Q3FY21 Result Update - NCC Ltd - ICICI Direct

NCC's Q3FY21 performance was a mixed bag with strong order inflows but slower execution. Its standalone revenue in Q3FY21 fell 9.4% YoY to Rs. 1,918.4 crore, largely impacted by slower-than-expected execution. However, various cost-cutting initiatives (despite rise in raw material/commodity prices) drove operating margin performance (up 67 bps YoY to 12.5%). At PAT level, muted topline performance coupled with higher tax outgo translated to 47.2% YoY fall in adjusted PAT to Rs. 70.3 crore.

Valuation & Outlook

NCC has reported a mixed set of numbers in Q3FY21. However, we now turn constructive on the company given a) the strong order book position, b) expected pick-up in execution, c) stable margins, d) debt reduction, and e) improvement in working capital cycle. Therefore, we upgrade our rating from HOLD to BUY with a target price of Rs. 110/share (6x FY22E EV/EBITDA) (vs. earlier target price of Rs. 65/share).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_NCC_Q3FY21.pdf

Shares of NCC Limited was last trading in BSE at Rs.84.25 as compared to the previous close of Rs. 90.25. The total number of shares traded during the day was 1298240 in over 17003 trades.

The stock hit an intraday high of Rs. 90 and intraday low of 83.2. The net turnover during the day was Rs. 111920178.

Source : Equity Bulls

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