NCC Limited — Q1 FY26 earnings call

Call held 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

  • 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

  • Payment delays in SWSM (JJM) projects

Key financials

2 periods

Headline

  • Revenue (Standalone)
    ₹4,430 Cr
    YoY -6.7%
  • EBITDA Margin (Standalone)
    9%
  • 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

  • Order Inflow
    ₹3,658 Cr

What they filed

Q1 FY27: revenue up 12.2%, net profit up 11.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue5,196 5,345 6,131 5,179 4,543 −13%4,868 −9%6,233 +2%5,812 +12%
EBITDA443 441 555 456 393 −11%436 −1%550 −1%545 +20%
Net profit175 206 265 205 167 −5%135 −34%217 −18%229 +12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Order Book
₹62,004 Cr Total
  • Buildings ₹23,577 Cr 38.0%
  • Transportation ₹17,957 Cr 29.0%
  • Electrical T&D ₹15,737 Cr 25.4%
  • Mining ₹4,733 Cr 7.6%

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · Medium confidence 10%

    Previously 15% → 10%

    Probably in the quarter 3 and quarter 4, we will be looking at numbers -- achieving these numbers... maintain the guidance in the coming quarters.

    — Sanjay Pusarla, CFO

  • Order Inflow Revenue · FY26 · High confidence ₹22,000-25,000 crores
    The order inflow guidance that we have shared with the Street is a band INR22,000 crores to INR25,000 crores for FY '26.

    — Neerad Sharma, Head Strategy

Margin

  • EBITDA Margin Margin · FY26 · High confidence 9-9.25%
    9% is definitely we are expecting that we'll be reaching that 9%. We'll be maintaining sustaining that level.

    — Sanjay Pusarla, CFO

Capex

  • Annual Capex Capex · FY26 · High confidence ₹750 crores
    We have budgeted a capex of INR750 crores for the regular projects.

    — Sanjay Pusarla, CFO

Debt

  • Net Debt Level Debt · FY26 · Medium confidence ₹1,400-1,500 crores
    But we expect that we may end up at around INR1,400 crores to INR1,500 crores.

    — Neerad Sharma, Head Strategy

Other

  • Mining Revenue Other · FY26 · High confidence ₹2,600 crores
    For mining, we have set a target of about INR2,600 crores for the current year.

    — Sanjay Pusarla, CFO

Risks & concerns

  • Payment delays in SWSM (JJM) projects

    high

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

    Management acknowledged

  • Sharp increase in Net Debt

    medium

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

    Analyst acknowledged

  • Systemic Labour Shortage

    medium

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

    Both acknowledged

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 direct
Revenue Degrowth and FY26 Ask Rate Direct
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

Smart Meter Equity and Partnering Direct
INR430 crores is the total equity that is required over a period of 1.5 year... Still, we have not shelved that proposal [for a partner]. We are still active on that.

Clarifies the cash commitment for the smart meter business and the potential for equity dilution to manage the balance sheet.

Asked by Vaibhav Shah, JM Financial

Andhra Pradesh Capital City Execution Direct
It is going to happen maybe in the couple of weeks... we started even the initial billing also.

Confirms that the high-profile Amravati projects are finally moving from design to active construction.

Asked by Jainam Jain, ICICI Securities

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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