Shares of infra major NCC have zoomed 80% from their 52-week low hit on June 21, 2022. NCC stock has zoomed from the yearly low of Rs 51 to Rs 92.80 in the current trading session, translating into returns of 80.39% in six months. The mid cap stock has fallen after two sessions. At 12:33 pm today, NCC stock was down 1.75% at Rs 92.70 against the previous close of Rs 94.35 on BSE. NCC stock is trading higher than the 20-day, 50-day, 100-day and 200-day moving averages but lower than 5-day moving averages. NCC share has gained 17.79% in one year and risen 10.23% since the beginning of this year. Market cap of the firm stood at Rs 5,813 crore. Total 0.97 lakh shares of the firm changed hands amounting to turnover of Rs 90.35 lakh on BSE.
Currently, NCC share is trading 4.31% away from the 52-week high of Rs 96.90 hit on December 14, 2022.
In terms of technicals, the relative strength index (RSI) of NCC stands at 64.1, signaling neither the stock is overbought or oversold. The stock has a one-year beta of 1, indicating average volatility during the period. The PE ratio of NCC stands at 13.57 signalling the stock is overvalued compared to its industry. The PE of infra and construction industry stands at 57.02.
In the December 2022 quarter, Rekha Jhunjhunwala, wife of late investor Rakesh Jhunjhunwala raised her stake in the construction firm. According to the shareholding pattern of NCC, Rekha Jhunjhunwala raised her stake in the company from 12.64 per cent in the September quarter to 13.09 per cent. These shares include those NCC shares as well that earlier belonged to her late husband Rakesh Jhunjhunwala. Rekha Jhunjhunwala purchased 28,47,666 NCC shares, amounting to 0.45 per cent of total paid up capital of the infrastructure company.
Rekha Jhunjhunwala owned 13.09 per cent stake or 8,21,80,932 shares of NCC in the December quarter. However, in the September 2022 quarter, Rekha Jhunjhunwala owned 7,93,33,266 shares or 12.64 per cent stake in Hyderabad-based NCC.
Here’s a look at what analysts said on the prospects of NCC stock after a strong rally in six months.
Abhijeet from Tips2trade said, "Increase in FII holdings coupled with an increase in stake by Rekha Jhunjhunwala has led to a strong uptrend in NCC stock price. 95.5 is a strong resistance on Daily charts. Investors should buy only on a close above this resistance for targets of 102.3-106.5 in the coming days. Strong support will be at 88.7."
Laxmikant Shukla, Technical Research Analyst, YES Securities said ,"The stock price has witnessed a sharp upside breakout of the neckline from its bullish head and shoulder pattern on the weekly chart. Present price action is expected to find support near the levels of Rs 64 where bullish crossover of 20 and 200 days SMA is seen. Weekly 14-period RSI shows positive traction. Hence, one may expect further strengthening of upside momentum in the stock prices ahead. Buying can be initiated near the foot of the falling trendline, which is placed at Rs 84-80 levels and wait for the upside target of Rs 118 while a keeping a stop loss below Rs 64 levels."
Mehul Kothari, AVP - Technical Research, Anand Rathi Shares and Stock Brokers said, "NCC’s order book at the end of Q2 FY23 on a standalone basis was Rs 40,000 crore approximately largely aided by Rs 7,117 crore worth of orders in H1 FY23. Additionally, the company received orders worth Rs 5,000 crore approx. in Q3 FY23. Going forward, the management expects the gained momentum in the order inflows to continue with its strong emphasis on a) buildings: affordable housing, b) water: higher traction being witnessed in Jal Jeevan mission, c) roads and expressways, d) metro and railways and e) mining segments. Overall, the management has guided for Rs.16,000 crore of order inflows during FY23. On the technical front; the stock is on the verge of a fresh range breakout. This breakout would get confirmed above Rs 97. A close above the same might result in an upside of around 10% in the coming weeks. At this point in time; short term support is placed at Rs 88."
ICICI Direct has assigned a buy call to the mid cap construction stock with a target price of Rs 110 apiece.
"The firm is firmly placed to capitalise on a huge infrastructure pipeline; continued momentum in awarding activities to translate into healthy order inflows. Strong order book to ensure topline growth (16% CAGR over FY22-25E) with margins stable at 10%. Focus on monetisation of non-core subsidiaries to bring in cash flows. Unwinding of receivables to provide liquidity boost; strengthening of balance sheet is likely with a gradual decline in debt," said ICICI Direct.
NCC Limited is engaged in construction/project activities in the infrastructure sector. The company is engaged in the infrastructure sector, primarily in the construction of industrial and commercial buildings, housing projects, roads, bridges and flyovers, water supply and environment projects, mining, power transmission lines, irrigation, and hydrothermal power projects, real estate development.
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