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Centrum Broking Report
NCC Ltd. reported weak set of results for Q2 FY25 as heavy monsoon, delay in getting approvals in several projects and slow execution in JJM projects, smart meter projects and change in alignment in GMLR project resulted in revenue coming in 7% below our estimate.
Margins at 9% were below our estimate of 9.5% resulting in 16%/40% YoY drop in Ebitda/PAT. Nevertheless, the management has maintained its guidance for FY25 of 15% revenue growth and 9.5-10% margins. Order inflow remained healthy with inflow of Rs 47.6 billion in Q2 and the company is level-one for orders worth Rs 92 billion.
Given the strong order pipeline of Rs 2.1 trillion, we believe the company can surpass its order inflow guidance of Rs 200-220 billion.
We have tweaked our estimates for FY25 and FY26 and introduce FY27 numbers. We have moved our valuation forward to Sep-26 to arrive at our revised target price of Rs 310 (Rs 280 earlier). We upgrade the stock to Reduce from Sell.
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