NCC Ltd - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 83; MCap: Rs. 5,086 crore)

NCC's Q4FY21 performance missed our expectations on all parameters despite having strong order book position, and desired labour availability on most of its projects.

Q4FY21 Earnings Summary

Revenue during Q4FY21 was up 20% YoY to Rs. 2617.7 crore (vs. I-direct estimate of Rs. 2,748.3 crore with ~26% YoY growth) on a standalone basis with growth mainly driven by NCC's strong order book position and pick-up in execution, albeit lower than our expectations. FY21 revenues was at Rs. 7255.7 crore, with decline of 11.7% YoY

Operating margin declined 179 bps YoY to 11.1% (vs. I-direct estimate of 11.9%), owing to higher sub-contracting expenses. Consequently, operating profit improved merely by 3.3% YoY to Rs. 289.7 crore

Decent operating performance coupled with benign depreciation and interest cost has translated into 11.4% YoY growth (to Rs. 115.5 crore) in adjusted PAT (vs I-direct estimate of Rs. 134.1 crore; 21.5% YoY). Lower PAT was owing to miss on revenues and EBITDA

NCC has secured orders worth Rs. 1,730 crore/Rs. 18,943 crore during Q4FY21/ FY21 respectively, which has kept its FY21-end order book at an elevated level of Rs. 37,911 crore, 5.2x FY21 book to bill

The overall revenues growth should revive given a) the strong order book position and b) expected pick-up in execution, However, we await management commentary on future outlook, order inflows target, impact of state wise lockdown on key projects, status on Andhra Pradesh orders, receivables and net debt.

Shares of NCC Limited was last trading in BSE at Rs.80.95 as compared to the previous close of Rs. 83.4. The total number of shares traded during the day was 475658 in over 3705 trades.

The stock hit an intraday high of Rs. 89 and intraday low of 79.9. The net turnover during the day was Rs. 39400554.

Source : Equity Bulls

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