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NCC held a conference call on Feb 10, 2017. In the conference call the company was represented by Y D Murthy, Executive Vice President of the company.
Key takeaways of the call
Order book as end of Dec 2016 stood at Rs 20466 crore including a large mining order of Rs 3050 crore booked by the mining subsidiary. Order intake in 9mFY17 including the order book of mining subsidiary was Rs 9312 crore. The company is well on course to its annual order booking target of Rs 12500 crore.
| NCC Order & execution Mix |
| Particulars |
Order backlog as end of Dec 31, 2016 |
% of total |
Order Intake (for Q3FY17) |
% of total |
Order Book Burnout (in 9mFY17) |
% of total |
| Building |
8063 |
39 |
3102 |
33 |
2536 |
39 |
| Roads |
460 |
2 |
216 |
2 |
751 |
12 |
| Water & Environment, Railways |
3650 |
18 |
627 |
7 |
1620 |
25 |
| Railways |
172 |
1 |
0 |
0 |
65 |
1 |
| Electricals |
1504 |
7 |
935 |
10 |
344 |
5 |
| Irrigation |
2079 |
10 |
1382 |
15 |
184 |
3 |
| Metals |
|
0 |
0 |
0 |
33 |
1 |
| Power |
|
0 |
0 |
0 |
202 |
3 |
| Mining |
3050 |
15 |
3050 |
33 |
0 |
0 |
| International |
1488 |
7 |
0 |
0 |
766 |
12 |
| Others |
|
0 |
0 |
0 |
|
0 |
| Total |
20466 |
100 |
9312 |
100 |
6501 |
100 |
| Figures are in Rs crore |
After a muted order booking in Q3FY17, the company emerged L1 for orders worth Rs 3000 crore in January 2017 and this momentum pickup is order finalization is likely to continue for rest of the fiscal boosting the order booking of the company. Given this fact, the standalone order book itself is expected to move from current Rs 16000 crore to Rs 19000 crore by end of this fiscal.
The company expects the slowdown in economy as well as execution to continue in Q4FY17. So the company sees its STO for FY17 to be flat. The company expects to conclude the fiscal with an EBITDA margin of 8.8%. This is based on the execution schedule of the order on hand. The company expects 10-12% growth in STO for next 3 years starting from FY18.
The mining order is booked by the Subsidiary SPV. The company has 51% stake in the SPV with JV partner BGR infra holds 49% stake.
Sale in Q3FY17 declined by 7.5-8% and the dip in STO is largely on account of slowdown in execution due to demonetization and slowdown in economy which will gradually improve.
Retention money as end of Dec 2016 was Rs 1625 crore. The mobilization advance was Rs 513 crore. The cash balance as end of Dec 2016 stood at 85.9 crore.
Finance cost in Q3Fy17 and 9mFY16 come down by Rs 20 crore and Rs 85 crore. Interest cost come down to 5.2% as % of STO.
Real Estate exposure currently stands at Rs 1200 crore. NCC Urban have a business plan of repaying of about Rs 100 crore to parent company. Last year they paid Rs 71 crore. Since due to slowdown in economy the monetization is delayed and the money will come in by end of March 2017 or Q1FY18. Infact the land parcel of Vizag has appreciated after bifurcation of the state. The Dubai land parcel the company proposes to give it to other developers for development.
Bangalore Elevated Expressway monetization- The Company so far got Rs 82 crore including Rs 5 crore received in last week. Another Rs 28 crore is yet to be received, which is expected to be received in 2-3 months.
Electrical order payments are not coming and the delay in case from REC for rural electrification project is due to UP Elections. So the projects were put on hold.
Year start order accretion target of Rs 12500 factored in Rs 1000 crore of Mining order but the company managed a big order so far in the quarter. Given 9mFY17 order intake and L1 order book, the company will surely exceed the order intake target for current fiscal.
Mining Order - In the first year the company targets a 4 million tonne of coal extraction for the client fetching a STO of Rs 360 crore in first year for the SPV. Then the output will be gradually improved to 15 million tonne a year over first 5 year period. Then the output will be remain at 15 million tonne.
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