NCC

Poised for Growth with Accelerating Project Execution

stock is positioned for a rebound as the company is set to see accelerated growth in project execution from the current quarter onwards. This follows a period of subdued performance due to external factors, and the company's strong order book and financial health provide a solid foundation for future growth. → Recent Performance and Future Outlook: After four quarters of muted execution, NCC's revenue in Q1 FY26 declined by 6%. This was primarily due to delays in project approvals and payments from the government. Despite the slow start, the company has maintained its 10% top-line growth guidance for FY26, signaling a significant pickup is anticipated from Q2 onwards as payments and project approvals improve. A large portion of new orders worth ₹21,000 crore were secured in March 2025, and work on these projects is now set to commence, driving the projected acceleration. → Robust Order Book and Strong Pipeline: As of June 2025, NCC holds a substantial order book of approximately ₹70,000 crore, which is 3.2 times its FY25 revenue. This provides a strong revenue visibility for the medium term. The company has already secured projects worth ₹7,500 crore this fiscal year and is the lowest bidder for an additional ₹5,000 crore in projects. A massive project pipeline of ₹2.5 lakh crore for the remainder of the fiscal year further reinforces the strong growth prospects. → Valuation and Financial Strength: NCC's balance sheet is robust, with a low debt-to-equity ratio of around 0.3x, which will ensure smooth project execution. The company has maintained its EBITDA margin guidance at 9-9.25% for FY26. Following a recent 15% correction, the stock is trading at an attractive 12 times FY27 projected earnings, placing it at the lower end of its historical valuation range and presenting a compelling entry point for investors.