Whalesbook
Mixed Q4 Results: Profit Dip, Sequential Gains
NCC Limited posted a year-on-year net profit decline of 18.8% to Rs 206.02 crore for Q4 FY26, compared to Rs 253.82 crore in the same period last year. This followed a strong 68.2% increase in net profit from the previous quarter (Q3 FY26), which reached Rs 206.02 crore from Rs 122.46 crore. Revenue from operations remained stable, showing a slight 1.04% rise year-on-year to Rs 6,253.96 crore. The company's profit margin for the quarter was 8.4%. Despite the profit dip, the stock faced market pressure, trading between Rs 152-160 on May 18, 2026, far below its 52-week high of Rs 242.15.
Strong Order Backlog: Rs 830 Billion Secured
A key factor supporting NCC's outlook is its significant order backlog, which reached approximately Rs 830 billion by the end of FY26. This backlog is equivalent to about 4.8 times its revenue over the past twelve months. The company secured Rs 319 billion in consolidated orders for FY26, which included a notable Rs 115 billion mining order. While total FY26 order inflows were down 3% compared to FY25, the overall order book value grew by a substantial 16% to Rs 83,004 crore, up from Rs 71,568 crore in FY25. Management stated that progress on major projects is speeding up, with early mobilization advances in place, indicating better project execution.
Analyst View: 'Buy' Rating Maintained with Rs 195 Target
Brokerage Prabhudas Lilladher has reiterated its 'Buy' recommendation for NCC, setting a target price of Rs 195 per share. This target uses a valuation of 15 times the estimated earnings per share for FY28, and about 1.2 times its projected book value for FY28, in line with its 10-year average. Currently, NCC's price-to-earnings (P/E) ratio is approximately 13.5-14.04 times its trailing twelve months' earnings, with a market capitalization around Rs 9,500-10,000 crore. The general analyst view favors a 'Buy', with average 12-month price targets between Rs 199.75 and Rs 205.53, suggesting potential gains of 20-39%.
Challenges Ahead: Cautious Outlook and Margin Pressure
However, some factors suggest caution. Management chose not to provide specific guidance for FY27, citing global uncertainties and potential government spending cuts. Prabhudas Lilladher also noted current pressures on profit margins, leading them to lower their estimated earnings per share for FY27 by 8%. NCC's stock has fallen over 29% in the past year, indicating that the market may already be considering these challenges. While NCC's P/E ratio is lower than peers like Larsen & Toubro (28.06x) or PNC Infratech (20.84x), its recent profit decline and cautious outlook could deter investors. GR Infraprojects, for example, trades at a P/E of 12.32x, which might appear more attractive depending on future growth expectations.
Positive Macro Environment for Infrastructure Sector
NCC operates in an infrastructure sector expected to benefit from significant government support. India's economy is projected to grow around 6.5% in 2026-27, with expectations of lower inflation and interest rates. The infrastructure sector is forecast to grow at an annual rate of 8-8.2% by 2027, fueled by substantial public spending and key initiatives like the National Infrastructure Pipeline and PM Gati Shakti. The Union Budget for 2026-27 further emphasizes this commitment with continued investment in transport, urban development, and manufacturing, all positive for construction firms like NCC. This favorable economic climate offers strong potential, but NCC needs to demonstrate its ability to translate its large order book into profitable growth.