Phillip Capital (India) has given a buy recommendation on NCC with a target price of Rs 180.

Shares of NCC traded at Rs 114.9 around 3 pm on 27 May, 2019. The brokerage has set a one-year horizon for the stock to hit the target price.

“We maintain our FY20 and FY21 estimates, expecting 20 per cent and 15 per cent growth in topline in FY20 and FY21, respectively. We continue to value the company at 13 times FY21 PE,” said the brokerage.

NCC delivered strong results, yet again – bang in line with our estimates, the brokerage added.

Topline grew by 42 per cent, margins climb 31 per cent and PAT surged 70 per cent. The company also managed to beat its FY19 revenue guidance of Rs 11,000 crore (clocking Rs 12,100 crore) and order inflow guidance of Rs 14,000 crore (clocking Rs 25,600 crore).

As per the brokerage, the biggest positive was in the balance sheet, with significant improvement in working capital (down to 131day from 165 days YoY, including all OCA & OCL) and debt (down to Rs 2,000 crore from Rs 2,100 crore QoQ).

As subsidiaries performance continued to improve, ROEs improved to 12.5 per cent from 7.5 per cent last year.

“All in all, the company delivered on all fronts, and has further strengthened the foundations of a strong business. We remain positive on the NCC story, of strong earnings growth, driven by robust execution and its presence across infrastructure segments,” said the brokerage.


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