NCC - Beneficiary Of Capex Upcycle: IDBI Capital Initiates Coverage

IDBI Capital Report

NCC Ltd., has pedigree of executing infrastructure project and has seen multiple capex cycle in India. We expect upcycle in its order inflow in FY23E to continue given continued push for infra spend by the government (exh 34-37).

Commodities have weekend off-late and this could upkeep its Ebitda margins in FY24E.

Balance sheet largely has working capital debt and NDER at 0.2 times could support execution of its order book of Rs 419 billion (three times FY23E revenue).

Stock trades at 7x FY25E earnings per share and we estimate EPS growth of 22% YoY / 26% YoY in FY24E / FY25E. NCC price-to-earnings valuation at 30% discount to it’s infra peers (exh 25) could narrow on improved execution.

Risk is slow-down in government capital outlay.

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