Emkay Global Financial Services has downgraded NCC to 'Hold' with target price of Rs 89 in its report.
Commenting on the investment rationale, the stock broker said, ''Revenue came in at Rs 22.1 billion +15.5% YoY, higher than our expectation of Rs 19.4 billion led by better than expected execution run rate followed in the power segment.
EBITDA came in at Rs 1.85 billion +76.5% YoY, higher than our expectation of Rs 1.56 billion led by higher revenue flow and improvement in EBITDA Margins due to forex translation gains on the power project execution, EBITDA Margin came at 8.4% +289 bps YoY, higher than our expectation of 8%
Increased our E&C multiple to 14x (Previous 12x) on improved operational profitability and continued focus on de-leveraging however given the current valuations factors the improvement in the operational performance, we do not see any near term catalyst for the stock and continuous delivery in terms of growth and margin expansion will be key for re-rating Downgrade to Hold.''
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