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Guidance initiated, margin to improve in FY27

NCC reported a better-than-expected Q1FY27 performance, with revenue growing 12% YoY, 5% ahead of both our and consensus estimates, while EBITDA margin remained stable YoY at 9%. Importantly, management has initiated FY27 guidance, targeting revenue growth of 8 to 10% (vs. a 9% decline in FY26), EBITDA margin improvement to 8.5–9.0% (vs. 8.3% achieved in FY26), and order inflows of INR 220– 250bn. The return to revenue growth guidance should help reinforce confidence in the quality and execution potential of NCC’s robust INR 713bn order book (~4x TTM revenue). Balance-sheet metrics also continued to improve, with receivable days declining to 68 and collections from JJM projects normalising, supporting management’s expectation of broadly stable debt by FY27-end. NCC secured INR 45.4bn of new orders through July-26, while reiterating that its reported order backlog comprises only executable projects (no slow moving). We retain BUY with an unchanged TP of INR 195, based on 15x FY28E EPS.

Strong Execution:

NCC reported standalone revenue of INR 49.1 bn, up 12% YoY was 5% above our/ consensus estimates, revenue was strong due to improved execution among each segment. EBITDA came in at INR 4.4bn, up 12% YoY with EBITDA margins stable at 9%. PAT stood at INR 1.9 bn down 2% YoY was slightly impacted due to higher depreciation and finance cost; tax rate was at 26% vs 21% YoY which depleted the PAT further. Company reported order inflows worth INR 39 bn during the quarter, the order book (standalone) stands at INR 713bn which provides visibility of 4 years TTM revenue.

Guidance:

Management reiterated its FY27 guidance of INR220–250bn order inflows, 8–10% revenue growth and an EBITDA margin of 8.5–9.0%, despite delivering a strong Q1FY27 performance, reflecting its cautious stance amid uncertainty surrounding government fund releases, project approvals and right-of-way (RoW) clearances. The company also maintained its FY27 capex guidance of INR5bn, with INR1.7bn already deployed during Q1FY27, primarily towards equipment procurement. On the balance sheet, management expects standalone debt (INR24.1bn as of Q1FY27) to remain broadly stable or decline modestly by FY27-end, supported by improving collections, particularly from JJM projects. However, it noted that the medium-term debt trajectory will depend on the mix of EPC and asset-backed projects (PPP/BOT/HAM) secured going forward.

Order book Strong:

NCC reported a consolidated order book of INR812 bn as of Q1FY27, providing a healthy book-to-bill ratio of ~3.5x, ensuring strong multi-year revenue visibility. The order book remains well diversified across segments, led by Buildings (28%), followed by Transportation (20%), Mining (16%), Electrical T&D (16%), Water & Railways (14%), and Irrigation (6%), limiting concentration risk. During Q1FY27, the company secured fresh orders worth INR38.9 bn, taking cumulative order inflows to INR45.4 bn including July awards. Standalone order book stood at INR 713 bn ( ~4x TTM Revenue).

JJM witnessing meaningful recovery:

Management indicated that execution across Jal Jeevan Mission (JJM) projects has materially improved, supported by a normalization in payment cycles after prolonged delays. During Q1FY27, the company collected INR6.1bn from JJM projects, including INR1.1bn from Uttar Pradesh projects, while an additional INR4.3bn was received in July, reflecting sustained improvement in cash flows. Management expects the current payment momentum to continue, enabling substantial completion of the remaining JJM order book (INR58.8bn) and receivable of INR28bn. The normalization in collections is expected to improve working capital, support debt reduction and remove a key execution overhang that had impacted the water segment over the past few years.

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