Company Update: NBCC (India) Ltd - BUY - TP Rs.229 - Kotak

NBCC (India) Ltd, a Navratna PSU with major presence in project management consultancy space in building segment is focusing on execution of its order book. In the last 4 years (FY15-18E), the company has grown its order book by ~4x to ~Rs 800 bn which gives strong revenue growth visibility for the next 5 years. On the other hand, the revenue has grown less than 1.5x in the same period. The company is focusing on execution and expects strong revenue growth in FY19E as most of the redevelopment projects would contribute meaningfully in the year. It has begun work on Rs 100 bn of new projects in the past 6 months which will be completed in the next two years. Further, it has strong pipeline of new projects from development of railways land, armed forces land, Dharavi, etc which would support its future order book. We believe that the company's top management getting clean chit would be sentimentally positive and ends the overhang of corruption changes on stock performance. The stock is presently trading at PE of 34.7x and 23.3x based on FY19E & FY20E EPS of Rs 5.6 and Rs 8.4 respectively. We upgrade our rating on the stock to BUY (from Accumulate earlier).

Shares of NBCC (India) Ltd was last trading in BSE at Rs.197.95 as compared to the previous close of Rs. 201.2. The total number of shares traded during the day was 145219 in over 1449 trades.

The stock hit an intraday high of Rs. 201.3 and intraday low of 196.8. The net turnover during the day was Rs. 28873951.

Source : Equity Bulls

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