NCC - Fundamental Analysis: Financial Health & Valuation

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

Fundamental Rating: 4.0

📊 Financial Overview

• Profitability: PAT at ₹190 Cr, down from ₹242 Cr QoQ; EPS at ₹12.0
• Margins: ROCE at 20.1%, ROE at 10.7% — solid operational efficiency
• Debt Profile: Debt-to-equity ratio of 0.20 — low leverage, financially stable
• Dividend Yield: 1.04% — modest income return

📈 Valuation Metrics

• P/E Ratio: 17.2 — below industry average of 22.1, indicating relative undervaluation
• P/B Ratio: ~1.8 — reasonable given book value ₹118
• PEG Ratio: 0.64 — suggests undervaluation relative to earnings growth
• Intrinsic Value: Estimated around ₹230–₹250 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: NCC Ltd is a diversified construction and infrastructure company with projects in roads, buildings, water, and electrical segments
• Moat: Strong execution track record, diversified order book, and government project exposure
• Growth Drivers: Public infrastructure spending, smart city projects, and real estate recovery

📌 Entry Zone Recommendation

• Suggested Entry: ₹200–₹210 — near DMA50 and below intrinsic value
• Technical Indicators: RSI at 52.9 (neutral), MACD slightly positive — stable momentum

📈 Long-Term Holding Guidance

• Hold for long-term if accumulated near support; monitor order inflow and execution margins
• Attractive for value investors with a 2–3 year horizon

✅ Positive

• Low P/E and PEG ratios
• Strong ROCE and low debt
• FII holding increased by 0.17%
• Well-diversified infrastructure portfolio

⚠️ Limitation

• QoQ profit decline of 5.3%
• DII holding declined by 0.85%
• Stock down ~35% from 52-week high

📰 Company Negative News

• Short-term margin pressure due to raw material cost volatility and execution delays

🌟 Company Positive News

• Strong order inflow in Q2 FY26; healthy pipeline in water and road segments
• Upgraded credit rating due to improved financial profile and execution strength

🏭 Industry

• Infrastructure industry P/E at 22.1 — NCC trades at a discount
• Sector driven by government capex, urban development, and housing demand

🧾 Conclusion

• NCC is a fundamentally sound infrastructure company with attractive valuation and strong execution capabilities
• Accumulate near support zones for long-term growth; monitor project margins and order book visibility