Shares of NCC hit an over three-year high of Rs 106.36, as they rallied nearly 5 per cent, on the BSE in Friday's intra-day trade. At 01:25 PM, the stock of the civil construction company was trading 3 per cent higher, as compared to 0.07 per cent decline in the S&P BSE Sensex. It was quoting at its highest level since June 2019.
Thus far in the month of March, the market price of NCC has surged 19 per cent after the company announced it received three new orders aggregating to Rs. 2,374 crore (excluding GST) in the month of February 2023.
Of these, NCC said the one order valuing Rs. 1,224 crore, relates to transportation division; one order valuing Rs. 830 crore, relates to water & environment division; and one order valuing Rs. 320 crore, relates to mining division. These orders were received from the state government agencies, and PSU and does not include any internal orders, the company said.
Meanwhile, in the past six months, the stock has zoomed nearly 50 per cent, as compared to 2 per cent decline in the S&P BSE Sensex.
NCC is one of the leading construction companies in India with a presence across varied verticals of the infrastructure space like buildings, roads, water, mining, and electrical. Consolidated order book is robust at around Rs. 45,000 crore.
Analysts at ICICI Securities have a ‘buy’ rating on NCC with a target price of Rs. 120 per share. Strong execution, and management guidance of continued traction along with margin improvement prompts us to raise our earnings estimates, and maintain 'BUY' rating on the stock, the brokerage firm said.
Overall, the management believes around Rs. 20,000 crore of order inflows during FY23 is a possibility, with over Rs. 17,300 crore worth orders already received, including L1 till date. In terms of execution, the company has maintained its topline guidance at ~30 per cent YoY growth during FY23 to be driven by higher executable order book, and pick-up in execution with 100 per cent operating efficiency. Further, the margins are likely to improve (20-30 bps in Q4), given the benign raw material prices.
Going forward, the management expects the gained momentum in the order inflows to continue with its strong emphasis on buildings: affordable housing, water: higher traction being witnessed in Jal Jeevan mission, roads and expressways, metro and railways and mining segments, the brokerage firm said.
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