ICICI Direct's research report on NCC
NCC reported a decent set of numbers in Q4FY21 with revenue growth of 20% YoY to Rs 2617.7 crore on a standalone basis. The topline growth was mainly driven by strong order book position and pick-up in execution. However, operating margin declined 179 bps YoY to 11.1% owing to higher sub-contracting expenses. Consequently, operating profit improved merely 3.3% YoY to Rs 289.7 crore. At the net level, a decent operating performance coupled with benign depreciation and interest cost has translated into 11.4% YoY growth to Rs 115.5 crore in adjusted PAT.
Outlook
Strong order book position and expected pick-up in execution is likely to drive NCC’s overall performance. Further, its stable operating margins and improvement in working capital cycle remain key positives. We retain our BUY rating with a revised TP of Rs 100/share (vs. Rs 110/share, earlier).
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