NCC - Investment Analysis: Buy Signal or Bull Trap?

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

Investment Rating: 4.0

🏗️ NCC Ltd is a fundamentally strong infrastructure player with attractive valuation and solid capital efficiency, making it a good candidate for long-term investment. Ideal entry zone: ₹205–₹215. If already held, consider a 2–4 year horizon with exit near ₹310–₹325 or if ROE/ROCE begin to decline.

🔷 Positive

• 📊 ROCE of 20.1% and ROE of 10.7%: Indicates healthy capital efficiency and profitability.
• 📉 Low P/E (17.3) vs Industry PE (22.1): Suggests undervaluation.
• 📉 PEG ratio of 0.64: Attractive valuation relative to growth.
• 📉 Debt-to-equity ratio of 0.20: Reflects strong financial discipline.
• 📈 EPS of ₹12.0: Demonstrates consistent earnings performance.

⚠️ Limitation

• 📉 Quarterly PAT decline: ₹190 Cr. vs ₹242 Cr. (−5.3%) indicates short-term margin pressure.
• 📉 DII holding declined (−0.85%): May reflect cautious domestic sentiment.
• 📉 Volume below average: Indicates reduced market interest.

🚫 Company Negative News

• 📉 Q2 FY26 results expected on November 6, 2025, with market cautious after prior quarter’s PAT decline

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✅ Company Positive News

• 📈 NCC secured a ₹1,480 Cr. order from Bihar Medical Services for redevelopment of Darbhanga Medical College & Hospital

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• 📈 FY25 net profit grew 16.8% and revenue increased 6.5%, driven by diversification into water, energy, and transport projects

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• 📈 Over ₹3,350 Cr. in new orders recently secured, supporting visibility and growth for the next 2–3 years

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🏭 Industry

• 🏗️ Operates in construction and infrastructure development, benefiting from government spending and urbanization.
• 📉 Industry PE of 22.1 suggests NCC trades at a discount, offering value for long-term investors.

🧾 Conclusion

• 📌 Ideal entry zone: ₹205–₹215 based on DMA and valuation support.
• ⏳ Holding period: 2–4 years to benefit from infrastructure growth and order book expansion.
• 🚪 Exit strategy: Consider exit near ₹310–₹325 or if ROE/ROCE decline or order inflow slows.

Sources

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