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Kotak Securities
NBCC India (Buy)
CMP: ₹197.95
Target: ₹229
NBCC (India) Ltd, a Navratna PSU with major presence in project management consultancy space in building segment is focussing on execution of its order book. In the last four years (FY15-18E), the company has grown its order book by about 4x to about ₹80,000 crore which gives strong revenue growth visibility for the next five years. On the other hand, the revenue has grown less than 1.5x in the same period. The company is focussing on execution and expects strong revenue growth in FY19E as most of the redevelopment projects would contribute meaningfully in the year.
NBCC has begun work on ₹10,000 crore of new projects in the past six 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 charges on stock performance.
We upgrade our rating on the stock to ‘buy’ (from ‘accumulate’ earlier).
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