NCC share price slips 15%, hits 11-month low on disappointing Q3 results

NCC share price: Shares of construction engineering company NCC hit 11-month low of Rs 202.85, as they slipped 15 per cent on the BSE in Friday’s intra-day trade amid heavy volumes after the management has cut its revenue and margin guidance with revenue growth in FY25 now expected at 5 per cent (from 15 per cent) and margin expected at 9.25 per cent (from 9.5-10 per cent).

 

At 11:43 AM; NCC shares was trading 11 per cent lower at Rs 211.50, as compared to 0.22 per cent rise in the BSE Sensex. The stock of the civil construction company is quoting at its lowest level since March 2024. It had hit a 52-week low of Rs 200.95 on March 14, 2024. The average trading volumes on the counter jumped over three fold. A combined 20.44 million equity shares representing 3.2 per cent of total equity of NCC have changed hands on the NSE and BSE.

 

 

Meanwhile, in the October-December quarter (Q3FY25), NCC reported a 13 per cent year-on-year (Y-o-Y) decline in standalone profit after tax at Rs 185.4 crore, due to the muted execution. The company reported revenue from operations at Rs 4,671 crore, down 1.6 per cent year-on-year (Y-o-Y) given slower pace of execution due to elections which led to elongated billing cycles. Earnings before interest, tax, depreciation and amortisation (Ebitda) fell 14.6 per cent Y-o-Y at Rs 409.50 crore; with margins reported at 8.8 per cent, down 130 bps Y-o-Y. 

 

The management has indicated that muted turnover was owing to slower pace of execution during Q3 largely led by state elections (Maharashtra and Jharkhand which together form 46 per cent of the order book) and unprecedented rainfall leading to elongated billing cycles.  Subsequently, management has revised growth guidance downward and margin guidance.

 

The orderbook stood at Rs 51,834 crore as of Q3FY25, 2.7x TTM book to bill. It has however maintained its order inflows outlook of Rs 20,000- 22,000 crore for the year, given it has achieved over Rs 13,500 crore worth order inflows for the year (Rs 8,440 crore in Q3) and having L1 position worth Rs 9,000-10,000 crore in pipeline, ICICI Securities said in a note. The brokerage firm highlighted that execution recovery is likely only in FY26, with Q4FY25 being another muted quarter.

 

NCC reported weak results for Q3FY25 as lingering effects of central & state elections and delayed payments from clients resulted in weak execution. However, given the weak execution in 9MFY25, NCC has reduced its guidance of revenue growth and margin guidance. As awarding is yet to show a sizable pick-up, analysts at Centrum Broking believe that execution for the next two years is expected to remain lackluster.

 

Approximately 40 per cent of NCC’s order book is from Maharashtra. Given the recent state elections, most projects that were earlier awarded to NCC are yet to take off. Large projects like smart meters, Goregaon – Mulund Link road and MSRDC projects are likely to take some more time before meaningful execution can be seen, the brokerage firm said.