Buy NCC, target Rs 165: Phillip Capital (India)
Phillip Capital (India) has a buy call on NCC with a target price of Rs 165.
The current market price of NCC is Rs 98.
Time period given by the brokerage is one year when NCC price can reach the defined target.
Phillip Capital's view on the company:
NCC delivered strong set of numbers – beating estimates. Topline/Margins/PAT were all ahead of expectations. Orderbook remained strong at 4x book-to-sales – enabling the management to maintain its FY19 guidance of 45% yoy topline growth. Margins continue their upward trajectory, as older low-margins orders get replaced by new high-margins orders (and also GST impact). The highlight of the quarter though, was reduction in subsidiary losses – leading to similar PAT at standalone and consolidated levels. We expect the subsidiary losses to reduce significantly this year (Rs 1.5bn in FY18), as the company works to shut-down its Middle-East business. We remain positive on the NCC story, of strong earnings growth, driven by robust execution and its presence across infrastructure segments.
The current market price of NCC is Rs 98.
Time period given by the brokerage is one year when NCC price can reach the defined target.
Phillip Capital's view on the company:
NCC delivered strong set of numbers – beating estimates. Topline/Margins/PAT were all ahead of expectations. Orderbook remained strong at 4x book-to-sales – enabling the management to maintain its FY19 guidance of 45% yoy topline growth. Margins continue their upward trajectory, as older low-margins orders get replaced by new high-margins orders (and also GST impact). The highlight of the quarter though, was reduction in subsidiary losses – leading to similar PAT at standalone and consolidated levels. We expect the subsidiary losses to reduce significantly this year (Rs 1.5bn in FY18), as the company works to shut-down its Middle-East business. We remain positive on the NCC story, of strong earnings growth, driven by robust execution and its presence across infrastructure segments.
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