Stock in Action – NCC

NCC Share Movement of Day 

Why NCC Share is in Buzz? 

Stock in news i.e. NCC Stock has recently reported significant surge in its financial performance for fourth quarter (Q4) of fiscal year 2023-24 (FY24). NCC limited has witnessed notable growth in net profit & revenue, primarily driven by higher execution of its extensive order book. These impressive results have garnered considerable attention from investors & analysts, highlighting NCC's robust growth trajectory & operational efficiency.

Highlights of NCC Q4 of FY24 Financial Performance 

• Stock to watch i.e. NCC Limited reported consolidated net profit of ₹ 239.2  cr for Q4 FY24, marking 25% increase compared to ₹ 191  cr net profit recorded in corresponding quarter of previous year. 
• Stock in trend’s revenue also saw significant rise of 31%, reaching ₹ 6,484.9  cr, up from ₹ 4,949  cr in same period last year. 
• This growth was largely due to benefits of its record order wins in 2022-23.
• NCC ltd. operating margins, however, saw slight decline, falling to 8.5% from 9.4% in previous year, drop of 90 basis points. 
• Despite this, NCC's continued success in securing new orders, coupled with increase in its order book, has positioned it well for sustained growth.

NCC Q4 Result Analysis 

NCC Shares Price Financials: Historical (Standalone) 

Why NCC limited continues to Remain most Preferred Bet in Construction Space 

1. Robust Order Book
NCC ended FY23 with order book of ₹ 50,244  cr, which grew to ₹ 57,536  cr by end of FY24. This extensive order book provides strong revenue visibility for upcoming years.

2. Record Order Inflow
The construction player received its highest-ever order inflow of about ₹ 26,000  cr in FY23 & continued its winning streak by securing additional orders worth ₹ 27,283  cr in FY24. This consistent order inflow indicates NCC's strong market positioning & capability to win large-scale projects.

3. Diverse Project Portfolio
NCC is involved in wide range of infrastructure projects including industrial & commercial buildings, roads, bridges, housing, power transmission, irrigation, & hydrothermal power projects. Its presence in international markets like Oman & UAE further diversifies its project portfolio.

4. Government-Funded Projects
More than 80% of NCC's order book comprises government-funded projects, which are generally considered to be more stable & less risky compared to private sector projects.

5. Dividend Payout
NCC’s board of has approved dividend pay-out of ₹ 2.2 per share for FY24, reflecting NCC commitment to returning value to its shareholders.

6. Expansion into New Segments
NCC's entry into smart meters segment with significant project wins showcases its adaptability & ability to tap into new growth areas. NCC has already started field trials for smart meter projects in Bihar & is planning trials in Maharashtra.

NCC Stock Price Strength

-Expected to give good quarter.
-Has been maintaining healthy dividend payout of 22.5%
-Debtor days have improved from 70.8 to 54.6 days.
-NCC's working capital requirements have reduced from 88.0 days to 61.6 days

NCC Share Price Weakness

-Has low return on equity of 9.36% over last 3 years.
-NCC's cost of borrowing seems high.

Conclusion 

Despite slight decline in operating margins, NCC's robust order book, consistent order wins, diversified project portfolio, & strategic expansion into new segments make it compelling investment in construction space. company’s strong financial performance & continued focus on execution are likely to drive its growth & deliver long-term value to its shareholders.