NBCC Company analysis

Industry Profile  : The real estate sector is one of the most globally recognized sectors. In India, real estate is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade. The Indian real estate market is expected to touch US$ 180 billion by 2020. The housing sector alone contributes 5-6 per cent to the country’s Gross Domestic Product. The real estate sector comprises four sub sectors – housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. It is also expected that this sector will incur more non-resident Indian (NRI) investments in both the short term and the long term. Bengaluru is expected to be the most favored property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.

India’s rank in the Global House Price Index has jumped 13* spots to reach the ninth position among 55 international markets, on the back of increasing prices in mainstream residential sector.   The Government of India has been supportive to the real estate sector. In August 2015, the Union Cabinet approved 100 Smart City Projects in India. The Government has also raised FDI limits for townships and settlements development projects to 100 per cent. Real estate projects within the Special Economic Zone (SEZ) are also permitted 100 per cent FDI. In Union Budget 2017-18, allocation of Rs 23,000 crore (US$ 3.57 billion) has been made for Pradhan Mantri Awaas Yojana – Gramin, with a target to complete 10 million houses in rural areas by 2019. The government has also released draft guidelines for investments by Real Estate Investment Trusts (REITs) in non-residential segment.

Company Profile  :  The company is operating in civil engineering and construction sector. The Company operates through three segments: Project Management Consultancy (PMC), Real Estate Development, and Engineering, Procurement and Construction (EPC).

the company is operating under PMC section with management and consultancy services for civil construction projects, including residential and commercial complexes, re-development of government colonies, education and medical institutions, infrastructure project roads, water supply systems, storm water systems and water storage solutions. The Real Estate Development segment focuses on residential and commercial projects, such as corporate office buildings and commercial complexes. The EPC Contracting segment covers chimneys, cooling towers, roads, border fencing, water and sewage treatment plants, and solid waste management systems. The Company provides services from concept to commissioning.

Shareholding pattern  :  75% hold by Government of India. mutual Funds hold 0.84%. Financial Institutions hold 8.51%. Foreign investors hold 5.02%. Remaining is held by public.

Financial and Ratios  : 

 2010 - 112011 - 122012 - 132013 - 142014 - 152015 - 162016 - 17
Revenue3,231.463,582.303,040.493,817.064,417.725,519.555,880.31
Net Profit140.34190.17207.50247.14277.30308.80351.10
NPM4.43%5.3%6.82%6,47%6.27%5.59%5.97%
EPS15.5915.8517.2920.5923.115.153.90
Book value7,268.2066.2979.2293.94110.34124.0418.60
Dividend per share3103.503.7555.50101.63
Dividend payout2022.0821.6824.2723.8038.8647.76
ROE21.4523.9021.8221.9220.9420.7420.97
ROCE15.911917.0418.5420.2519.9320.17
ROA4.285.225.565.895.845.595.38
Asset Turnover96.1494.7885.7797.0498.26105.6596.26

Future prospects  :  Housing for all scheme is very important for company. Development of pragati maidan in delhi and Smart city project will be big boost for company.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter