NBCC: Weak margins, muted pace of real estate monetisation key overhangs

The stock has already corrected by almost half in the last one year (a third since January highs). But, as the outlook remains weak, it could continue to lag

NBCC — a public sector company with a strong order book of Rs 70,000 crore, which provides almost nine years of revenue visibility — appears to be well placed for strong growth. But, the challenges in project execution are keeping concerns elevated. The stock has already corrected by almost half over the past year (a third since January highs). And as the outlook remains weak, it may continue to lag.

The execution concerns have increased, looking at the headwinds of poor labour availability and a weak economy. These are likely to present challenges in monetising assets in the “self-revenue generation” projects,