Geojit is bullish on NCC has recommended buy rating on the stock with a target price of Rs 146 in its research report dated May 30, 2018.
Geojit's research report on NCC
NCC Limited (NCC) is one of the largest well diversified construction companies in India with having a foothold in every segment of construction sector. FY18 Order book grew by 80% YoY (4.3x TTM revenue) stimulated by 174% YoY rise in fresh orders. Q4FY18 revenue grew by 12% (below estimate), due to 11% decline in road project execution. EBITDA margin improved by 457bps YoY to 12.7%, this includes one-time bonus of Rs21cr from NHAI, while excluding the same margins stood at 11.9%. Management guided 45% growth in top-line for FY19 due to higher mix of short cycle orders to be completed in 2years. We increase FY19E/20E PAT estimate by 18%/13% in expectation of robust execution.
Outlook
At the CMP we value standalone business at a PE of 15x FY20E EPS and BOT & real estate at 1xP/B to arrive at SOTP target price of Rs146 and revised our rating to BUY.
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