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  • Stock recommendation: NBCC (India) Ltd – BUY – TP Rs.95

    Publish date: August 16, 2018

    Result Update

    NBCC Q1FY19 results disappointed at operating level though PMC revenue was ahead of our estimates.

    Key Highlights

    • The standalone net revenue for the quarter grew by 29% yoy to Rs 16.3 bn (Vs our estimates of 20% yoy growth to Rs 15.2 bn) on strong revenue from PMC segment. PMC segment which contributes the largest pie, reported 21% yoy growth as against our estimates of 15% yoy growth.
    • EBITDA for the quarter was Rs 629 mn, declined by 3% yoy despite strong execution, due to decline in EBIT margin in PMC segment. PAT for the quarter grew by 21% yoy to Rs 677 mn due to higher other income.
    • NBCC has a robust total order book of Rs 800 bn which gives strong revenue growth visibility for the next 5 years. The company is targeting to add Rs 250 bn of new orders in FY19E.

    Valuation & Outlook

    • The company has maintained guidance of 30% yoy growth in revenue despite challenged faced by its large size redevelopment project. We have cut our earnings estimates for FY19E and FY20E factoring in execution delay redevelopment of 3 colonies in Delhi due to legal hurdles.
    • The stock is presently trading at PE of 31.1x and 24.7x based on FY19E & FY20E revised EPS of Rs 2.3 and Rs 2.9 respectively. We maintain Buy on the stock with revised target price of Rs 95 (Vs Rs 108 earlier).


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