NBCC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.0

NBCC (India) Ltd is a zero-debt, high-ROE government enterprise with strong capital efficiency and bullish momentum. While valuation is stretched, its strategic position and consistent growth make it a solid long-term candidate.

📊 Financial Overview

• Profitability: PAT at ₹114 Cr, down from ₹208 Cr QoQ; EPS at ₹1.87
• Margins: ROCE at 32.1%, ROE at 24.1% — excellent capital efficiency
• Debt Profile: Debt-to-equity ratio of 0.00 — completely debt-free
• Dividend Yield: 0.57% — modest but consistent

📈 Valuation Metrics

• P/E Ratio: 55.3 — significantly above industry average of 22.1
• P/B Ratio: ~13.6 — premium valuation relative to book value ₹8.62
• PEG Ratio: 2.00 — indicates valuation may be ahead of growth
• Intrinsic Value: Estimated around ₹100–₹110 based on normalized earnings

🏢 Business Model & Competitive Edge

• Core Operations: Government-owned Navratna PSU engaged in project management consultancy, real estate development, and EPC contracting
• Moat: Strategic government contracts, urban redevelopment projects, and strong execution capabilities
• Growth Drivers: Smart city projects, infrastructure push, and redevelopment of government colonies

📌 Entry Zone Recommendation

• Suggested Entry: ₹105–₹110 — near DMA200 and intrinsic value
• Technical Indicators: RSI at 62.2 (approaching overbought), MACD positive — bullish momentum

📈 Long-Term Holding Guidance

• Hold for long-term if accumulated near support; monitor project pipeline and execution timelines
• Valuation is high, but strategic relevance and zero debt support long-term stability

✅ Positive

• Zero debt and strong ROE/ROCE
• FII holding increased by 0.35%
• Momentum supported by MACD and RSI
• Five-year CAGR of 31.3% in ROE

⚠️ Limitation

• High P/E and PEG ratios
• QoQ profit decline from ₹208 Cr to ₹114 Cr
• DII holding declined by 0.26%

📰 Company Negative News

• Short-term correction due to profit booking and valuation concerns

🌟 Company Positive News

• Identified as a top stock pick for October 31, 2025 by Bajaj Broking Research

  The Times of India

• Stock up 52% from 52-week low; bullish structure maintained

  Business Today

🏭 Industry

• Construction and infrastructure industry P/E at 22.1 — NBCC trades at a premium
• Sector driven by government spending, urban redevelopment, and smart city initiatives

🧾 Conclusion

• NBCC is a fundamentally strong PSU with strategic importance and high capital efficiency
• Accumulate near support zones for long-term gains; monitor valuation and project execution

Sources

The Times of India

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