In its latest research update, ICICI Securities reiterates a solid BUY recommendation for NCC Limited, setting the stage for a projected 24% upside as its orderbook and execution strategy paint a promising outlook for this leading infrastructure entity. NCC, battling short-term execution bottlenecks, shows signs of reinvigoration, buoyed by an enviable order pipeline and industry-best metrics. Investors tracking the construction sector will find actionable insights in the following breakdown.

NCC Remains Strong Play in Infrastructure Sector

ICICI Securities maintains a BUY rating on NCC Limited with a target price of Rs262. Despite temporary setbacks in execution, NCC’s formidable Rs701bn orderbook and strong sector diversification are set to drive revenue and earnings growth over the next three years. Management guidance, coupled with resilient operational strategies, supports confidence in the company’s trajectory, making this a noteworthy recommendation for aggressive equity portfolios. Investors are advised to keep NCC on their radar, with execution improvements anticipated from H2FY26 and order inflows reinforcing fundamental momentum.

Execution Picks Up After Temporary Lull

NCC’s Q1FY26 was marred by delays, with revenue sliding to Rs44bn, representing a 7% YoY drop. EBITDA stood at Rs4bn, down 10% YoY, and profit after tax settled at Rs1.9bn, down 5%. The primary culprit was deferred payments from authorities, especially in the water segment, throttling project delivery. However, ICICI Securities underscores that this bottleneck is transitional. Projects won in March 2025, collectively valued at about Rs200bn (30% of orderbook), are currently being mobilized and will begin to meaningfully contribute from the second half of FY26, with management guiding for at least 15% YoY revenue growth in the remainder of FY26 and EBITDA margins hovering around 9%. Execution improvements in key projects, namely smart meters in Maharashtra and the GMLR JV, provide early evidence of this turnaround.

Orderbook Demonstrates Strategic Depth and Scale

NCC boasts an orderbook of Rs701bn, translating to a book-to-bill ratio of 3.7x trailing twelve-month revenues—the highest in the sector. FY26 year-to-date already sees order wins totalling Rs65bn, with management maintaining guidance for Rs220bn in fresh order inflows for FY26. Importantly, the bidding pipeline is colossal, totalling Rs2.5trn. Sectoral spread ensures diversification across buildings, transportation, T&D, water, and railways, thereby insulating NCC from single-sector risk and supporting sustained revenue momentum. Building and transportation remain main growth drivers, as per management commentary.

Outlook: Earnings Momentum and Valuation Upside

ICICI Securities’ financial projections portray a robust growth trajectory for NCC. Over FY25–27E, earnings CAGR is expected at 15%, with revenue climbing from Rs192,053mn in FY25 to an estimated Rs245,060mn in FY27. Net profit should rise from Rs7,975mn to Rs10,751mn over the same period, with EPS set to grow from Rs12.7 to Rs17.1. Management’s risk discipline and capital allocation have historically enabled NCC to weather adverse business cycles, further fortifying investor confidence.

Stock Levels: Key Benchmarks for Traders and Investors

Current market price stands at Rs211. With the assigned target price at Rs262, investors are presented with a 24% upside potential. The 52-week range is Rs335 to Rs170. Market capitalization is Rs132bn, and free float sits at 78%. Relative price performance has been under pressure in the last year, but the fundamentals, order pipeline, and sector positioning indicate a likely improvement going forward.

ESG Scores: Governance Stands Out

NCC’s ESG profile exhibits stability, with flat overall improvement year-on-year but strong advances in governance (+1.2 points) and modest gains in environment (+0.6) and social (+0.4) factors. The overall score remains at 68.3, signifying the company’s commitment to sustainable business practices.

Risks: Execution and Order Inflow Remain Key

Potential downside risks persist if fresh order inflows fall short of management’s Rs220bn guidance or if execution rates do not accelerate as anticipated in H2FY26. Recent increases in working capital days—from 63 to 106—also merit monitoring, as do payment delays in large projects such as Jal Jeevan Mission and AP Capital building.

Strategic Projects Underway

Several high-value projects signify NCC’s sector presence: - Mumbai Metro: Rs23bn order, with Rs16bn subcontracted - Bangalore Metro: Rs6bn order, AP Capital building: Rs8bn - GMLR project: Rs63bn (NCC’s share Rs32bn) - BSNL project: Rs100bn, with billing to commence in Q3FY26 The company has also installed 1.5mn smart meters in Maharashtra and will invest Rs1–2bn equity in FY26 in this segment.

Investor Positioning and Shareholding Trends

Over the last year, institutional holdings have shrunk (33.2% to 29.4%) while promoter holding remains steady around 22%. Foreign institutional investors stand at 13.8%. This profile suggests near-term volatility but also scope for strategic institutional re-entry as execution momentum resumes.

Bottomline: Compelling Value, Execution Holds the Key

ICICI Securities sees NCC at a critical inflection point. The current Rs701bn orderbook, resilient sectoral spread, and imminent inflection in execution create a compelling narrative for investors aiming to benefit from India’s infrastructure supercycle. The Rs262 target price leaves room for capital appreciation, provided management navigates execution and working capital risks efficiently. NCC remains a top contender for aggressive equity portfolios riding the construction sector’s next wave.