Buy NCC; target of Rs 131: Dolat Capital

Dolat Capital’s research report on NCC

We upgrade our revenue estimates by 8.2%/ 8.3% for FY19E/ FY20E considering 9MFY19 execution. NCC to post robust 59.9%/ 16.1%/ 10.0% revenue growth in FY19E/ FY20E/ FY21E led by compressed execution timeline (12-24 months) coupled with most of its robust order inflow of FY18/ YTDFY19 was in its core segments (‘Buildings & Roads’, ‘Water’ and Electrical). We have upgraded EBITDA margin by 36bps/ 15bps to 11.7%/ 11.5% for FY19E/ FY20E factoring recent better margin order inflow and 9MFY19 results. We expect 13.0% CAGR in Adj. PAT over FY19E-21E.


We factored debt level of `21.5 bn/ `23.2 bn/ `21.3 bn for FY19E/ FY20E/ FY21E vs. `13 bn (reduced post `5.5 bn QIP in Jan’18) for FY18 and `21.6 bn (Q3FY19). We considered `1.1 bn convertible warrants issue to promoter in FY19E. Considering robust revenue growth, expansion in EBITDA margin, healthy profit growth combined with attractive valuation, we maintain BUY on the stock with a downward SOTP of `131 (Exhibit 1).

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First Published on Feb 15, 2019 03:16 pm

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