Valuation & outlook: The company targets revenue growth of 25-30% yoy growth in standalone basis with standalone EBITDA margins expected at 5-5.5% in FY20E. We have marginally revised our earnings estimates upwards for FY20E and FY21E. We maintain our Reduce rating on the stock with revised target price of Rs 61 (Vs Rs 60 earlier), valuing the stock at 19x FY21E EPS. We have factored in the near term risk related to project clearance, any risk on balance sheet due to shift towards asset heavy model, etc.
Outlook & Valuation: We continue to view NBCC as a robust growth story owing to its PWO status and niche presence in redevelopment of government’s old colonies. Further, a debt-free balance-sheet and superior return ratios augur well for the Company. Therefore, we continue to believe that NBCC should trade at premium to its peers. At CMP, the stock trades at 24.8x of FY20 and 19.9x of FY21 EPS, which appears to be reasonable. We do not envisage any re-rating of the stock due to slower redevelopment projects, ambiguity over Jaypee Infra deal and possibility of government pressure to acquire more sick companies in future. We maintain our HOLD recommendation on the stock with a revised SOTP-based Target Price of Rs64 (20x of EPS FY21E).
Valuation & outlook: The company targets over 30% yoy growth in the longer run. We have maintained our earnings estimates for FY19E and FY20E and introduce estimates for FY21E. We downgrade our rating on the stock to Reduce (Vs Add earlier) with revised target price of Rs 60 (Vs Rs 53 earlier) valuing the stock at 19x FY21E EPS. We have factored in the near term risk related to project clearance and any possible diversification towards asset heavy model and change in management.