NBCC India Ltd shares surged over 10% on Wednesday on the news that the state-run construction firm lay out expansion plans, and stronger role abroad.
On Tuesday, Financial Express (FE) reported that the company has solidified ambitious expansion plans, as part of which it would expand its presence in smart-city and aviation projects, speed up the redevelopment of various government buildings, and capitalise on its own land assets.
Further, the company plans to significantly increase its presence in overseas markets by looking into chances in nations like Saudi Arabia, Malaysia, the Seychelles, and Mauritius.
The zero-debt company's goal for the current fiscal year is to acquire new orders totaling 6,500 crore rupees.
On November 16, in Q2FY23 earnings conference call, PK Gupta, chairman and managing director of NBCC India had updated that the company has entered for the first time in smart-city projects, and secured a work of 314 crores rupees in Puducherry Smart City. Another work of Aligarh smart-city has been awarded at a cost of 50 crores rupees.
According to analysts, last week itself the stock prices confirmed a technical price breakout, and the follow up move is visible today backed by strong volumes. “Further upside can be expected towards 46, and the support level is at 38,” said an analyst.
Currently, the stock has gained 54.99% from 52-week low of 26.6, while the stock price underperformed the its sector by 10.96% in the past year.
On November 14, the company reported its July-September quarter results where its consolidated net profit jumped 34% on year to 95.5 crore rupees, and consolidated net sales rose 8.4% to 2,013 crore rupees.
According to brokerage house, Anand Rathi Share and Stock Brokers Ltd, the company’s Q2FY23 was comforting owing to the gradually rising execution pace at its project management consultant/redevelopment projects, and to its own higher-margin real estate projects contributing more.
The brokerage said that however, the progress on tendering continues to lag expectations.
“For it to realise the true potential of its large order backlog, tendering is the key,” it added.
Though potential exists, Anand Rathi feels it prudent to retain its ‘hold’ rating until it sees any considerable traction in tendering.
According to a Mintgenie poll, four analysts have a ‘hold’ call on the stock.