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NCC secures orders worth `540cr
Nagarjuna Construction Company (NCC) has secured four new orders aggregating to
`540cr from different clients. All the orders relate to infrastructure works and are expected
to be executed in 18–24 months. With these new orders, outstanding order book now
stands at ~`17,000cr (3.6x FY2010 revenue). We have valued NCC on an SOTP basis.
The company’s core construction business is valued at a P/E of 14x FY2012E EPS of `9.8
(`138/share), NCC International is valued at a P/E of 10x FY2012E EPS of `2.4
(`24/share), whereas its real estate (`7/share) and road and power (`32/share) ventures
are valued at 1.5x each equity invested.
At the CMP of `152, the stock is trading at 15.5x FY2012E P/E and 1.5x FY2012E P/B on
a standalone basis. Owing to diversified order book along with exposure in most of the
growth sectors, we maintain a Buy rating on the stock with a Target Price of `201.
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