The brokerage attributed the weak Q1 results to the onset of early monsoon in Mumbai and slow pickup in UP water projects. CLSA maintained its “outperform” rating on NCC, with a price target of ₹315, which implies an upside potential of 46.5% from Wednesday’s closing price.
Moreover, the construction company’s backlog growth was 33% YoY during the June quarter, and the company maintained its FY26 guidance, pointing to a pickup in execution and margins in the second half of the ongoing fiscal, according to CLSA.
The company also remains the most liquid of the water theme plays, as 17% of its FY25 order backlog came from this segment, the brokerage added.Separately, brokerage firm JM Financial also maintained its ‘buy’ recommendation for the stock but lowered its target price to ₹275 from ₹285 earlier after the Q1 results. Even with the lowered target price, the brokerage sees 28% upside for the shares of NCC.
NCC has survived adverse business cycles and is showing marked improvement in operations and net working capital management, the brokerage said. Also, faster recovery of AP receivables and part receipt of Vizag deal proceeds will strengthen the balance sheet, it added.
During the quarter, the company secured new orders aggregating to ₹3,658 crore, including changes in scope. As of June 30, 2025, NCC’s consolidated orderbook stood at ₹70,087 crore.
Shares of NCC are trading marginally lower at ₹213.8, down 0.5% on BSE. The stock has declined by over 23% this year so far.
