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    NCC

    NCCMixed
    Construction·7 Nov 2025
    Management Summary

    NCC delivered a challenging second quarter characterized by a double-digit revenue decline and the withdrawal of annual guidance. While the order book remains at record levels, execution was severely hampered by an extended monsoon and slow payment cycles, particularly in the Water segment. Management is pivoting towards higher capex to support a massive new mining contract while navigating working capital pressures.

    Highlights

    8

    • Consolidated Revenue reported at ₹4,585 crores, representing a 12% YoY decline.

    • Consolidated EBITDA margin stood at 8.66%, a slight expansion from 8.52% YoY.

    • Order book remains robust at ₹71,957 crores as of September 30, 2025.

    • Management officially withdrew FY26 guidance citing unprecedented rains and elongated payment cycles.

    • Annual Capex guidance revised upward to ₹1,050 crores from ₹750 crores due to a large mining order.

    • Net debt increased by ₹263 crores during the quarter to reach ₹1,890 crores.

    • Jal Jeevan Mission (JJM) receivables remain high at approximately ₹1,700 crores.

    • New orders worth ₹6,223 crores booked in Q2, primarily in Buildings, Water, and Irrigation.

    Concerns

    1

    • Elongated Payment Cycles

    What Changed2

    vs Q3 FY26

    Tone shiftWeak → MixedGuidance items4 → 5 (+1)
    Key financials

    Metrics

    6

    Periods

    2

    Headline

    5
    • Consolidated Revenue
      ₹4,585 Cr
      YoY-12%
    • Consolidated EBITDA Margin
      8.7%
    • Consolidated PAT Margin
      3.4%
    • Order Book
      ₹71,957 Cr
      QoQ+1.2%
    • Net Debt
      ₹1,890 Cr
      YoY+16%QoQ+26%

    H1

    1
    • Order Inflow
      ₹9,881 Cr

    Segment breakdown

    • Buildings₹22,492 Cr31.3%
    • Transportation₹17,361 Cr24.1%
    • Electrical₹15,013 Cr20.9%
    • Water and Railway₹7,553 Cr10.5%
    • Irrigation₹5,394 Cr7.5%
    • Mining₹4,137 Cr5.7%
    Donut· Share of Order Book Value

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    Revenue Growth Guidance
    Withdrawn
    		Low
    Capex
    Annual Capex
    ₹1,050 crores
    		High
    Margin
    EBITDA Margin Lower Band
    9%
    		Medium
    Other
    Incremental Smart Meter Investment
    ₹280 crores
    		High
    Other
    Vizag Land Deal Recovery
    ₹80-120 crores
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Elongated Payment Cycles

    Specifically cited as a primary reason for withdrawing annual guidance; clients are not making stipulated payments on time. — Management acknowledged

    high

    Rising Debt Levels

    Net debt increased by ₹263 crores in Q2 due to working capital pressure and slow receivables. — Analyst acknowledged

    medium

    Execution Delays due to Monsoon and ROW

    Unprecedented rains in AP, Karnataka, and Maharashtra, along with Right of Way (ROW) delays, hampered Q2 turnover. — Management acknowledged

    medium

    Areas of Evasion(2)

    • Specific details on JJM client information (cited as confidential).
    • Refusal to provide even qualitative color on H2 performance expectations.

    Q&A highlights

    3

    “There is unprecedented rains that happened in the Q2. In addition to that, there were elongated payment cycle. These are the 2 main reasons which has caused a drop in the turnover.”

    Explains the disconnect between a record order book and declining revenue, highlighting execution and cash flow bottlenecks.

    asked by Mohit Kumar, ICICI Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Guidance Withdrawal and Macro Headwinds

    NCC management took the significant step of withdrawing its FY26 revenue guidance, citing a 'challenging external business environment.' The primary drivers were unprecedented🌐 and extended monsoons in key states like Andhra Pradesh, Karnataka, and Maharashtra, which stalled work fronts. Additionally, elongated payment cycles from government clients have forced the company to prioritize working capital management over aggressive execution, leading to a 12% YoY decline in consolidated turnover to ₹4,585 crores.

    02

    Order Book Resilience vs. Execution Challenges

    Despite revenue headwinds, the order book remains a point of strength at ₹71,957 crores, providing over 3.5x revenue visibility. The Building division remains the largest contributor at 31% (₹22,492 crores), followed by Transportation at 24%. However, management noted that approximately ₹28,000 crores of orders received late last fiscal year are only now entering the execution phase in Q3 and Q4 FY26 due to standard 5-6 month mobilization and clearance periods.

    03

    Working Capital and Debt Dynamics

    Working capital intensity increased during the quarter, with net debt rising by ₹263 crores to reach ₹1,890 crores. Debtors outstanding decreased slightly to ₹3,277 crores, but working capital days increased from 77 to 78 days. The company is grappling with ₹1,700 crores in receivables from the Jal Jeevan Mission (JJM), which management claims are 'churning' but remain at the same absolute level as the previous quarter, indicating slow net recovery.

    04

    Strategic Mining Pivot and Capex Expansion

    In a notable strategic shift, NCC raised its annual capex guidance from ₹750 crores to ₹1,050 crores. This 40% increase is primarily driven by a large new mining order worth approximately ₹6,800 crores received in October. This project requires significant upfront equipment investment but is expected to provide long-term revenue stability and potentially better margins than traditional EPC work.

    05

    Smart Metering and Subsidiary Performance

    The company's consolidated performance was bolstered by its subsidiaries, which contributed an incremental ₹50 crores in profit compared to standalone results. Key contributors include the Pachhwara Coal Mining project and the nascent Smart Metering business. NCC has invested ₹300 crores in smart meters to date and plans an additional ₹280 crores over the next 12-18 months, with execution being captured both at the SPV and EPC levels.

    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.