Edelweiss' research report on Nagarjuna Construction
Nagarjuna Construction’s (NCC) Q4FY17 revenue fell 13% YoY to INR 21bn (estimate INR 22bn) due to payment delays in a few state projects and demonetisation impact. While EBITDA margin tumbled 38bps YoY, falling interest cost (down 22% YoY) led to adjusted PAT rising 4% YoY to INR 1.1bn.
Outlook
Healthy balance sheet, falling interest cost and strong order intake prospects are key positives. We believe, order intake (which will determine revenue visibility) will be a key trigger going ahead. We maintain ‘BUY’ with SoTP-based target price of INR 121—INR 120/share from EPC business (18x FY19E P/E) and balance from BOT projects.
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