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Epic Research
NCC (Buy)
CMP: ₹80.15
Target: ₹170
NCC Ltd is engaged in the construction/ project activities in the infrastructure sector. The company is involved in the construction of industrial and commercial buildings, roads, bridges and flyovers, water supply and environment projects, housing, power transmission lines, irrigation and hydrothermal power projects and real estate development. Its geographic segments include domestic as well as overseas. Its business divisions include buildings and housing, roads, electrical, water and environment, irrigation, railways, power, metals, mining and international.
NCC has strong order inflow and current order book provide good near- to long-term visibility for investment. NCC is currently trading at 10x of FY 21 and 9.7x of FY20 earnings estimates. Business diversification places company amongst the best in industry to gain from infra projects in Indian growth story. On EV/EBITDA basis, stock is trading at 6.9x, at a discount when compared to peers. We recommend buying NCC in range of ₹75-88 for a target of ₹170 valuing company at conservative 19x of FY20 earnings.
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