NCC Share: Why You Should Invest in This Construction Company
NCC Ltd. is one of the leading construction and infrastructure companies in India. It has a diversified portfolio of projects across various sectors such as roads, railways, irrigation, mining, power, water, and urban infrastructure. In this blog post, we will analyze the performance of NCC shares and why it is a good investment option for long-term investors.
NCC Share Price and Financials
NCC share price has been on an upward trend since the beginning of 2023. It has gained more than 150% in the past year and reached its 52-week high of Rs 176.6 on August 25, 2023. The current market capitalization of NCC is Rs 10,648 crore.
The financial performance of NCC has also been impressive. The company reported a revenue of Rs 8,872 crore and a net profit of Rs 659 crore for the financial year 2022-23. The revenue grew by 9% and the net profit grew by 28% compared to the previous year. The earnings per share (EPS) was Rs 10.4, which is higher than the industry average of Rs 6.5.
The company has also improved its financial position by reducing its debt and increasing its cash flow. The total debt of NCC reduced by 24% from Rs 2,224 crore in March 2022 to Rs 1,690 crore in March 2023. The operating cash flow increased by 36% from Rs 1,026 crore in FY22 to Rs 1,395 crore in FY23.
NCC Share: Growth Drivers and Future Outlook
One of the main growth drivers for NCC share is the strong order book of the company. As of June 30, 2023, NCC had an order book of Rs 38,599 crore, which is equivalent to more than four times its annual revenue. The company has also received four new orders worth Rs 8,398 crore in August2023 from various sectors.
Another growth driver for NCC share is the government’s focus on infrastructure development. The Union Budget 2023-24 allocated Rs 5.54 lakh crore for capital expenditure on infrastructure projects, which is an increase of 34% from the previous year. The government also announced several initiatives such as the National Infrastructure Pipeline (NIP), the National Monetization Pipeline (NMP), and the Production Linked Incentive (PLI) scheme to boost the infrastructure sector.
These factors indicate that NCC has a huge potential to grow its revenue and profitability in the coming years. The company also has a competitive edge over its peers due to its diversified project portfolio, strong execution capabilities, and experienced management team.
NCC Share: Valuation and Recommendation
NCC share is currently trading at a price-to-earnings (PE) ratio of 16.28, which is lower than the sector PE ratio of 30.85. This implies that NCC share is undervalued compared to its peers and the industry average.
Based on our analysis, we recommend buying NCC share for long-term investors who are looking for a high-growth and low-risk investment option in the construction sector. We expect NCC share price to reach Rs 200 by the end of FY24, which implies a potential upside of more than 25% from the current level.
Disclaimer: This blog post is for informational purposes only and does not constitute any investment advice. Please do your own research and consult a financial advisor before making any investment decision.