NCC zooms over 6% on positive management commentary, CLSA sees 21% upside

After the quarterly financial earnings, the company management said that its order book jumped by 54% year-on-year to ₹61,800 crore.

The fresh Q2 order inflow of ₹12,289 crore (up by 4.3 times) was boosted by the smart meter order from Maharashtra.

The management maintained the revenue growth guidance of 20% for FY24E with an upside risk to order. The company expects to exceed the ₹26,000 crore order inflow guidance for FY24 by ₹3,000 crore to ₹4,000 crore.

NCC reported a 39.9% growth in revenue at ₹4,719.6 crore for the July-September quarter compared to ₹3,373.4 crore in the year-ago quarter.

Operating profit, or Earnings Before Interest Tax Depreciation and Amortisation (EBITDA), was down 2.1% YoY at ₹303.7 crore in the September quarter against ₹310.1 crore in the year ago period. Margin was at 6.4% in Q2 of FY24 against 9.2% a year ago.

Net profit was down 37.1% to ₹86.5 crore in Q2FY24 as against ₹137.5 crore a year ago.

In the second quarter, the company’s numbers were boosted by an arbitration award of ₹200 crore against net receivables of ₹600 crore in the books related to a dispute with Singapore-based Sembcorp Industries.

: Neerad Sharma, Head of Strategy at NCC, delves into the Q2FY24 performance of the company.

The company also received a settlement agreement for a road EPC contract worth ₹150 crore.

Brokerage Antique stated that NCC was boosted by the one-time impact of ₹200 crore on revenue/ EBITDA and ₹150 crore on net profit during the quarter.

Brokerage CLSA stated that the highest-ever backlog, led by a large smart meter, water, and urban infra orders.

The government’s water and urban infra programmes should create years of growth visibility, the brokerage noted.

NCC Ltd shares were trading higher by 4.07% at ₹163.75 per share on BSE at 12.28 PM.