- 09 Nov 2022
- ICICIdirect Research
NCC LTD POSTS STRONG EXECUTION, DRIVES TOPLINE, BOTTOMLINE BEAT; ALBEIT MARGINS REMAIN SOFT
NCC - 303 Change: 1.05 (0.35 %)News:
NCC's revenue on a standalone basis has improved 36.6% YoY to Rs 3,003.7 crore backed by its strong order book position and pick-up in execution. However, operating margin was at 9.6% (down 115 bps YoY), possibly had partial impact of higher raw material prices. Effectively, EBITDA at Rs 288.8 crore, was up 22.1% YoY. At the net level, benign margin performance coupled with higher depreciation and interest cost translated into 16.8% YoY growth in PAT (to Rs 121.8 crore)
View:
While execution has been strong in the last couple of quarters, a margin recovery is awaited. It has secured orders aggregating to Rs 2,661 crore during Q2FY23, which has kept its order book at an elevated level of Rs 40,020 crore as on September 30, 2022. Going forward, NCC is well poised for growth ahead given a) the strong order book position, b) expected pick-up in execution, and c) debt reduction. However, improvement in margins needs to be monitored
Impact:
Neutral