Stock in Action - NBCC 28 Aug 2024

 Stock in Action - NBCC 

Highlights

1. NBCC share price surged significantly after the company announced it would consider issuing bonus shares at the upcoming board meeting.   

2. NBCC bonus issue 2024 is highly anticipated by investors, with the board set to discuss the proposal on August 31.

3. NBCC dividend record date has been fixed for September 6, 2024, determining shareholder eligibility for the upcoming dividend.

4. NBCC stock performance has been impressive, with the shares showing a strong upward trend over the past year.

5. NBCC India Ltd news recently highlighted the company's major orders and significant stock price movements.

6. NBCC shareholding pattern saw an increase in both FII/FPI and mutual fund holdings during the June 2024 quarter.

7. NBCC dividend announcement includes a payout of ₹0.63 per share, pending approval at the upcoming AGM.

8. NBCC stock analysis suggests a potential target price of Rs 217, driven by strong demand and price strength.

9. NBCC order book has seen a significant increase, with the latest jump taking it to around ₹81,000 crore.

10. NBCC 2024 AGM details include the scheduled date of September 25, where shareholders will vote on key resolutions. 

Why NBCC Share is in News? 

NBCC (India) Ltd., a Navratna Central Public Sector Enterprise, has been making headlines recently for several key developments. The company's shares surged significantly on the news that its board is set to consider issuing bonus shares during its upcoming meeting on August 31, 2024. This news, coupled with impressive trading volumes and substantial gains in the company's share price, has captured the attention of investors. In addition, NBCC has announced a record date for its final dividend, further enhancing its appeal to shareholders. These developments have solidified NBCC's position as a multibagger stock, showing remarkable growth over the past year.

About NBCC Business

NBCC (India) Limited is a Government of India Navratna Enterprise under the Ministry of Housing and Urban Affairs. The Co. operates in three major segments - Project Management Consultancy, Engineering Procurement & Construction, and Real Estate.

Revenue Split FY23:

a. PMC - 92%
b. Real Estate - 2%
c. EPC - 6%

NBCC Shares Surge — Board Set To Consider Bonus Issue

NBCC shares saw a significant surge of over 8% on a recent Wednesday, following the company's announcement that it would consider issuing bonus shares in an upcoming board meeting scheduled for August 31, 2024. According to exchange filings, the trading window for NBCC's shares will be closed from August 28 until 48 hours after the conclusion of this board meeting. This surge in share price also coincided with approximately 97.3 lakh shares changing hands in multiple large trades during the market opening, indicating strong investor interest and confidence in the company's prospects.

NBCC share price reached an intra-day high as investors reacted positively to the news of the potential bonus issue. The proposed bonus issue marks the first time NBCC is considering such a move since 2017, when it last declared a 1:2 bonus, offering shareholders one bonus share for every two shares held. While the exact ratio for this potential bonus issue has yet to be determined, it will be done through the capitalization of reserves, subject to shareholders' approval.

NBCC Stock Performance Over the Past Year 

NBCC's share performance has been nothing short of remarkable, with the stock delivering impressive returns across multiple time frames. Over the past month, the stock has given a commendable return of 1.45%, while the last six months have seen an even more substantial increase of 43.71%. Yeartodate, NBCC shares have surged by 132.12%, reinforcing the stock’s positive momentum in the current fiscal year. 
Looking at the broader picture, the stock has delivered an impressive return of over 273.63% in the last twelve months, emphasizing its sustained growth and attractiveness to investors. This performance has not gone unnoticed, with the stock being labeled a "multibagger" due to its consistent and strong upward trend.

NBCC Dividend and Bonus Share History 

In addition to the potential bonus issue, NBCC also announced that it has set September 6, 2024, as the record date for a final dividend payment of Rs 0.63 per share. This dividend is subject to shareholder approval at the upcoming Annual General Meeting (AGM) scheduled for September 25, 2024. This move underscores NBCC's commitment to rewarding its shareholders, further enhancing its appeal as an investment option.
The last time NBCC issued a bonus share was in 2017, when it offered a 1:2 bonus. Since then, the company has not considered another bonus issue until now. The announcement of a potential new bonus issue, along with the upcoming dividend payment, has contributed to the recent surge in NBCC's share price. NBCC stock price has shown remarkable growth, reflecting investor confidence in the company's future prospects.

NBCC's Recent Order Wins and Strategic Growth

NBCC has not only been making headlines for its stock performance but also for its strategic growth initiatives. Recently, the company announced a significant Rs 15,000crore order from the Srinagar Development Authority to develop a Satellite Township spread over 406 acres at RakheGund Akshah, Bemina, Srinagar (J&K). This order is a testament to NBCC's strong execution capabilities and its role in key infrastructure projects across India.
Moreover, NBCC’s subsidiary, HSCC (India), secured a work order worth Rs 528.21 crore from the Directorate of Medical Education & Research, Haryana. This order involves procuring biomedical equipment and hospital furniture for the Pt. Deen Dayal Upadhyaya University of Health Sciences in Kutail, Karnal. These orders not only bolster NBCC's order book but also highlight its diversified project portfolio across various sectors.

NBCC's Strong Financial Performance

NBCC's financial performance in the recent quarter has also been robust, further boosting investor confidence. The company reported a 39% increase in net profit for the quarter ended June 2024, totaling Rs 104.62 crore. This growth in profitability reflects NBCC's ability to manage costs effectively while driving revenue growth through its various projects.
Additionally, NBCC’s consolidated order book jumped by 26%, from Rs 64,000 crore at the end of the March quarter to around Rs 81,000 crore, with a target to expand it to Rs 1 lakh crore by the end of the year. This strong order book provides a solid foundation for future revenue and profit growth, making NBCC a compelling investment option. NBCC (India) Ltd is preparing for its upcoming AGM, where shareholders will vote on the proposed dividend and other key resolutions.

Brokerage Recommendations and Market Outlook

Government of India Navratna Enterprise NBCC has been delivering consistent returns to its shareholders, supported by its robust order book and strategic initiatives. The strong performance and strategic initiatives undertaken by NBCC have not gone unnoticed by market analysts. Brokerage firm StoxBox has recommended a buy call on NBCC shares, with a target price of Rs 217 for the near term. According to analysts, NBCC's price action recently experienced a bullish breakout from a cup and handle pattern, signaling a potential trend reversal. The stock demonstrates strong buyer demand, earnings per share (EPS) growth, and price strength, presenting a lowrisk, highreward opportunity for investors.

The market outlook for NBCC remains positive, with the company's shares trading at close to their alltime high of Rs 198.25. The stock has more than doubled in value so far in 2024, gaining 130%, and has risen nearly 270% over the past 12 months. With the potential bonus issue and strong financial performance, NBCC is wellpositioned to continue its upward trajectory.

Conclusion

NBCC (India) Ltd. has emerged as a key player in the Indian stock market, delivering exceptional returns to its shareholders and making significant strides in its project execution and financial performance. The upcoming board meeting on August 31, where the company will consider issuing bonus shares, is a key event that investors are eagerly anticipating. With a strong order book, impressive financial results, and strategic growth initiatives, NBCC remains a compelling investment option with significant potential for future growth. Investors will be closely watching the developments from the upcoming board meeting and the company’s continued performance in the months ahead.