NBCC shares in focus as company bags Rs 1,500 crore order

Shares of NBCC Ltd will be in focus on Thursday morning after the company said it has bagged Rs 1,500 crore worth order from National Cooperative Development Corporation (NCDC) to built warehouses and other agriculture infrastructure under the world's largest  grain storage plan in cooperative sector at various locations in India.  NBCC would engage in project management and offer consultancy on EPC mode, the company said in a BSE filing.

NBCC, which has a market capitalisation of Rs 14,427 crore, has seen its shares rallying 97.66 per cent in 2023 so far. The company reported a flattish revenue growth in the September quarter on a 52 per cent YoY jump in profit. Order book for the quarter was flat sequentially at Rs 55,000 crore. The NBCC management has guided for Rs 11,000 crore in revenues and 5-5.5 per cent Ebitda margins for FY24.

In a note last month, Nuvama Institutional Equities last month said: "Factoring in improved order intake and margins, we revise FY25E EPS upwards by 4 per cent. We also increase the P/E multiple from 15 times to 25 times, considering pickup in real estate monetisation, which is key to future revenue growth. We are upgrading the stock from ‘HOLD’ to ‘BUY’ with target of Rs 76 (earlier Rs 44). The pace of realty monetisation on ‘self-revenue generation’ projects is a key catalyst, in our view," it said.

The stock has breached that level. On Wednesday, it closed at Rs 80.15, down 0.31 per cent.

"While book-to-bill at 6.2 times seems robust, Rs 32,000 crore worth of orders pertain to ‘self-revenue generating projects’, wherein the pace of real estate monetisation would determine execution. NBCC recently monetised 0.39msf space in WTC Delhi for Rs 1,560 crore. This was the highest sales realisation in a single auction since the launch of WTC New Delhi in 2017. Against a reserve price of Rs 37,161/sq. ft, the highest rate achieved was Rs 43,161/sq. ft. As per media reports, the company has monetised 2.17msf space till date in the project with a sales value of Rs 8,750 crore. It plans to complete the WTC project and the Amrapali project in FY24," Nuvama said last month.

Also read: Block deal: Fusion Micro Finance shares in focus as Warburg Pincus arm may sell 9.25% stake today

Also read: Stock recommendations by market analysts for December 14, 2023: Asian Paints, Bata India and Indian Energy Exchange