Current Rating Overview
MarketsMOJO’s current rating of 'Sell' for NCC Ltd reflects a comprehensive assessment of the company’s quality, valuation, financial trend, and technical indicators. The rating was revised on 06 Nov 2025, when the Mojo Score dropped from 50 to 36, signalling a shift from a 'Hold' to a 'Sell' stance. This score of 36 places NCC Ltd in the below-average category, indicating caution for investors considering exposure to this stock.
Quality Assessment
As of 23 February 2026, NCC Ltd’s quality grade remains below average. This is largely driven by recent operational challenges and profitability pressures. The company reported a significant decline in profitability in the December 2025 quarter, with Profit Before Tax (excluding other income) falling by 22.6% to ₹183.12 crores compared to the previous four-quarter average. Similarly, Profit After Tax dropped by 25.7% to ₹147.53 crores in the same period. These figures highlight ongoing difficulties in maintaining earnings momentum, which weigh heavily on the quality assessment.
Valuation Perspective
Currently, NCC Ltd’s valuation grade is considered fair. Despite the recent earnings decline, the stock’s market price has adjusted to reflect these challenges, offering a valuation that is not excessively stretched. Investors should note that while the valuation is not overly expensive, it does not present a compelling bargain either, given the company’s financial and operational headwinds. This fair valuation suggests that the market is pricing in the risks associated with the company’s recent performance.
Financial Trend Analysis
The financial trend for NCC Ltd is negative as of today. The company’s Return on Capital Employed (ROCE) for the half-year ended December 2025 stands at a low 17.29%, marking the lowest level in recent periods. This decline in capital efficiency signals deteriorating profitability and operational effectiveness. Furthermore, the stock has underperformed the broader market significantly over the past year. While the BSE500 index has delivered returns of 11.96% in the last 12 months, NCC Ltd’s stock price has declined by 22.75% over the same period, reflecting investor concerns about the company’s growth prospects and financial health.
Technical Outlook
The technical grade for NCC Ltd is mildly bearish as of 23 February 2026. The stock has experienced a downward trend over the medium term, with a 3-month return of -16.86% and a 6-month return of -32.56%. The one-day and one-week price changes also indicate selling pressure, with declines of 1.23% and 1.94% respectively. Although the stock showed a modest recovery in the past month with a 4.53% gain, the overall technical signals remain cautious, suggesting limited near-term upside momentum.
Implications for Investors
For investors, the 'Sell' rating on NCC Ltd implies a recommendation to reduce or avoid exposure to the stock at this time. The combination of below-average quality, fair but uninspiring valuation, negative financial trends, and bearish technical indicators suggests that the stock faces considerable headwinds. Investors should carefully weigh these factors against their risk tolerance and portfolio objectives before considering any position in NCC Ltd.
Market Context and Sector Considerations
Operating within the construction sector, NCC Ltd faces sector-specific challenges including project execution risks, fluctuating raw material costs, and competitive pressures. The company’s small-cap status further adds to the volatility and risk profile. Given the current market environment and the company’s recent performance, the 'Sell' rating reflects a prudent stance aligned with the broader sector dynamics and company-specific fundamentals.
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Stock Performance Summary
As of 23 February 2026, NCC Ltd’s stock returns illustrate a challenging period for investors. The stock has declined by 22.75% over the past year, significantly underperforming the broader market benchmark, the BSE500, which has gained 11.96% in the same timeframe. Shorter-term returns also reflect volatility and weakness, with a 6-month loss of 32.56% and a 3-month loss of 16.86%. Year-to-date, the stock is down 7.14%, indicating continued pressure in early 2026.
Financial Results and Profitability
The latest quarterly results reinforce the cautious outlook. The December 2025 quarter saw a marked decline in profitability, with PBT (excluding other income) at ₹183.12 crores, down 22.6% compared to the previous four-quarter average. PAT also fell sharply by 25.7% to ₹147.53 crores. These declines highlight operational challenges and margin pressures that have impacted the company’s earnings quality and investor sentiment.
Capital Efficiency and Returns
Return on Capital Employed (ROCE) is a key metric for assessing how effectively a company utilises its capital to generate profits. NCC Ltd’s ROCE for the half-year ended December 2025 is 17.29%, the lowest in recent periods, signalling weakening capital efficiency. This deterioration is a concern for investors seeking sustainable returns and reflects the company’s current struggles to maintain profitability amid sector headwinds.
Conclusion: What the Sell Rating Means
The 'Sell' rating assigned to NCC Ltd by MarketsMOJO is a clear indication that the stock currently carries elevated risks relative to its potential rewards. Investors should interpret this rating as a cautionary signal to either exit existing positions or avoid initiating new ones until there is evidence of a turnaround in the company’s fundamentals and technical outlook. The rating encapsulates a holistic view of the company’s quality, valuation, financial health, and market momentum, all of which currently point towards a challenging investment environment for NCC Ltd.
Looking Ahead
Investors monitoring NCC Ltd should watch for improvements in quarterly earnings, stabilisation of profitability metrics, and positive shifts in technical indicators before reconsidering the stock’s outlook. Additionally, sector developments and broader economic conditions will play a crucial role in shaping the company’s future performance. Until such signs emerge, the 'Sell' rating remains a prudent guide for portfolio management.
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