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    NCC

    NCCGood
    Construction·16 May 2025
    Management Summary

    NCC closed FY25 with a record-high order book and strong order inflows that significantly outperformed initial guidance. While revenue growth was modest at 5-7%, management is pivoting towards higher execution in FY26 with a 10% growth target. The company is strategically managing its debt by shifting from high-cost mobilization advances to cheaper bank loans, while preparing for significant capex in tunneling and smart meter projects.

    Highlights

    8

    • Achieved highest-ever order book of ₹71,568 crores as of March 31, 2025.

    • FY25 order inflows reached ₹32,888 crores, exceeding the upper band of guidance by 50%.

    • Standalone FY25 revenue grew 5% YoY to ₹19,205 crores, with EBITDA margin at 9.09%.

    • Consolidated FY25 revenue stood at ₹22,199 crores, representing 7% YoY growth.

    • Net debt reduced significantly in Q4 to ₹710 crores from ₹2,344 crores in Q3 FY25.

    • Management guided for 10% revenue growth and ₹22,000-25,000 crores in order inflows for FY26.

    • Andhra Pradesh capital city projects contribute ₹9,000-9,500 crores to the current order book.

    • Declared a dividend of 110% (₹2.20 per share) for the financial year.

    Concerns

    1

    • Government Payment Delays

    What Changed2

    vs Q1 FY26

    Guidance items6 → 5 (-1)Risks discussed3 → 4 (+1)
    Key financials

    Metrics

    6

    Periods

    2

    Headline

    5
    • Revenue (Standalone)
      ₹19,205 Cr
      YoY+5%
    • EBITDA Margin (Standalone)
      9.1%
    • Order Book
      ₹71,568 Cr
      YoY+18.4%
    • EPS
      ₹12.1
      YoY+19.8%
    • Net Debt
      ₹710 Cr
      YoY+37.3%QoQ-69.7%

    FY25

    1
    • Order Inflow
      ₹32,888 Cr

    Segment breakdown

    • Buildings₹22,440 Cr33.6%
    • Transportation₹17,929 Cr26.8%
    • Electrical T&D₹16,666 Cr25.0%
    • Irrigation₹4,189 Cr6.3%
    • Mining₹5,555 Cr8.3%
    Donut· Share of Order Book

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    Revenue Growth
    10%
    		Medium
    Other
    Order Inflow
    ₹22,000 - ₹25,000 crores
    		High
    Other
    Smart Meter Investment
    ₹280 crores
    		High
    Margin
    EBITDA Margin
    9% to 9.25%
    		Medium
    Capex
    Standalone Capex
    ₹750 crores
    		High

    Risks & concerns

    6
    RiskSeverity

    Government Payment Delays

    ₹1,000 crores pending from Jal Jeevan Mission; execution slowed to match payment pace. — Both acknowledged

    high

    Working Capital Intensity

    Unbilled revenue stands at 31% of Q4 turnover (₹5,937 crores). — Management acknowledged

    medium

    Execution Bottlenecks

    Land acquisition, permissions, and drawing approvals cited as key constraints for faster execution. — Management acknowledged

    medium

    Subsidiary Impairment

    Impairment taken for Oman subsidiary due to low realization probability. — Management acknowledged

    low

    Areas of Evasion(2)

    • Specific breakup of the prospective ₹2.55 lakh crore tender pipeline by division.
    • The exact 'bought-out' component in the large BSNL order.

    Q&A highlights

    3

    “Primarily, this is dependent on the timely payments. It is not only about the execution. At the same time, we have to be cognizant of the fact that how much working capital we are committing.”

    Explains why revenue growth (10%) is conservative relative to a massive order book (₹71k cr), citing working capital discipline and client payment cycles.

    asked by Shravan Shah, Dolat Capital

    2 min read5 chapters

    Detailed Narrative

    01

    Record Order Book Provides Multi-Year Visibility

    NCC ended FY25 with its highest-ever order book of ₹71,568 crores, a significant jump from ₹60,437 crores at the start of the year. Order inflows for the full year were exceptionally strong at ₹32,888 crores, which was 50% higher than the upper end of management's initial guidance. This massive backlog provides strong revenue visibility for the next 3-4 years, particularly in the Buildings (31%) and Transportation (25%) segments.

    02

    Conservative FY26 Execution Guidance

    Despite the record order book, management has guided for a relatively conservative 10% revenue growth in FY26. This caution stems from external factors such as land acquisition delays, regulatory approvals, and a strategic decision to link execution pace with client payment cycles. Management emphasized that they will not commit excessive working capital to projects where payments are delayed, prioritizing balance sheet health over aggressive top-line growth.

    03

    Strategic Shift in Financing and Debt Management

    The company's gross debt stood at ₹1,484 crores at year-end, up from ₹1,005 crores YoY. Management explained this increase as a deliberate shift from client mobilization advances to bank loans. With mobilization advances now costing 11-12% due to interest clauses, NCC is opting for bank debt at 9-9.3% to reduce finance costs. Net debt, however, saw a sharp sequential reduction of ₹931 crores in Q4 FY25.

    04

    Major Capex and Investment Cycle Ahead

    NCC has planned a significant standalone capex of ₹750 crores for FY26, a sharp increase from ₹305 crores in FY25. A major portion of this (₹300 crores) is dedicated to purchasing Tunnel Boring Machines (TBMs) for the Mumbai GMLR project. Additionally, the company plans to invest ₹280 crores in smart meter projects over the next two years, with ₹130 crores expected to be deployed by Q2 FY26.

    05

    Segmental Performance and Key Project Updates

    The Electrical T&D segment has become a major pillar, contributing 23% to the order book. In the BSNL Phase 2 project, NCC has already included ₹7,127 crores in its order book, representing the EPC portion to be executed over 3 years. In Andhra Pradesh, the company holds ₹9,000-9,500 crores in orders for capital city infrastructure, with execution now gaining momentum following recent government clearances.

    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.