reduced its debt-equity ratio to 0.25, reflecting improved debt management, and maintains a formidable order book worth Rs. 52,370 crore across key infrastructure segments. With its diverse portfolio and strong growth in Q2 FY25, NCC Limited presents an exciting opportunity for investors looking to capitalize on value in a volatile market.
Stock Movement:
With a market capitalization of Rs. 17,805.73 crores, the shares of Nagarjuna Construction Company Limited (NCC) were trading at Rs. 283.45 per equity share, up nearly around 2.07 percent from its previous day’s close price of Rs. 277.20. The stock is down almost 22.24% from the 52-week high of Rs. 364.50.
Debt Management:
The company’s debt levels increased from ₹1,005 crore at the beginning of the year to ₹1,732.70 crore by Q2, with a net debt of ₹1,624.36 crore. Despite this, the debt-equity ratio improved to 0.25 from 0.26.
Order book of NCC:
NCC Limited recorded an order book of ₹52,370 crore in Q2 FY25, with segment contributions buildings at 37% (₹19,486 crores), transportation at 21%(₹11,151 crores), water & railways at 12% (₹6,071 crores), Electrical (T&D) at 21% (₹10,931 crores), mining at 7%, and irrigation & others at 2%.
The orders predominantly originate from Maharashtra (38%), Uttar Pradesh (16%), Karnataka (8%), Jharkhand (9%), and various other states (29%) as of Q2 FY25.
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Infrastructure projects:
NCC Limited is undertaking infrastructure projects worth over ₹22,000 crore across India. Key projects include the ₹5,756 crore advanced metering infrastructure (AMI) in Maharashtra, ₹2,167 crore Bangalore Metro Rail viaducts and stations, and ₹1,652 crore International Trade Towers in New Delhi. Other notable projects are a ₹3,833 crore wastewater treatment plant and ₹3,214 crore twin tunnels in Mumbai, along with a ₹2,199 crore horticulture market in Haryana and ₹2,467 crore residential project in Karnataka.
Clientele of NCC:
NCC Limited works with a diverse range of clients across multiple sectors. In transportation, it partners with DMRC, MMRC, Nagpur Metro, Pune Metro, Airports Authority of India, and NHAI. In utilities and water management, NCC collaborates with HMWSSB and state water departments. The company also serves industrial and energy leaders like Adani, Indian Oil, and POSCO E&C India, along with urban development authorities like CIDCO, HITES, and UPRNN.
Recent quarter results and ratios:
NCC Limited’s revenue has increased from Rs. 4,720 crore in Q2 FY24 to Rs. 5,196 crore in Q2 FY25, which has grown by 10.08 percent YOY. The net profit of Kalpataru Projects International Limited has also grown by 103.49 percent, from Rs. 86 crore in Q2 FY24 to Rs. 175 crore in Q2 FY25.
NCC Limited’s revenue and net profit have grown at a CAGR of 37.90 percent and 37.70%, respectively, over the last three years. In terms of return ratios, the company’s ROCE and ROE should be 22.1% and 11.4%, respectively. NCC Limited’s EPS is to be Rs. 13.3.
Shareholding pattern
In September 2024, NCC Limited had a majority stake held by the promoters at 22 percent, foreign institutional investors at 20.86 percent, domestic institutional investors at 12.34 percent, and the public at 44.78 percent.
Company Overview
NCC Limited is a leading Indian construction firm specializing in infrastructure projects, including industrial and commercial buildings, roads, bridges, and water supply systems. Operating across construction, real estate, and other segments, the company has a strong presence in India and internationally, delivering high-quality solutions in diverse sectors.
Written By – Nikhil Naik
Disclaimer
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