Fundamental analysis of NCC

Business Overview:

NCC does construction of roads, buildings, irrigation, water and environment, electrical, metals, mining and railways. It also has interests in road and energy projects through its 62.1% owned subsidiary NCC Infrastructure Holdings Limited and in real estate through its 80% owned subsidiary NCC Urban Infrastructure. Company has presence in the Middle East through its subsidiaries in Muscat and Dubai

Data Source: Screener

Discussion and Analysis

• Low debt of Rs. compared to reserves of Rs.

• Dividend yield is low.

• The book value is less than the current market price.

• FCF is decent and is increasing. FCF is increasing with a minor decrease in 2023.

Estimated Share Price: In my opinion, the fair market value of NCC is approximately Rs.320, owing to a better than average incoming cash flow in the year 2022.

This is roughly twice than the current market price. Usually, this a good amount of cushion to be protected in case of a downfall.

Opinion: I feel that the company fundamentals are a mixed bag for NCC. Some points give us confidence, but usually it is advised to stay away if you find even one point that is not favorable. I would want to wait on the stock. See if the price corrects a little and the rest of the fundamentals improve a little.

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