Stock Performance and Market Context
NCC’s stock price touched Rs.156.65, marking its lowest level in the past 52 weeks. This price point is notably below its 52-week high of Rs.315.25, indicating a near 50% reduction in value over the last year. The stock is currently trading beneath its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling sustained downward momentum.
In contrast, the broader market has shown resilience. The Sensex opened higher at 84,856.26 points, gaining 176.40 points (0.21%) at the start of the trading session and was trading at 84,757.72 points, down marginally by 0.09% at the time of reporting. The Sensex remains close to its 52-week high of 86,159.02, just 1.65% away, supported by bullish moving averages where the 50-day moving average is positioned above the 200-day moving average. Mid-cap stocks are leading the market with the BSE Mid Cap index gaining 0.14% today.
Financial Results and Recent Trends
NCC’s recent quarterly results reveal a contraction in key financial metrics compared to the previous four-quarter averages. Profit before tax (PBT) stood at Rs.166.57 crore, reflecting a decline of 33.5%. Net profit after tax (PAT) was Rs.154.70 crore, down by 22.9%, while net sales amounted to Rs.4,543.01 crore, showing a reduction of 16.8%. These figures highlight a period of subdued financial performance relative to prior quarters.
Over the past year, the stock has underperformed significantly, with a total return of -49.38%, whereas the BSE500 index has recorded a modest gain of 1.98%. This divergence underscores the challenges faced by NCC in maintaining market value amid broader market stability.
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Operational and Financial Metrics
Despite the recent price decline, NCC exhibits several positive financial indicators. The company’s return on capital employed (ROCE) stands at 16.94%, reflecting efficient utilisation of capital resources. Additionally, the debt to EBITDA ratio is 0.97 times, indicating a manageable level of debt relative to earnings before interest, tax, depreciation, and amortisation.
Long-term growth trends show net sales expanding at an annual rate of 22.70%, while operating profit has grown at 17.73% annually. The enterprise value to capital employed ratio is 1.2, suggesting that the stock is trading at a valuation comparable to its historical peer averages.
However, profits over the past year have declined by 7.1%, which aligns with the downward pressure on the stock price. Institutional investors hold 29.52% of the company’s shares, indicating a significant stake by entities with substantial analytical resources.
Sector and Market Comparison
Within the construction sector, NCC’s performance contrasts with the broader market indices and mid-cap segments, which have shown relative strength. The Sensex’s proximity to its 52-week high and the positive momentum in mid-cap stocks highlight a market environment where NCC’s stock has not kept pace.
The stock’s current trading below all major moving averages further emphasises the gap between NCC’s price action and the overall market trend. This divergence may reflect sector-specific pressures or company-specific factors influencing investor sentiment.
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Summary of Current Position
NCC’s stock has reached a significant low point in its 52-week trading range, closing at Rs.156.65. This level reflects a substantial decline from its peak price of Rs.315.25 within the last year. The company’s recent quarterly financials show reductions in profit and sales compared to previous quarters, contributing to the stock’s subdued performance.
While the broader market and sector indices have demonstrated resilience and modest gains, NCC’s stock remains under pressure, trading below all key moving averages. The company’s financial ratios indicate operational efficiency and manageable debt levels, but recent profit declines have coincided with the stock’s downward trajectory.
Institutional ownership remains notable, with nearly 30% of shares held by such investors, reflecting continued interest from entities with significant analytical capabilities. The stock’s valuation metrics suggest it is trading in line with historical peer valuations despite the recent price weakness.
Overall, NCC’s current market position highlights a divergence from broader market trends, with the stock experiencing a pronounced decline to its lowest level in a year amid a generally stable market environment.
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