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Informist, Monday, Jun. 9, 2025

 

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--NCC's Sharma: Revenue from Andhra capital projects to reflect from FY27
--CONTEXT: Comments by NCC strategy head Sharma in interview with Informist
--NCC's Sharma: Won INR 100 bln orders from Andhra govt for Amaravati works
--NCC's Sharma: Andhra new capital city Amaravati infra works time-bound
--NCC's Sharma: Expect some more orders from Andhra govt in next few qtrs
--NCC's Sharma: Nearly 60% of new orders in March from Andhra govt
--NCC's Sharma: Standalone order book around INR 641 bln as of Apr 30
--NCC's Sharma: Aim INR 200 bln–INR 220 bln new orders in FY26
--NCC's Sharma: Co lowest bidder for orders worth INR 80 billion end Mar
--NCC's Sharma: Aim 10% YoY revenue growth for FY26
--NCC's Sharma: Expect pace of order execution to pick up in FY26
--NCC's Sharma: Aim to maintain FY26 EBITDA margin at 9.0-9.25%
--NCC's Sharma: Delay in approvals, elections, monsoon hit FY25 earnings
--NCC's Sharma: Facing delays in Jal Jeevan Mission payments; execution hit
--NCC's Sharma: To execute pending INR-43-bln Jal Jeevan Mission works
--NCC's Sharma: Smart meter works may pick up in FY26
--NCC's Sharma: Smart meter works in Bihar may pick up post state elections
--NCC: Induction of partner for smart meters only after pick up in execution
--NCC's Sharma: Coal mine development JV revenues stabilised in FY25
--NCC's Sharma: Coal mining volumes reached its full capacity level
--NCC's Sharma: Don't expect any change in revenues, volumes in FY26
--NCC's Sharma: Standalone debt around INR 7 bln as on Mar 31
--NCC's Sharma: FY26 capex seen around INR 6.0 bln–INR 6.5 bln

 

By Narayana Krishna

 

HYDERABAD – Infrastructure major NCC Ltd expects a chunk of over INR-100-billion orders related to Amaravati development to start converting into revenue from 2026-27 (Apr–Mar) onwards, Neerad Sharma, head (strategy) and spokesperson, told Informist.

 

"We received over INR 100 billion worth of projects from Andhra Pradesh government during March and April. It takes at least 2–3 quarters to complete the formalities and begin actual work. Given the nature of the projects, meaningful revenues (from these orders) may begin in FY27 onwards. However, we have not even started estimates for FY27," Sharma said in an interview.

 

NCC bagged several projects in recent months from the Andhra Pradesh government, mainly from the Amaravati Capital Region Development Authority, to develop basic infrastructure such as roads, sewerage systems, and housing for officials and legislators in Amaravati, the upcoming greenfield capital city. The significant projects include the state High Court building, the Secretariat iconic tower, and housing complexes for senior bureaucrats in Amaravati. Andhra Pradesh has set a deadline of three years to complete all these projects, as several of them are backed by funding from institutions like the Asian Development Bank, the World Bank, and central assistance.

 

Sharma said NCC has a legacy in executing projects in Andhra Pradesh and does not expect any issues this time, as a majority of the works are time-bound and backed by adequate funding.

 

He added that NCC expects a few more orders in the coming quarters from Andhra Pradesh, though it is difficult to quantify their value. Out of the nearly INR 200 billion in new orders the company bagged during March, 60% are from Andhra Pradesh, mainly capital city projects.

 

ORDER BOOK GUIDANCE

NCC expects to add INR 200 billion–INR 220 billion worth of fresh orders during FY26, similar to the last financial year, Sharma said. As of Apr. 30, NCC's standalone order book stood at nearly INR 641 billion, including INR 16.63 billion in fresh orders accumulated in April.

 

Sharma said the company constantly participates in bids for new projects and, as of Mar. 31, has emerged as the lowest bidder for projects worth around INR 80 billion. He noted that for any new order, it takes at least 2–3 quarters to begin on-ground work and subsequently recognise revenue from those projects.

