NBCC: On A New High

Recently awarded with Schedule A Navaratna status; Public Sector Enterprise, National Buildings Construction Company (NBCC) has been soaring high. It is engaged into business of construction which can be classified into three segments, project management consultancy, secondly real estate development and EPC contracting. One of its core competencies is in that of project consultancy management.

Company’s real estate business can be classified into two categories. Firstly, source of origin wherein the company buys the land from the government; develops it and sells it off. Secondly, redeveloping government colonies after purchasing the land from government on a self sustaining model. It is also designated as the implementing agency under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and various other government schemes. It has been awarded numerous awards such as Excellence Award 2014: Certificate of Excellence and Gold medal by Indian Economic Society for having contributed towards the nation immensely, Indian Green Building Council Awards 2013.
 
NBCC’s order book stands at around Rs 19600 crore which is a very strong order book. Recently, it has also signed Memorandum of Understanding (MoU) with Construction Industry Development Board Malaysia to share technical expertise and operations & maintenance of projects, management & financing and joint execution of the projects. Furthermore, in India it has National Waqf Development Corporation (NAWADCO) for development of Waqf properties all over India as an instructional and a commercial project. The company has recently signed a JV with Al Naba Services, an Oman company which operates in gulf countries to explore business opportunities as the company foresees gulf countries as a prospective market. Besides gulf areas, it also operates in to countries such as Botswana, Malaysia and Turkey.
 
One of the biggest growth drivers for the company is government’s initiative to improvise infrastructure facilities in which NBCC is expected to play an important role as it is not only involved in contracting but also offers project management consultancy services.
 
The net sales of the company stood at Rs 834.48 crore in June’2014 quarter as compared to Rs 713.78 crore in June’2013 quarter. The net profit of the company stood at Rs 32.46 crore in June’2014 quarter as compared to Rs 25.33 crore in June’2013 quarter. It is currently trading at a price to earnings of 32.79x in January’2014 quarter as compared to 23.65x in March’2014 quarter which gives it a slightly higher valuation.
 
The shares of the company are currently trading at Rs 695.40 per share, up 14.83%. The investors can look out for the company in the near future as it is backed by strong fundamentals.