NCC Limited — Q4 FY25 earnings call

Call held 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

  • 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

  • Government Payment Delays

Key financials

2 periods

Headline

  • 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

  • Order Inflow
    ₹32,888 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
₹66,779 Cr Total
  • Buildings ₹22,440 Cr 33.6%
  • Transportation ₹17,929 Cr 26.8%
  • Electrical T&D ₹16,666 Cr 25.0%
  • Mining ₹5,555 Cr 8.3%
  • Irrigation ₹4,189 Cr 6.3%

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · Medium confidence 10%
    The revenue growth of 10% and EBITDA margin between 9% to 9.25%.

    — Neerad Sharma, Head Strategy and Investor Relations

Other

  • Order Inflow Other · FY26 · High confidence ₹22,000 - ₹25,000 crores
    we are pleased to share with you a guidance of INR22,000 crores to INR25,000 crores for the order inflow.

    — Neerad Sharma, Head Strategy and Investor Relations

  • Smart Meter Investment Other · FY26-27 · High confidence ₹280 crores
    About INR280 crores is the total investment that need to be made. And we are expecting to do around INR130 crores by Q2.

    — Sanjay Pusarla, CFO

Margin

  • EBITDA Margin Margin · FY26 · Medium confidence 9% to 9.25%
    EBITDA margin between 9% to 9.25%.

    — Neerad Sharma, Head Strategy and Investor Relations

Capex

  • Standalone Capex Capex · FY26 · High confidence ₹750 crores
    And capex for FY '26 is at INR750 crores.

    — Sanjay Pusarla, CFO

Risks & concerns

  • Government Payment Delays

    high

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

    Both acknowledged

  • Working Capital Intensity

    medium

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

    Management acknowledged

  • Execution Bottlenecks

    medium

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

    Management acknowledged

  • Subsidiary Impairment

    low

    Impairment taken for Oman subsidiary due to low realization probability.

    Management acknowledged

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 direct
Revenue Growth Guidance vs Order Book Direct
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

Jal Jeevan Mission (JJM) Payment Delays Direct
For the last 7, 8 months, there is a slow progress because of the delay in the payments by the client... still about INR1,000 crores are yet to receive it.

Highlights a significant liquidity risk in a major government scheme, with ₹1,000 crores in receivables still pending from the central government.

Asked by Mohit Kumar, ICICI Securities

Shift in Debt Composition Direct
Wherever the cost of the mobilization advance is more than 11% or 12%, we are not availing that mobilization advance... relying on the bank loans where we are getting around 9% to 9.3%.

Reveals a strategic shift in financing where the company prefers bank debt over client advances to save on interest costs, explaining the rise in gross debt.

Asked by Ankita Shah, Elara Capital

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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