Company Report | Q4FY11 Result Update

LONG TERM INVESTMENT CALL

31 May 2011 Buy

Q3FY11 Result Highlights (Consolidate)

Industry Constructions
NCC Ltd. (earlier known as Nagarjuna Constructions
CMP (INR) 86 Company Ltd.) standalone top-line and operating profit
Target (INR) 114 came in line with our estimates (below street estimates) but
Upside / (Downside) (%) 32 surprised negatively at PAT level.
52 week High/Low (INR) 197 / 81
Market Cap (INR MN) 21,399 NCC’s standalone revenue at INR 15bn for the quarter
3M Avg. Daily Vol. (‘000) 1,261 under review declined by 4.7% on yearly basis. Operating
P/E (FY13E) 6.7 Profit at INR 1.3bn, however declined sharply, in line with
our estimates, by 14% on yearly basis. The operating profit
Shareholding Pattern (%) margin, for the quarter under review, declined by 100bps to
9%. Lower operating profit margins were largely
Non Promoters attributable to higher sub-contractor bills and labour
Institutions 20% charges. During last quarter (Q3FY11) company had lost
26%
revenue to the tune of ~INR 2bn due to adverse weather
Institutions conditions.
54%

Interest expenses, inline with other constructions companies

sharply increased to INR 575Mn, +65% YoY. This was led by
higher debt service cost and extended working capital cycle
Stock Performance
caused by delayed payments from clients and delay in
NCC NSE Nifty
230 clearances.

180 Net profit after tax at INR 357Mn reduced by 32.8% yoy,
lower than our and consensus estimates.
130

Order-book Update
80
With order intake of INR 6bn during the quarter under
May

Jun

Sep

Jan
Jul

Oct

Dec

Mar

Apr
Aug

Nov

Feb

review, NCC’s current order book now stands at INR

162bn. The current order-book is ~2.7x company’s FY11
Performance (%)
revenue. NCC expects reasonable growth in its order-book
1M 3M 1 Year during FY12. company aims to an EPC order from its own
Company -16.4% -15.1% -51.9% Power project worth INR 40bn, going forward. Moreover,
NIFTY -4.0% 4.0% 7.6% from its recently acquired division of Nelcast Power plant,
(INR in Mn)
company expects order worth INR 50bn.
Particulars Actual Estimates
Other Update
Total Income 14,504 14,250
EBIDTA 1,309 1,397 NJCC’s two out of the five road projects on BOT basis are
Adj. PAT 357 556 already operational and remaining three which are under
* Source: AceEquity, Unicon Research construction are likely to be operational and contribute to
the revenue from Q1FY12 onwards.

Analyst
Valuation and Outlook
Falgesh Sanghvi | fsanghvi@uniconindia.in
At the CMP, stock trades at ~6.8x its FY13e consolidated
EPS and 6.7x its EV/EBITDA for FY13e. Buy for target
(reduced) of 114 (9x its FY13e).

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: wealthresearch@uniconindia.in
 Financials (standalone) (INR in mn)
Particulars Q4FY11 Q4FY10 YoY
Income From Operations 14,504 15,227 (4.7)
Operating Expenditure 13,195 13,700 (3.7)
EBITDA 1,309 1,527 (14.3)
EBITDA (%) 9.0 10.0 -100 bps
Depreciation 186 136 36.1
EBIT 1,124 1,391 (19.2)
EBIT(%) 7.7 9.1 -139 bps
Other Income 56 12 354.9
Interest 575 348 65.3
PBT 605 1,055 (42.7)
Tax 248 525 (52.7)
Tax (%) 41 50 (17.5)
PAT 357 531 (32.8)
PAT (%) 2.5 3.5 -103 bps
Source: Company, Unicon Research

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: wealthresearch@uniconindia.in
 Unicon Investment Ranking Methodology

Rating Buy Accumulate Hold Reduce Sell

Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%

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Email: wealthresearch@uniconindia.in