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Among various favorite stocks of Rakesh Jhunjhunwala, the construction service provider NCC became more special. Gains from this stock have crossed Rs 600 crore. Rakesh Jhunjhunwala seen increasing his holding in NCC shares over the past few months. The stock has become a new multibagger now. On Monday, NCC shares finished at Rs 99.20/share up by 1.38%. The stock touched an intraday high and low of Rs 101 and Rs 125.60 respectively.

NCC management seems confident about maintaining revenues and margins in the upcoming years at current levels. The management stated that it has started FY20 with ~INR410bn order book and assuming ~INR61bn projects get canceled. Post which NCC will be left with ~INR350bn worth of orders. This will be enough to ensure the companys FY20 top-line at the same level to FY19 revenue of ~INR120bn. Also, the company will be able to maintain EBITDA and PAT margins too at FY19 level (11.8% and ~5%, respectively) in the upcoming years.

Analysts at Edelweiss also said that the companys diversified segmental/geographical presence will help it tackle this issue. Building lower order accretion and revenue and higher working capital requirements with a downward revision they maintained BUY with revised SOTP-based TP of INR135INR134/share from the EPC business (12x P/E) and the balance from BOT projects.

Recently, Binod Modi, Research Analysts at Reliance Securities also said, NCC has exhibited an overall improvement in 4QFY19 also done well in terms of reducing its exposure towards its group companies and subsidiaries, as it reduced its exposure by Rs2.7bn in FY19.
Further, the broking firm expects NCCs both revenue and earnings growth at a healthy 14% CAGR over FY19- FY21E. On the basis of the same upwardly revising earnings estimates by 7%/9% for FY20E/FY21E to factor in better-than-expected performance BUY recommendation on the stock with a revised Target Price of Rs170 (from Rs165 earlier) was maintained for the upcoming period.

As of March 2019, Jhunjhunwalas holding in NCC stands at 10.77% with 64,708,266 equity shares worth Rs 647 crore.

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