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Entry Price

86.00

Target

95.00

Recommend Date

14-02-2020

Return

10.47 %
BUY

Date : 14-02-2020

NCL Industries’ 9MFY20 performance has been weak with volumes declining ~16% YoY, amid construction and infrastructure activity in the company’s major markets (Andhra Pradesh & Telangana) facing liquidity issues and contracts cancellation by the recently elected state government in Andhra Pradesh. The cement division is a major revenue generator for NCL, contributing ~80% of revenues. The sharp decline in volumes was partly softened by higher blended realisations (up 16% YoY) led by price hikes taken in the first half of 2019; thus containing the drag in YTD performance. Higher realisations and benign input costs supported margin expansion during the period by 570 bps YoY.