Why NBCC Is a Strong Buy: Debt-Free, High Growth & Bullish Chart Pattern
NBCC’s Strong Performance and Bright Future: A Simple
Summary
NBCC (National Buildings Construction Corporation) is
getting attention from investors and analysts because of its strong financial
health and potential to grow in the future. SEBI-registered analyst Rajneesh
Sharma is especially positive about the company and sees it as a great
investment opportunity. Here’s why:
1. Debt-Free and Financially Strong
One of the best things about NBCC is that it is completely
debt-free. This means the company doesn’t owe any money to banks or
lenders. It runs its operations using its own money and funds received in
advance from clients. In fact, NBCC has stayed debt-free for the last three
years. It also holds more than ₹700 crore in cash, giving it extra
financial safety.
2. Strong Business Segments
NBCC operates in three main areas:
- Project
Management Consultancy (PMC): This is the biggest part of its
business, making around ₹6,726 crore in revenue with a 7.6% profit margin.
- Real
Estate: This segment earned ₹516 crore with a 10.9% margin.
- Engineering,
Procurement, and Construction (EPC): Though smaller in size (₹28 crore
revenue), it has a high profit margin of 14.3%.
Overall, NBCC had an EBITDA margin of 5.8% (profit
before interest and taxes) and a PAT margin of 4.6% (net profit).
3. Strong Growth in Recent Years
Between 2023 and 2025:
- Revenue
grew by 18.8% per year
- Profit
after tax (PAT) increased by 37% per year
- Earnings
per share (EPS) rose by 26.1% each year
Profit margins also improved. The EBITDA margin rose from
4.85% to 5.22%, and PAT margin went up from 3.17% to 4.62%.
4. Efficient Use of Money
NBCC is very good at converting its operating profit into
real cash. Around 84% or more of its operating profit becomes cash,
which shows strong financial discipline. The company’s Return on Equity
(ROE) and Return on Capital Employed (ROCE) were both at 23.7%
in 2025—very healthy numbers.
Another positive indicator is its PEG ratio of 0.9,
which means the stock is fairly priced compared to its earnings growth.
5. Big Order Book and Future Targets
NBCC is working on large government projects such as Netaji
Nagar, Sarojini Nagar, and Amrapali. It expects its total orders to rise to ₹2
lakh crore in the next 2 to 3 years.
The company has also set strong financial goals:
- Revenue
target of ₹14,000–15,000 crore by FY26
- Profit
after tax of ₹2,000 crore by FY28
- Aim
to improve net margins to 8%
6. Safe Capital Strategy
NBCC does not plan to take loans. It will continue funding
its growth through the profits it earns. It also uses a bank-guarantee model
for working capital, which limits financial risk. The company has received a
credit rating of “AA / Stable”, showing good creditworthiness.
7. Technical Chart Looks Strong
NBCC’s stock chart is showing a cup-and-handle pattern
on the weekly chart. This pattern often leads to a price breakout. The breakout
zone is around ₹128–130, with a strong base around ₹73–74. As long as
the price stays above ₹130 with good trading volume, the stock is expected to
rise.
8. Strengths and Risks
Strengths:
- Debt-free
- High
liquidity
- Government
contracts provide steady work
- Profits
and returns are improving
Risks:
- Delays
in large projects
- Changes
in government policies
- Tough
competition in public sector contracts
9. Market Reaction
The stock has gone up by 14.5% in 2025 so far. On
social media platforms like Stocktwits, investor sentiment is “neutral,” and
trading volumes are normal.
Source- Asianet News
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