Recommendation From Construction & Contracting- Civil & Infrastructure-General Sectors
The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.
NCC LIMITED
CMP - Rs.83.55
BSE CODE 500294
Volume 939,371
Face Value Rs.2
Target Rs.105
Stoploss Rs.78
NCC Limited is engaged in civil construction across segments like water, buildings, roads, irrigation, etc. In FY18, NCC secured orders worth Rs 25,304 crore in a single year, and completed 40 years of operations. Its cumulative order book rose 80 per cent YoY to Rs.32,532 crore in the fiscal year 2018, thereby ensuring revenue visibility.
Its turnover stood at Rs.76751.56 million and the net profit rose to Rs.286.804 crore in FY18. The net sales of the company rose 138 per cent on a YoY basis and stood at Rs.3104.81 in Q2FY19. The PBIDT too doub;led itself on a YoY basis and came in at Rs.365.09 crore.The EPS climbed to Rs.4.77 in Q2FY19 from Rs.2.01in the corresponding quarter of the FY18.In a bold move, the company ceased unfeasible overseas operations to strengthen its balance sheet. Its strategy for FY19 and beyond is to strengthen its position in India by excellence in execution. We recommend you BUY this stock.
BEML LIMITED
CMP - Rs.755.40
BSE CODE 500048
Volume 334,464
Face Value Rs.10
Target Rs.870
Stoploss Rs.620
BEML manufactures rail coaches, spare parts & mining equipment. During FY17-18, BEML produced an all-time high revenue of Rs.3246 crore, which rose 30 per cent YoY. Its rail & metro division accomplished record production/sales of 244 metro cars, posting a growth of 114 per cent YoY. The mining & construction segment exhibited a growth of 11 per cent YoY, while the defence business showcased a growth of 10 per cent YoY. BEML’s profit before tax surged 67 per cent YoY to Rs.164 crore, marking the highest ever numbers in the last seven years. The EPS rose to Rs.31.08 – the highest number reached in the last eight years. All the business activities of the company are 100 per cent digitised. With a view to expanding its business, the company is slowly foraying into the high-end mining equipment, continuous miner and mine cruiser and designing and development of rope shovels. BEML has an impressive order book of over Rs.6700 crore. The company allocated capex of Rs.70 crore toward capacity expansion and upgradation and has planned an outlay of Rs.148 crore. We recommend you BUY this stock.