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    NCC

    NCCGood
    Construction·6 Aug 2025
    Management Summary

    NCC reported a soft first quarter with revenue degrowth of ~7% YoY as the company focused on mobilizing a massive influx of new orders received late in FY25. Despite the execution lag, the order book remains at record highs, providing strong multi-year visibility. Management is confident in a sharp recovery in H2 FY26 as major projects like the AP Capital City and GMLR tunnel move into active construction phases.

    Highlights

    7

    • Order book stands at a robust ₹70,087 crores as of June 30, 2025.

    • Standalone revenue reported at ₹4,430 crores, a 6.7% YoY decline due to mobilization delays.

    • EBITDA margin maintained at 9.02% (standalone), in line with annual guidance.

    • Order inflow for Q1 FY26 reached ₹3,658 crores; total orders till July hit ₹6,792 crores.

    • Net debt increased significantly to ₹1,497 crores from ₹695 crores at the start of the fiscal year.

    • Smart meter projects in Maharashtra achieved go-live status with 15 lakh meters installed to date.

    • Management reiterated FY26 order inflow guidance of ₹22,000-25,000 crores.

    Concerns

    1

    • Payment delays in SWSM (JJM) projects

    What Changed2

    vs Q2 FY26

    Tone shiftMixed → GoodGuidance items5 → 6 (+1)
    Key financials

    Metrics

    6

    Periods

    2

    Headline

    5
    • Revenue (Standalone)
      ₹4,430 Cr
      YoY-6.7%
    • EBITDA Margin (Standalone)
      9.0%
    • Order Book
      ₹70,087 Cr
      QoQ-2.1%
    • Net Debt (Consolidated)
      ₹1,497 Cr
      YoY-10.9%QoQ+115.4%
    • PAT Margin (Standalone)
      4.3%

    Q1

    1
    • Order Inflow
      ₹3,658 Cr

    Segment breakdown

    • Buildings₹23,577 Cr38.0%
    • Transportation₹17,957 Cr29.0%
    • Electrical T&D₹15,737 Cr25.4%
    • Mining₹4,733 Cr7.6%
    Donut· Share of Order Book

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue
    Revenue Growth
    10%
    		Medium
    Revenue
    Order Inflow
    ₹22,000-25,000 crores
    		High
    Margin
    EBITDA Margin
    9-9.25%
    		High
    Capex
    Annual Capex
    ₹750 crores
    		High
    Debt
    Net Debt Level
    ₹1,400-1,500 crores
    		Medium
    Other
    Mining Revenue
    ₹2,600 crores
    		High

    Risks & concerns

    4
    RiskSeverity

    Payment delays in SWSM (JJM) projects

    Delays in release of central funds for SWSM projects impacted Q1 turnover. — Management acknowledged

    high

    Sharp increase in Net Debt

    Net debt jumped from ₹695 Cr to ₹1,497 Cr sequentially due to working capital needs for new project mobilization. — Analyst acknowledged

    medium

    Systemic Labour Shortage

    Management admits labour scarcity is a reality in the industry but claims they are managing it through retention strategies. — Both acknowledged

    medium

    Areas of Evasion(1)

    • Specific debt guidance for March '26 was initially avoided before providing a range later in the call.

    Q&A highlights

    3

    “Whatever orders we have received, we have received at the end of March... you need to mobilize the site... Probably by end of September or September onwards, the new works will also start producing the results.”

    Explains why revenue fell despite a record order book and sets expectations for a back-ended growth year.

    asked by Shravan Shah, Dolat Capital

    2 min read5 chapters

    Detailed Narrative

    01

    Execution Lag vs. Order Book Strength

    NCC's Q1 FY26 was characterized by a disconnect between its record ₹70,087 crore order book and its actual execution. Standalone revenue fell 6.7% YoY to ₹4,430 crores. Management explained that a large portion of the order book was secured in late Q4 FY25, requiring a 3-6 month mobilization period for design, clearances, and site setup. They expect revenue to ramp up significantly from September onwards, maintaining a 10% growth target for the full year.

    02

    Smart Metering Momentum and Capital Commitment

    The Electrical T&D segment, which includes smart metering, now accounts for 22% of the order book at ₹15,737 crores. NCC has already installed 15 lakh meters and achieved go-live for its Maharashtra projects. However, this segment is capital-intensive; the company expects to invest ₹150-200 crores in equity this year alone, out of a total ₹430 crore commitment. Management remains open to bringing in a strategic partner to share this equity burden.

    03

    Andhra Pradesh Capital City Revival

    The AP Capital City projects (Amravati) are a major focus, with outstanding receivables of ₹104 crores already starting to clear. Management confirmed that execution on these multi-package projects is set to begin in earnest within weeks. These projects are currently in the design and pre-development stage, and their transition to active construction is critical for NCC to meet its H2 FY26 revenue targets.

    04

    Working Capital and Debt Dynamics

    Consolidated net debt rose sharply to ₹1,497 crores, up from ₹695 crores in March 2025. This was driven by a seasonal reduction in government payments post-fiscal year-end and the need to fund mobilization for new projects. Unbilled revenue stands high at ₹6,442 crores (37% of revenue). Management expects debt to stabilize between ₹1,400-1,500 crores by year-end as execution picks up and payments normalize.

    05

    Segmental Diversification: Mining and Real Estate

    NCC is pushing for growth in non-EPC segments. The mining division has a revenue target of ₹2,600 crores for FY26, having already achieved ₹720 crores in Q1. In real estate, the company expects a top-line contribution of ₹350 crores, though revenue recognition is currently hampered by delays in obtaining Occupancy Certificates (OCs), which now take 4-6 months versus the previous 3-4 months.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.