NCC Target Hiked to Rs 195 by Prabhudas Lilladher

NCC Reports Stable Q4FY26 Performance Despite Weak 9MFY26

Prabhudas Lilladher's research report on NCC highlights a contrasting performance between the company's standalone 9MFY26 and Q4FY26. While revenue declined 16% year-over-year (YoY) in the first nine months of fiscal year 2026, the company reported a relatively stable Q4FY26 with revenue remaining broadly flat YoY and in line with estimates. The EBITDA margin moderated to 8.4%, lower on a YoY basis but in line with the Street and Prabhudas Lilladher's expectations.

On the balance sheet front, NCC delivered a significant improvement, with net debt reducing to Rs17 billion versus Rs28 billion in Q3FY26. Operating cash flow remained positive, indicating a healthy financial position. The company's consolidated FY26 order inflows crossed Rs319 billion, including a substantial Rs115 billion mining order, which has taken the total order book to a robust ~Rs830 billion (~4.8x TTM revenue). The execution of key projects has started gaining traction, supported by mobilisation advances already received.

Despite these positives, management refrained from providing FY27 guidance, citing geopolitical uncertainties and the possibility of government austerity measures. Prabhudas Lilladher views this stance as largely conservative. Considering some near-term margin pressure, the research firm cut FY27E/FY28E EPS estimates by 8%/2%, respectively.

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We maintain our Buy rating for NCC with a revised target price of Rs195, based on an unchanged 15x FY28E EPS. The stock trades close to ~1.2x FY28E book value (at last 10 years historical average).