Midcap Construction Stock To Buy, Soars 415% In 3 Yrs, Declares 110% Dividend, Fixes Record Date

HDFC Securities has a Buy on NCC Ltd. with a target price of Rs. 137 apiece. The brokerage sees a decent upside of up to 16% if the stock is purchased at the current market price. The Board of Directors of NCC in meeting held on May 26, 2023, recommended 110% dividend.

NCC is a Midcap stock operating in the Construction sector. It has a market capitalisation of Rs. 7,446.26 crore. Check below to know more:

Recommends Dividend & Fixes Record Date

According to an exchange filing by the Board of Directors of NCC Ltd., "The Board of Directors at the meeting has recommended payment of Dividend of Rs. 2.20 (110%) per Equity Share of the face value of Rs.2/- each, for the Financial Year 2022-23 for the consideration and the approval of the Members at the ensuing Annual General Meeting."

On May 27, 2023, the Board of Direct in a meeting fixes the record date for the dividend. In a regulatory filing, it said, "Fixed the record date as Friday, August 25, 2023 for the purpose of determining the entitlement of dividend for the financial year ended March 31, 2023."

Bright prospects in the near term, Buy for a Target Price of Rs. 137/share

According to the brokerage firm, "NCC's Q4FY23 revenue/EBITDA/APAT came in at INR 40.2/4.2/1.8bn, beating our estimates on all fronts by 11.2/13.7/9.7%. With an inflow of INR 132.8bn in Q4FY23, the FY23 order inflow (OI) stood at INR 259bn (its highest ever annual inflow), taking the order book (OB) as of Mar'23 to an all-time high of INR 502.4bn (~3.8x FY23 revenue).

The company guided for (1) debt reduction by another INR 2bn by FY24-end and (2) incurring a capex of INR 2.8bn. The OB for the AP project stands at INR 31.3bn. With the conclusion of the Sembcorp arbitration case, the company is expecting the pay out in H2FY24. It guided for FY24 revenue to grow by 20% YoY with an EBITDA margin of 10-10.15% and an OI of INR 260bn.

"Given the robust order book, pick-up in execution, and robust balance sheet, we recalibrate our FY24/25E EPS by -3.6/4.9%. We maintain BUY on NCC, with an increased TP of INR 137 (9x Mar-25E EPS)," the brokerage has said.

Stock Outlook - Current Market Price & Returns

The current market price of NCC's stock is Rs. 118.65 apiece, trading 3.45% up from its previous close of Rs. 114.65 apiece. Its 52 week low is Rs. 52.20 apiece and 52 week high is Rs. 126.90 apiece, respectively.

The stock jumped 8.94% in the past 1 week. It gave 83..11% positive return in the past 1 year. In 3 years, it gave a multibagger return of 415.03%. It has fallen 1.46% in the past 5 years.

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.