NBCC (India) Ltd. share price target

Q2FY19 revenue grew by 40% YoY supported by strong growth in PMC (39% YoY) & real estate business (266% YoY). While EBITDA margin declined by 371bpsYoY to 3.7% due to change in accounting standards to Ind-AS 115 & higher material cost. Order backlog remains strong at Rs80,000cr of which Rs38,000cr of projects are awarded to contractors which provides revenue visibility. As per management, NBCC has received clearance order from high court...

NBCC reported a mixed performance in 2QFY19 with a better-than-expected growth in revenue booking and disappointing EBITDA margin. Beating our estimate, its reported revenue grew by 37% YoY to Rs15.4bn mainly led by 39% YoY increase in PMC revenue and 266% YoY rise in real estate revenue. PMC revenue accounted for 90% of its total revenue. A significant increase in other income (+207% YoY and +70% QoQ) resulted in 16% YoY growth in PAT to Rs859mn. NBCC stated that change in accounting rules to IndAS resulted in deferment of revenue booking especially for upfront fees under PMC contracts. Earlier, these incomes used to be reported in P&L;, which are shown under liabilities as advances received. These incomes would be booked...

ICICI Securities Ltd | Retail Equity Research Net sales grew at a robust pace of 39.7% YoY to | 1582.1 crore (our estimate: | 1331.1 crore) on account of 38.8% strong growth in PMC revenues to | 1392.4 crore (our estimate: | 1171.9 crore). Also, given the changes in accounting standard to Ind-As 115, NBCC reported revenue growth of 266.2% YoY to | 53.3 crore in real estate division EBITDA margins contracted 371 bps YoY to 3.7% (our estimate:...

Revenue from real estate grew by 1371% YoY with EBIT margin of 52.5% Despite, tree cutting issue in Delhi, the management maintains 30-35% revenue growth in FY19 as exposure to Delhi redevelopment project is only around Rs5,000cr in the current awarded projects. Due to recent correction in price we revised our rating to Buy and value NBCCs core business at a P/E of 26x on FY20E EPS and Rs9/share for...

NBCC has reported a mixed performance in 1QFY19. While its revenue witnessed a significant ~45% YoY growth (GST adjusted), EBITDA declined by 7% YoY and 67% QoQ to Rs547mn (significantly lower than our estimate) and EBITDA margin fell by 131bps YoY and 435bps QoQ to 3.4%. Execution of low-margin works and unbilled revenue were the prime reasons for dismal margins, which the management expects to improve in subsequent quarters. Net profit grew by 21% YoY (-52% QoQ) to Rs677mn mainly supported by 79% YoY growth in other income. While current order book at Rs800bn continues to look impressive, Rs350bn of order backlog is under execution phase. Order inflow for 1QFY19 stood at Rs40bn and NBCC expects to add...

Net sales grew at a robust pace of 28.9% YoY to | 1625.2 crore (our estimate: | 1509.0 crore) due to 21.2% strong growth in PMC revenues to | 1392.8 crore (our estimate: | 1325.7 crore). Also, given the changes in accounting standard to Ind-As 115 for revenue recognition from contracts with customers, NBCC reported stellar growth of 1370.1% YoY to | 129.7 crore in the real estate division The EBITDA margin contracted 127 bps YoY to 3.9% (our estimate:...

Media reports indicate that the Delhi High Court (HC) has maintained its stay on tree felling until further orders. Also, the National Green Tribunal (NGT) has ordered not to fell trees for redevelopment of government colonies till July 19, 2018. Previously, the Delhi High Court had directed NBCC to stop tree felling till July 4, 2018. This decision came after a PIL was filed, which sought setting aside of terms of reference (ToR) and environment clearances (EC) granted to the project by the Environment Ministry, saying it would lead to felling of over 16500 trees. The six south...

We attended the analyst meet of NBCC. The key takeaways are: -i) execution of several big ticket projects to drive revenue growth ii) affordable housing segment to be huge opportunity iii) to acquire couple of government companies present in similar businesses. Overall, we like NBCC's business model given the huge opportunities ahead and expect...

Q4FY18 revenue declined by -7% due to delay in execution of PMC & no revenue booking from real estate projects. Notably, order backlog remains strong at Rs80,000cr (14x FY18 sales) provides strong visibility for next 5yrs....