 

FY26 REVENUE AIM

Despite a robust order book and visible revenue potential, NCC plans to project its revenue growth with a "realistic" approach, Sharma said. The company aims for 10% year-on-year growth in FY26 revenues. For FY25, the company's net profit rose 20.5% to INR 7.61 billion, while revenue rose 4.9% to INR 192.05 billion.

 

He expects the execution of various works to pick up in the current fiscal. The company also anticipates its EBITDA margin for FY26 to be in 9.00–9.25% range. Sharma said both revenue and margin guidance are based on the company's strong order book and expected execution in the coming quarters.

KEY CHALLENGES

Outlining the key challenges the sector and NCC faced in FY25, Sharma termed it as an unusual year. He said the Apr–Jun quarter last year was muted due to the Lok Sabha elections, with another 2–3 months lost to assembly elections in some states. Delays in approvals and an extended monsoon also slowed execution. NCC, which had initially projected over 15% year-on-year growth in revenues for FY25, revised this downwards to 5% and achieved it.

 

Sharma said delays in payments under the Jal Jeevan Mission and subsequent execution delays were another reason for the muted performance in FY25. "Payments (for Jal Jeevan Mission) are not coming for the last several month, so most of the projects are in slowdown pace," he said.

 

NCC bagged INR 170 billion worth of Jal Jeevan Mission orders and executed large part of it.  The company has a pending order book worth INR 43 billion under the Jal Jeevan Mission. The outstanding receivables under this project was around INR 15 billion as on Mar. 31.

 

SMART METER

Sharma said NCC's smart meter projects in Maharashtra and Bihar are facing execution delays and are yet to gain momentum. NCC order book includes INR 80 billion worth of smart meter projects in the two states. While Maharashtra order is worth INR 57 billion, Bihar order is INR 23 billion and these works will be executed through a joint venture.

 

While the company has already completed the pilot project and is set to expedite smart meter installations in Maharashtra, the state government asked to slow it down due to elections. Now that a new government is in place, the company has received the go-ahead to implement the project at full scale. NCC expects installations to pick up in Maharashtra in FY26.

 

However, the company is still awaiting the Bihar government's approval to begin full-scale implementation there. Once the Bihar assembly elections conclude, the project may also gain traction. Sharma noted that NCC will induct a partner for the smart meter project only after execution gains momentum.

 

COAL JV

Sharma said revenue from Pachhwara North Coal Block has now stabilised, with production reaching its permitted capacity of 15 millon tonnes per annum. The joint venture with BGR Mining & Infra Pvt. Ltd.--Pachhwara Coal Mining Pvt. Ltd.--reported revenue of INR 26.72 billion for FY25, with NCC holding a 51% stake.

 

In December 2018, the company secured a 30-year mine development operator contract for the Pachhwara North coal block in Jharkhand from its client, West Bengal Power Development Corp. Ltd. He said that since coal production has reached its permitted level, revenue from this venture may remain stable until production capacity increases. Although West Bengal Power Development Corporation has applied for capacity expansion, it may take some time to receive clearances.

 

DEBT–CAPEX

As of Mar. 31, NCC reported a standalone debt at INR 7 billion, mostly working capital related. While the company aims to gradually retire debt, Sharma said it may take on debt for some projects. For the March quarter, NCC reported its finance cost at INR 1.74 billion, up nearly 13% year on year. For the full year FY25, finance cost up by 9.7% on year to INR 6.5 billion.

 

The company expects its capital expenditure for FY26 to be around INR 6.0–6.5 billion. It also plans to purchase a TBM drilling machine for its Mumbai tunnel projects this fiscal, which may cost around INR 3 billion. At 1337 IST, shares of NCC Ltd were trading at INR 240.81 on the National Stock Exchange, up 1.2% from its previous close.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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