NCC continues to be fundamentally strong with a record-high order book, healthy bidding pipeline of Rs 2.5 lakh crore. However, near-term execution headwinds, high unbilled revenue, and rising leverage temper the growth outlook.
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IDBI Capital Report
NCC Ltd. reported a soft quarter as execution headwinds and working capital strain weighed on results. Consolidated revenue declined 12% YoY to Rs 45.8 billion vs 52.2 billion in Q2 FY25 with Ebitda at Rs 3.9 billion, reflecting a margin of 8.7% versus 8.5% last year. PAT stood at Rs 1.55 billion with a net margin of 3.4%.
On a standalone basis, revenue fell 16% YoY to Rs 37.7 billion while PAT dropped 37% YoY to Rs 1 billion. H1 FY26 revenue was Rs 97.9 billion, down 9.3% YoY, reflecting a calibrated execution approach amid delayed project mobilization, extended monsoons, and elongated client payment cycles.
Management cited heavy rainfall across multiple states, ROW delays, and slower receipts in water/JJM projects as key drags on turnover.
Order inflows during the quarter remained robust at Rs 62.2 billion up 31% YoY, driving a record consolidated order book of Rs 719.6 billion up 37% YoY as of September 2025.
We maintain our rating to Buy, revising the target price to Rs 225, valued at 12x FY27E earnings per share.
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