Banking on its strengths of turning around stalled housing projects, Navratna PSU NBCC (India) Ltd has proposed a three-phase construction plan to complete 50,000 Supertech apartments across 17 projects over the next three years. NBCC India has also been entrusted with the responsibility of developing a township worth Rs 15,000 crore in Srinagar. Add to that, the Amrapali project is going on in full swing, with NBCC planning to execute the same by end-FY25.
“An improvement in order intake, execution and margins along with traction in real estate monetisation bode well for the company," said Nuvama Institutional Equities. The brokerage, however, retained its ‘Hold’ rating on the multibagger stock with an unchanged target price of Rs 198. .
On Tuesday, the scrip was trading at Rs 175.25 on BSE, up 0.83 per cent. The stock is up 114 per cent year-to-date and 190 per cent in the past one year. Nuvama's target on NBCC India suggests a 13 per cent potential upside over the prevailing market price.
The domestic brokerage said NBCC India is well placed for growth, with a robust order book of Rs 81,300 crore and book-to-bill of 7.6 times. It cited strong order accretion with year-to-date order wins at Rs 19,800 crore against Rs 23,500 crore in FY24; and improving real estate monetisation, as a reasons behind its optimism.
To be sure, the real estate monetisation at the Nauroji Nagar project has been at Rs 13,400 crore against an expected realisation of Rs 12,500 crore.
“A buoyant realty cycle is resulting in improved opportunities for the company with many PSUs/government looking to monetise surplus land holdings,” it said.
Nuvama Institutional Equities noted that the Amrapali project contributed Rs 370 crore to revenue in Q1FY25 against Rs 1,800 crore in FY24. Overall, 84 per cent of the work has been completed on the project (Rs 7,100 crore execution till June 2024. The company has sold 6,300 units in this project for Rs 3,650 crore. NBCC has also been awarded another Rs 10,000 crore work order in the Amrapali project by way of additional FAR, which entails construction of 7,500 new units.
In Netaji Nagar, work on projects worth Rs 1,400 crore is underway while two tenders of Rs 1,700 crore are in the pipeline. Works worth Rs 6,600 crore across 10 phases are going on in Sarojini Nagar.
Nuvama said the company expects to receive operational certificate soon after which it would proceed for bulk sale. NBCC has already sold Rs 1,300 crore to date in this project, it said.
The central government plans to approve commercialisation of 45 acres of land in Delhi (to be undertaken by NBCC) in order to raise Rs 20,000 crore to fund the ongoing redevelopment of seven government colony, the brokearge noted.