Shares of construction company NCC Ltd., recovered from the day's low to trade with gains after its Joint Venture with J Kumar Infraprojects won an order worth Rs 6,300 crore from the BMC (Brihanmumbai Municipal Corporation). Notably, this order's value constitutes approximately a third of the company's total market capitalisation, which stands at over Rs 9,000 crore.
The contract encompasses the design, construction, and operation of twin tunnels stretching from Film City in Goregaon, Mumbai to Khindipada in Mulund. The project also entails the construction of a box tunnel at Film City, along with associated electrical and mechanical works.
NCC holds a majority stake of 51 percent in this partnership, with J Kumar controlling the remaining 49 percent. Based on the contract's total value, NCC's share amounts to Rs 3,213.55 crore.
The project is slated to span five years in terms of construction, followed by a 10-year commitment for operation and maintenance. It's important to highlight that the promoters and entities within the promoter group do not hold any stake or interest in the Joint Venture that successfully secured this significant project.
In an interaction with CNBC-TV18 last month, the company said that it is anticipating orders worth Rs 26,000 crore this financial year. It is also projecting revenue to grow at 20 percent this financial year. Neerad Sharma, Head of Strategy at NCC, said that the company maintains a strong order book position, which currently stands at Rs 60,000 crore.
"Our project sites are fully operational, and we are well confident to state that the company is on track to achieve the projected 20 percent revenue growth," Sharma added.
Shares of NCC have recovered nearly 4 percent from the day's low to trade 0.9 percent higher at Rs 150.75. The stock has gained 65 percent so far in 2023.
The stock of J Kumar Infra has also extended gains post the order win. The stock is now trading 3.5 percent higher at Rs 408.
(Edited by : Akanksha Upadhyay)
First Published: Sept 22, 2023 12:40 PM IST
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