Buy NCC, target price Rs 105: Anand Rathi

Anand Rathi has buy call on NCC with a target price of Rs 105.0. The current market price of NCC is Rs 70.85.
Time period given by analyst is one year when NCC Ltd. price can reach defined target.

NCC Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 4393.94 Crore) operating in Construction sector.


NCC Ltd. key Products/Revenue Segments include Income From Contracts and Other Operating Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 3032.84 Crore, up 16.61 % from last quarter Total Income of Rs 2600.87 Crore and up 41.02 % from last year same quarter Total Income of Rs 2150.69 Crore. Company reported net profit after tax of Rs 83.77 Crore in latest quarter.

Investment Rationale
On the stronger-than-expected orders, Q3 pace of execution and contained finance costs, the brokerage raises FY22e earnings ~13%. FY23e is ~5% higher, and FY24e, ~6%. On revised estimates, the stock (excl. investments) is available at an EV/EBITDA of 4.5x FY23e and 4.1x FY24e. Risk: Considerable deterioration in the working-capital cycle.

Promoter/FII Holdings
Promoters held 19.7 per cent stake in the company as of Sept 30, 2020, while FIIs held 9.8 per cent, DIIs 12.2 per cent and public and others 58.3 per cent.