Geojit downgrades NBCC from accumulate to reduce
MUMBAI: Geojit has downgraded their ratings on infrastructure consultancy company NBCC from accumulate to reduce citing its premium valuation and also due to slowdown in large redevelopment projects.
While setting a target price of Rs 155 against the current market price of Rs 169 (Tuesday closing), Geojit in a note released on Tuesday said “Given slower pick-up in execution of large redevelopment projects and premium valuation, we downgrade to Reduce from Accumulate”.
NBCCs current order book backlog of Rs 75,000 crore (including re-development project of 3 colonies in Delhi worth Rs 25000 crore). Order book consists of 96% PMC including large re-development project and EPC & Real estate forms 4%. Management expects marketing work of the 3 colonies will start from last quarter of FY 2017. Further, NBCC was nominated as a land management agency (LMA) for disposal/ development of lands assets of sick PSUs.
Shares of NBCC fell about a percent so far this year as against Sensex gain of 8% during the same period.
For the nine months ended December 2017, NBCC reported a revenue growth of 12% YoY at Rs 3,933 crroe led by higher contribution from PMC (project management consultant) business. Revenue growth was lower largely due to lower execution of large redevelopment projects due to time lag for preparatory works and decline in real estate business.
While EBITDA margin improved by 40bps YoY to 4.9% led by lower operating cost, PAT grew by 7% YoY to Rs 176 crore.
While setting a target price of Rs 155 against the current market price of Rs 169 (Tuesday closing), Geojit in a note released on Tuesday said “Given slower pick-up in execution of large redevelopment projects and premium valuation, we downgrade to Reduce from Accumulate”.
NBCCs current order book backlog of Rs 75,000 crore (including re-development project of 3 colonies in Delhi worth Rs 25000 crore). Order book consists of 96% PMC including large re-development project and EPC & Real estate forms 4%. Management expects marketing work of the 3 colonies will start from last quarter of FY 2017. Further, NBCC was nominated as a land management agency (LMA) for disposal/ development of lands assets of sick PSUs.
Shares of NBCC fell about a percent so far this year as against Sensex gain of 8% during the same period.
For the nine months ended December 2017, NBCC reported a revenue growth of 12% YoY at Rs 3,933 crroe led by higher contribution from PMC (project management consultant) business. Revenue growth was lower largely due to lower execution of large redevelopment projects due to time lag for preparatory works and decline in real estate business.
While EBITDA margin improved by 40bps YoY to 4.9% led by lower operating cost, PAT grew by 7% YoY to Rs 176 crore.
