Can NCC Rebound From Weak H1 FY26 on Its Expanding Order Book?
About NCC Limited
NCC Limited is one of India’s leading infrastructure construction companies engaged in buildings, water, irrigation, transportation, and mining projects. Despite execution challenges in early FY26, the company’s strong project pipeline and diversified segment mix underpin its recovery potential.
CLSA maintained an ‘Outperform’ rating but trimmed the target price to ₹261 (from ₹315), citing temporary weakness in Q2 due to monsoon disruptions and slower project mobilization. The brokerage expects a rebound in execution from H2 FY26 as weather normalizes.
Financial Highlights (Q2 FY26)
| Metric | Q2 FY26 | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,665 Cr | -16% | -9% |
| EBITDA Margin | 10.4% | -80 bps | -30 bps |
| PAT | ₹248 Cr | -37% | -10% |
| Order Book | ₹71,957 Cr | +37% | Stable |
Revenue ₹4,665 Cr saw a YoY decline due to delayed project execution caused by heavy monsoon. EBITDA margin 10.4% remained resilient, showing cost discipline amid lower volumes. PAT ₹248 Cr declined on account of slower billing and under-absorption of overheads.
Order book of ₹71,957 Cr (up 37% YoY) provides multi-year visibility, led by strong inflows from buildings, water, and electrical projects. CLSA expects normalization and improved traction from Q3 FY26 onwards.
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Peer Comparison
| Company | Order Book (₹ Cr) | EBITDA Margin |
|---|---|---|
| NCC Ltd | 71,957 | 10.4% |
| PNC Infratech | 58,230 | 11.1% |
| Ahluwalia Contracts | 21,800 | 10.8% |
NCC’s large and diversified order book continues to offer comfort despite temporary earnings weakness. Execution normalization and timely project awards remain the key growth triggers.
Strengths & Weaknesses
Strengths
|
Weaknesses
|
The company’s fundamentals remain strong, with project mix favoring recovery once execution accelerates post-monsoon.
Opportunities & Threats
💡 Opportunities
- Massive infrastructure push by central and state governments.
- Rising order inflows from smart city and water projects.
- Margin recovery expected as weather normalizes.
📉 Threats
- Delayed clearances and cost escalations in public projects.
- High working capital requirement and payment delays.
- Continued rainfall disruption may defer project timelines.
Valuation & Investment View
- Short-term: Cautiously optimistic with near-term weather headwinds.
- Medium-term: Positive on strong order inflows and margin normalization.
- Long-term: Attractive given consistent execution and policy tailwinds.
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Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, highlights that NCC’s strong execution record and rising order pipeline provide resilience despite short-term weather-related weakness. Explore more such insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on NCC Outlook
- Will NCC recover execution pace in H2 FY26?
- How does its order backlog compare to peers?
- Is NCC’s valuation attractive after Q2 correction?
- What are CLSA’s long-term growth triggers for NCC?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
