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NCC – Weak Quarter; Guidance pruned

ICICIdirect Research 07 Feb 2025 DISCLAIMER

Weak Performance: NCC reported revenue from operations for Q3 FY25 at ₹4671 crore, down 1.6% YoY given slower pace of execution due to elections which led to elongated billing cycles. Subsequently, EBITDA reported at ₹409.5 crore was down 14.6% YoY along with margins reported at 8.8% YoY, down 130 bps YoY. PAT at ₹185.4 crore, was down 13% YoY given the muted execution.

Elections led weakness: The management has indicated that muted turnover was owing to slower pace of execution during Q3 largely led by state elections (Maharashtra and Jharkhand which together forms 46% of the order book) and unprecedented rainfall leading to elongated billing cycles. We highlight that execution recovery is likely only in FY26, with Q4FY25 being another muted quarter.

Guidance pruned; Order book Healthy: Subsequently, management has revised growth guidance downward to 5% (15% earlier) and margin guidance to 9.25% for the year (9.5% earlier). The orderbook stood at ₹51,834 crore as of Q3 FY25, 2.7x TTM book to bill. It has however maintained its order inflows outlook of ₹20000-22000 crore for the year, given it has achieved over ₹13500 crore worth order inflows for the year (₹8440 crore in Q3) and having L1 position worth ₹9000-10000 crore in pipeline.

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