NCC Q4 Results Review - Strong Order Book To Drive Growth: Dolat Capital

Dolat Capital Report

NCC Ltd.’s Q4 FY24 result was a mixed bag with Ebitda/adjusted profit after tax in-line, however revenue and Ebitda margin came above and below our estimates respectively.

Revenue/Ebitda/APAT grew by 35.6%/20.3%/64.9% YoY to Rs 54.5 billion/Rs 5.1 billion/Rs 2.4 billion with Ebitda margin of 9.4%.

NCC targets order inflow of Rs 200-220 billion, revenue growth of >15% YoY with an Ebitda margin of 9.5-10% for FY25E. We expect revenue/APAT CAGR of 13.6%/29.3% over FY24-26E with Ebitda margin of 9.7%/9.9% for FY25E/FY26E.

We increase our earnings per share estimates by 7.0%/12.0% for FY25E/FY26E factoring higher execution. We have factored increased revenue visibility and earnings growth, however sustenance of growth on existing high order inflow for FY25E/FY26E remains a key factor to watch-out.

The stock has run up by ~15% since our last result update on February 08, 2024, leaving limited upside.

Accordingly, we maintain ‘Accumulate’ rating with revised target price of Rs 275 based on 15 times FY26E EPS. Considering robust performance on a high base, we assign higher multiple of 15 times versus earlier 13 times.

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