NCC Limited witnessed a significant decline of 10.63 per cent in its shares on the NSE at 11.37 AM on Thursday following the release of disappointing Q3FY25 results and a downward revision of revenue guidance by Centrum Broking.
For the quarter ended December 31, 2024, the company reported a 1.6 per cent year-on-year decrease in revenue, amounting to ₹4,670 crore, which was 10.5 per cent lower than Centrum’s estimate. Additionally, EBITDA fell by 15 per cent YoY to ₹410 crore, with margins dropping from 10.1 per cent in Q3FY24 to 8.8 per cent. Net profit also took a hit, declining by 12.9 per cent to ₹185 crore. The weak performance was attributed to delayed payments from clients and a slowdown in post-election spending.
In response to the lackluster results, NCC revised its revenue growth forecast for FY25 from 15 per cent to 5 per cent, with margins also being adjusted to 9.25 per cent from the previous range of 9.5-10 per cent. Despite securing orders worth ₹8,440 crore in Q3FY25, the company’s order book decreased by 3 per cent YoY to ₹55,550 crore.
Centrum Broking maintained a “REDUCE” rating on NCC and lowered its target price to ₹247 from ₹310 due to concerns regarding execution and slower project awards, particularly in Maharashtra where NCC has significant exposure. Projects in the state such as smart meters, the Goregaon-Mulund Link Road, and MSRDC developments have been delayed following the recent elections.
Although NCC aims to achieve its order inflow target of ₹20,000-22,000 crore in FY25, analysts remain cautious about its near-term growth prospects. The company’s stock has declined by 8.6 per cent in the last month, underperforming the NIFTY Midcap 100 index.
Published on February 7, 2025.
