Buy NCC, target Rs 165: Phillip Capital (India)

Phillip Capital (India) has a buy call on NCC Ltd. with a target price of Rs 165.0 . The current market price of NCC Ltd. is Rs 99.65 Time period given by the brokerage is a year when NCC Ltd. price can reach defined target. . NCC Ltd., incorporated in the year 1990, is a midcap company with a market cap of Rs 5946.40 crore.

Investment rationale by Phillip India

Last week we organized a site visit for our clients, to a mass housing project in AP, being developed by NCC. The site is part of the Prandhan Mantri Aawas Yojna (PMAY) project, awarded by the Andhra Pradesh Township Infrastructure Development Corporation Ltd (APTIDCO). The project involves construction of ~20,000 flats for EWS (Economically Weaker Section), at 8 locations in 15 months. We came back highly impressed with the scale and pace of execution on the project and its overall progress. On other projects in the orderbook, the management indicated few initial hiccups in execution on some projects – but remains confident of achieving its guided topline (Rs 110bn) with margins of 10.5% in FY19. We maintain BUY.