Rakesh Jhunjhunwala-backed multibagger PSU stock sheds 42% in six months: Axis Securities eyes 10% upside: Buy or sell?

Robust order book to drive revenue growth: As of 31st Dec’24, the company’s order book stood at ₹55,548 Cr across various segments, providing revenue visibility for the next 2-3 years. With its strong execution track record, the company is well-positioned for steady revenue growth. We expect it to achieve a CAGR of 14%/17%/23% in Revenue/EBITDA/APAT, respectively, over FY25E-27E.

 Strong bidding pipeline: The company has a bidding pipeline of ₹2.45 Lc Cr across all segments and states. For FY25, it expects an order inflow of ₹20,000-22,000 Cr across all segments. As of 9MFY25, the order inflow stood at ₹13,600 Cr, with the company being L1 in projects worth ₹8,000-10,000 Cr, which it expects to materialize by Q4FY25.

 Diversified portfolio: The company’s business portfolio is diversified across T&D (19%), Buildings (38%), Transportation (19%), Water & Railways (10%), Irrigation (9%), and Mining (5%). It currently has two smart meter projects in Bihar and Maharashtra worth ₹7,800 Cr. In Q3FY25, NCC secured a river interlinking project, an ambitious initiative by the Government of India, and expects more orders from this segment.

Delay in Project Execution

The stock is trading at 15x/13x/10X its FY25E/FY26E/FY27E EPS respectively. We recommend a BUY rating on the stock with a TP of ₹213/share, implying an upside of 10% from the CMP.

NCC Ltd, a Hyderabad-based construction company, operates across multiple segments, including roads, buildings, irrigation, water and environment, electrical, metals, mining, and railways. In addition to executing projects across India, the company has an international presence through its subsidiaries in Muscat and Dubai. NCC Ltd stands out as one of the largest listed construction companies in India by revenue, backed by a well-diversified portfolio and strong execution capabilities.