NCC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 4.2

📊 Financials: NCC shows strong fundamentals with ROCE at 20.1% and ROE at 10.7%. Debt-to-equity is low at 0.28, indicating manageable leverage. EPS stands at ₹11.0, supported by consistent dividend yield of 1.45%. However, quarterly profit dropped from ₹190 Cr. to ₹101 Cr., reflecting -37.1% variation.

💹 Valuation: Current P/E of 13.7 is below industry average of 18.8, suggesting undervaluation. Book value is ₹121, giving a P/B ratio of ~1.29. PEG ratio of 0.51 indicates attractive growth-adjusted valuation. Intrinsic value appears higher than current price, offering margin of safety.

🏗️ Business Model: NCC operates in construction and infrastructure, benefiting from government contracts and urban development projects. Competitive advantage lies in diversified project portfolio and strong execution capabilities.

📈 Entry Zone: Current price ₹156 is near support at ₹152. Entry zone recommended between ₹150–160 for accumulation. Long-term holding is favorable given undervaluation and sectoral tailwinds, though short-term volatility may persist.

Positive

• 📌 Strong ROCE of 20.1% and healthy ROE of 10.7%
• 📌 Attractive PEG ratio (0.51) indicating undervaluation
• 📌 Low debt-to-equity (0.28) ensures financial stability
• 📌 Dividend yield of 1.45% adds to shareholder returns

Limitation

• ⚠️ Quarterly profit declined sharply (-37.1%)
• ⚠️ RSI at 15.6 indicates oversold momentum, reflecting weak near-term sentiment
• ⚠️ Current price below DMA 50 (182 ₹) and DMA 200 (211 ₹), showing bearish trend

Company Negative News

• 📉 Recent profit contraction from ₹190 Cr. to ₹101 Cr.
• 📉 Decline in DII holding (-0.85%) signals reduced domestic institutional confidence

Company Positive News

• 📈 Increase in FII holding (+0.17%) shows foreign investor interest
• 📈 Strong order book in infrastructure projects supports long-term growth visibility

Industry

• 🏗️ Infrastructure sector supported by government spending and urbanization
• 🏗️ Industry P/E at 18.8 indicates NCC trades at discount compared to peers

Conclusion

✅ NCC is fundamentally strong with undervaluation signals and a healthy balance sheet. Entry around ₹150–160 offers margin of safety. Long-term holding is recommended, though investors should monitor profit growth and institutional participation for sustained momentum.

Would you like me to also prepare a peer benchmarking overlay comparing NCC with other infrastructure companies, or a sector rotation basket scan to identify compounding opportunities?