NBCC‘s share price has remained under pressure ever since the company posted its earnings for the quarter ended September. However, analysts at Nuvama think the stock can bounce back.

The NBCC Analyst: Analysts at Nuvama upgraded the stock’s rating to “buy” from “hold” with a price target of ₹133. The target indicates an around 47% upside from the stock’s last closing price of ₹89.90.

The NBCC Thesis: Improved order intake, execution, and margins, coupled with progress in real estate monetization, are seen as positives by the analysts. The brokerage added that following the recent correction in the stock, it is upgrading the PSU’s rating.

Nuvama highlighted that NBCC’s revenue for the September quarter grew 19% year-on-year (YoY) and 15% sequentially to around ₹2,460 crore. However, the brokerage noted that the EBITDA margin declined by around 60 basis points YoY and 20 basis points quarter-on-quarter (QoQ) to 4.1%, which weighed on the adjusted profit after tax (PAT).

The company has guided for a revenue of ₹13,000 crore in FY25, up from ₹10,400 crore in FY24. The construction major expects EBITDA margins to improve to 5.5–6% (from 4.9% in FY24) and PAT margins to rise to 6–7%. The brokerage added that NBCC is also targeting a 20% YoY revenue growth in FY26.

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The brokerage also mentioned the company’s strong order. NBCC’s consolidated order book grew QoQ to ₹84,400 crore in the September quarter, compared to ₹81,000 crore in the previous quarter.

Of this, around ₹22,000 crore worth of projects are currently under execution. The company awarded contracts worth ₹3,600 during Q2FY25 and ₹7,300 crore in the first half of FY25, with plans to award ₹14,000 crore–15,000 crore worth of projects for the entire fiscal year, the brokerage noted.

While the company’s book-to-bill ratio stands at a robust 7.6x, around 45% of its order book comprises self-revenue-generating projects, where the pace of real estate monetization will play a critical role, according to Nuvama.

The brokerage noted that NBCC has fully sold its World Trade Center project and plans a bulk sale for the Sarojini Nagar project once the occupancy certificate is received. In the Amrapali project, the company has sold inventory worth ₹3,650 billion so far.

Price Action: NBCC’s share price was up 0.22% to trade at ₹89.80 on Monday morning.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.