Share of Nagarjuna Construction Company (NCC), a part of ‘Big Bull’ Rakesh Jhunjhunwala’s portfolio, has delivered 190 per cent return to its shareholders in the last 12 months. The share stood at Rs 32.05 on July 6, 2020. It has zoomed to Rs 92.85 today, translating into gains of 190 per cent during the period. In comparison, Sensex rose 45 per cent in one year.
Rs 5 lakh invested in the Hyderabad-based construction and infra company a year ago would have turned into Rs 14.48 lakh today. The midcap infra stock has gained 59 per cent on a year-to-date basis.
It ended 1.27 per cent higher at Rs 91.85 against the previous close of Rs 90.70 on BSE today. With a market capitalisation of over Rs 5,500 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
“In March 2020, the stock slipped to an almost 6-year low of Rs 15.85 and reversed subsequently after taking support of its long-term reversal zone, which was placed in between Rs 25 and Rs 10. Since then the stock has witnessed sharp recovery,” Jatin Gohil, Technical Research Analyst at Reliance Securities told Business Today.
“In February 2021, the stock rose to Rs 99.85 surpassing its medium-term falling trendline. After 530 per cent rise reported in less than a year (i.e. from Rs 15.85 to Rs 99.85), the stock erased partial gain subsequently. Despite profit booking, the stock stayed form above its 38.2% Fibonacci level of prior up-move and also, extended falling trendline,” he noted
“In May 2021, the stock resumed its northward journey and thereafter extended gain. The key technical indicators on the long-term as well as medium-term timeframe chart are positively poised. The stock has the potential to move towards Rs 130 initially and Rs 150 subsequently. In case of decline, we believe its 38.2% Fibonacci level of prior up-move-placed at around Rs68-will continue to work as a strong support point,” he added.
However, he also said that mid-cap and small-cap space is well known for their high volatile nature, hence investors should remain alert to avoid any adverse movement.
Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala together hold 12.84 per cent shares of the company. While Rakesh Jhunjhunwala holds 6,67,33,266 NCC shares (10.94 per cent), his wife holds 1,16,00,000 shares (1.90 per cent) in the company.
Recently, the company received five new orders amounting to Rs 2,149 crore in June. Out of the total orders, two orders valuing Rs 1,254 crore pertain to water & environment division and one order valuing Rs 729 crore pertains to buildings division, and one order valuing Rs 166 crore pertains to the mining division. These orders were received from PSU/Central/State Government agencies and do not include any internal orders.
The company posted a net profit of Rs 118.45 crore for the quarter ended March 2021 as against a net profit of Rs. 75.82 crore in March 2020. Net sales stood at Rs 2,816.60 crore compared to Rs. 2,334.41 crore in March 2020.
Broking house Geojit maintained a ‘Buy’ rating due to strong order book, increased Govt’s infra spending. “We value the stock at a P/E of 14x on FY23E EPS with a target price of Rs 100,” it said.
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