NCC

’s Growth Outlook Improves with JJM Payments and Clearances

reported its fifth consecutive weak quarter in Q3FY26, with revenues down 9% YoY due to payment delays in Jal Jeevan Mission (JJM) water projects and slow approvals in other contracts. Despite execution challenges, EBITDA margins improved modestly on cost controls. With payments beginning to flow from January 2026 and clearances now in place, NCC expects execution to pick up sharply in Q4, targeting revenue levels comparable to Q4FY25. A strong order book and government capex push provide visibility for growth beyond FY26. Financial Performance - Revenue: ₹X crore, down 9% YoY. - EBITDA margin: Improved 80 bps YoY on cost control. - Net debt: Increased by ₹1,650 crore YoY, driven by delayed payments and capex. - Interest expenses: +19% YoY, weighing on profitability. - Exceptional charge: ₹34 crore due to labour code provisions. - Net profit: Declined 37% YoY. Execution Outlook - JJM payments: Began in Jan 2026 (₹560 crore received vs ₹3,700 crore outstanding). - Significant receipts expected in Feb–Mar 2026. - Clearances obtained for delayed projects; execution to accelerate in Q4. - Management targets to match Q4FY25 revenues after weak 9MFY26. Order Inflows & Book - Q3FY26 inflows: ₹12,430 crore. - 9MFY26 inflows: ₹22,311 crore; YTD FY26 (Apr–Jan) inflows: ₹24,768 crore, at upper end of guidance. - Order book: ₹79,571 crore as of Dec 2025, ~3.9x FY26 projected revenues. - Diversified across geographies and infrastructure verticals. Sector Tailwinds - FY27 Union Budget: Capex up 12% YoY to ₹12.2 lakh crore. - Higher allocations for roads, railways, urban infra, and JJM. - Centre’s transfers to states up 30% YoY to ₹2.26 lakh crore, boosting EPC pipeline. - NCC well-positioned as majority of revenues come from government projects. Valuation & Investor View - Stock corrected 44% since CY2025, underperforming Nifty (+7%). - Execution recovery, strong order book, and government capex thrust support re-rating. - Recommendation: Add (Overweight).