NCC Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

NCC faced a challenging third quarter characterized by a 9% revenue contraction as payment delays in the Jal Jeevan Mission (JJM) projects stalled execution. Despite these headwinds, the company maintained a strong bidding momentum, pushing its order book to nearly ₹80,000 crores. The primary concern remains the spike in debt and working capital intensity, though management expects a recovery in Q4 as payments from the central government have started to flow in January 2026.

Highlights

  • Consolidated Revenue declined 9% YoY to ₹4,900 crores due to execution headwinds in JJM and Buildings segments.

  • Consolidated EBITDA margin remained resilient at 8.96%, up from 8.25% in the previous year.

  • Order Book reached a record ₹79,571 crores as of December 31, 2025, with Q3 inflows of ₹12,430 crores.

  • Net Debt increased significantly by ₹865 crores during the quarter to ₹2,830 crores, driven by slow receivables and capex.

  • Jal Jeevan Mission (JJM) execution was minimal at ₹82 crores in Q3 due to payment delays from the UP government.

  • Management formally withdrew FY26 revenue guidance, citing uncertainty in client payment cycles and permissions.

  • Standalone PAT stood at 2.01% (₹82 crores) compared to 3.93% in the previous year's quarter.

Concerns

  • Government payment delays (JJM UP)

  • Working Capital Intensity

Key financials

  1. Consolidated Revenue ₹4,900 Cr -9%YoY
  2. Consolidated EBITDA Margin 9%
  3. Consolidated PAT ₹122.46 Cr -36.6%YoY
  4. Order Book ₹79,571 Cr +11.2%QoQ
  5. Net Debt ₹2,830 Cr +20.7%YoY
  6. Working Capital Days 119 days

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

  • Buildings
    31% Order Book Share-14% 9M Growth
  • Transportation
    22% Order Book Share
  • Electrical T&D
    18% Order Book Share₹13,523 Cr Standalone Order Book
  • Mining
    13% Order Book Share

Guidance & targets

Capex

  • Annual Capex Budget Capex · FY26 · High confidence 1,050
    As against the budgeted capex of INR1,050 crores for regular projects, it was revised to INR1,050 crores from INR750 crores.

    — Sanjay Pusarla, CFO

Debt

  • Gross Debt Level Debt · by March 2026 · Medium confidence 2,400
    And the debt level somewhere around INR2,400 crores, around that level it will be there [by year end].

    — Sanjay Pusarla, CFO

Revenue

  • FY26 Revenue Guidance Revenue · FY26 · Low confidence Withdrawn

    Previously 10% growth → Withdrawn

    We have formally withdrawn -- that is no guidance as we speak for FY '26.

    — Neerad Sharma, Head Strategy

Other

  • Smart Meter Investment Remaining Other · FY27 · Medium confidence 120-150
    About INR150 crores -- INR120 crores, I think, is remaining now... Obviously, it has to be done [in FY27].

    — Sanjay Pusarla, CFO

Risks & concerns

  • Government payment delays (JJM UP)

    high

    Execution in Q3 was stalled as payments were not forthcoming; only ₹82cr executed vs ₹4,000-5,000cr annual target.

    Both acknowledged

  • Working Capital Intensity

    high

    Unbilled revenue stands at a high 44% of turnover (₹7,129cr) due to lack of certification by clients.

    Management acknowledged

  • Rising Debt and Interest Costs

    medium

    Net debt jumped to ₹2,830cr; interest-bearing mobilization advances increased to 67% of total advances.

    Analyst acknowledged

Areas of evasion (3)

  • Specific revenue growth targets for Q4 FY26
  • Detailed reasons for the 14% degrowth in the Buildings segment beyond JJM impact
  • Specific timelines for the Vizag real estate receivable

Q&A highlights

1 direct
Execution delays and guidance withdrawal Partial
We have witnessed headwinds in the third quarter on the execution and profitability parameters... we have formally withdrawn -- that is no guidance as we speak for FY '26.

Highlights the severity of the JJM payment crisis and management's lack of visibility on the full-year recovery.

Asked by Parikshit Kandpal, HDFC Securities

Debt increase of ₹1,000 crores Direct
The money what we have received from JJM is in the month of January... We received very less amount in quarter 3. That is one reason. The other reason is on the capex.

Explains the sharp deterioration in the balance sheet due to the mismatch between execution costs and government receipts.

Asked by Parikshit Kandpal, HDFC Securities

Degrowth in the core Buildings segment Partial
Some of the projects that we are doing in the JJM, Building plays an important role in that, right? So some of the impact that you are talking about is because of that factor also.

Reveals that the execution slowdown is not isolated to water projects but has bled into the core buildings segment.

Asked by Shravan Shah, Dolat Capital

2 min read 5 chapters

Detailed narrative

JJM Payment Crisis Stalls Execution

The third quarter was heavily impacted by payment delays in the Jal Jeevan Mission (JJM) projects in Uttar Pradesh. Execution for these projects was a mere ₹82 crores in Q3, significantly below the run-rate required to meet the initial annual target of ₹4,000-5,000 crores. Management noted that while ₹560 crores was finally received in January 2026, the lack of certification and payments in Q3 led to a surge in unbilled revenue to ₹7,129 crores.

Debt Levels Surge on Working Capital Stress

Net debt rose sharply to ₹2,830 crores from ₹1,890 crores at the start of the quarter. This increase was attributed to the slow realization of JJM receivables and continued capex spending. The debt-to-equity ratio climbed to 0.40x from 0.21x in March 2025. Management aims to bring gross debt down to ₹2,400 crores by March 2026, contingent on the timely release of government funds.

Order Book Reaches Record Highs

Despite execution woes, NCC's order book remains a bright spot, standing at ₹79,571 crores as of December 31, 2025. The company secured fresh orders worth ₹12,430 crores during the quarter, with a further ₹2,457 crores added in January. The book is well-diversified, with Buildings (31%), Transportation (22%), and Electrical T&D (18%) being the largest contributors.

Guidance Withdrawal Reflects Uncertainty

Management took the unusual step of formally withdrawing its FY26 revenue guidance, which was previously set at 10% growth. They cited 'headwinds on execution and profitability parameters' and an inability to predict the exact timing of client payments and regulatory permissions. This defensive stance suggests that Q4 recovery may not be enough to offset the year-to-date shortfall.

Mining and Smart Metering Outlook

The company is mobilizing for a major new mining project at Amrapali in Jharkhand, valued at ₹6,800 crores over seven years, with work expected to start in March 2026. In the smart metering segment, NCC has invested ₹377 crores to date across two projects, with an additional ₹120-150 crores of investment planned for FY27 to complete the rollout.

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