NBCC (India) Limited (NBCC.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to NBCC's Q1 FY 2025-'26 Investors Earnings Conference Call hosted by ICICI Securities. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you, and over to you, sir.

Good morning. On behalf of ICICI Securities, we welcome you all to the Q1 FY '26 Earnings Call of NBCC Limited. Today, we have with us the management, Shri K.P. Mahadevaswamy, Chairman cum Managing Director; Shri Saleem Ahmad, Director Projects; Dr. Suman Kumar, Director Commercial; Shri Anjeev Kumar Jain, Director of Finance; Shri M. B. Singhal, Executive Director, Finance; and Shri Balkishan Singla, Investor Relations. We'll start with a brief opening remarks followed by Q&A. Thanks, and over to you, sir.

Good morning, everyone. A warm welcome to all of you in today's earnings call for first quarter ended on 30th June 2025. For quarter 1 stand-alone operations and execution, we have achieved a total operating income of INR 1,655 crores and INR 2,391 crores on consolidated, reflecting an increase of 12% year-on-year on consolidated basis. And our stand-alone PAT stands at INR 114 crores marking a significant 32% year-on-year growth. Additionally, our consolidated PAT stands to INR 135 crores, making 26% year-on-year growth. Order book. NBCC standalone order book is standing INR 1,05,000 crores and consolidated order book INR 1,20,000 crores. Business secured. NBCC has secured INR 2,400 crores on consolidated basis in quarter 1, following major projects secured in quarter 1 by NBCC. Permanent Campus of JNV in various districts INR 518 crores; Redevelopment Projects of MDA, Meerut INR 297 crores; UCO Bank Head Office New Town Kolkata INR 172 crores; Central University of Haryana, Mahendergarh INR 167 crores; interior works at World Trade Center, New Delhi INR 162 crores; Township Project by NEEPCO, Shillong, Meghalaya INR 131 crores; and our [indiscernible] got 2 new government medical college and hospital at [indiscernible] Maharashtra. Other MoU signings. MoU signing with [indiscernible] data center projects in India and overseas for a period of 5 years. MoU is National Skill Development Corporation that is NSDC for redevelopment of iconic Siri Fort Auditorium complex in New Delhi. MoU signed between NBCC and Department of Posts to redevelop prime government land parcel across India into self-sustainable commercial and residential. Business awarded to the contractor. In quarter 1, we have awarded INR 1,700 crores of new tenders on consolidated level. Redevelopment projects. In quarter 1 financial 2026 in GPRA Netaji Nagar projects, the first step of the project value INR 1,450 crores, with around 85% completed. And 2 more projects in Netaji Nagar valuing INR 2,000 crores have started giving contributions, which are awarded in quarter 4 financial year '24-'25. And INR 1,900 crores more in pipeline to award in Netaji Nagar. Sarojini Nagar. This is the large project and work has been going in 9 packages, and now 3 more projects have started in contribution. So total tally of the running project leads to INR 8,000 crores. Amrapali project. For the Amrapali project Phase I, NBCC made significant progress. We have successfully completed 19 projects out of 24 projects [indiscernible] taken over with 4 more projects slated to the completion in the next quarter and 1 remaining project expected to be finished by March next year. In terms of units, we have completed 28, 000 units, an addition of 7,000 units will be completed in next quarter. And the remaining 2,000 units by March 2026. In last quarter, we have shared that we have awarded Phase 2 of Amrapali projects valuing of around INR 9,000 crores in different packages, but now these projects have started giving contribution and upcoming quarters, they will have a significant contribution in top line and bottom line. In quarter 1, it has contributed around INR 300 crores in top line. In this phase, we have 7 projects for bulk sale, comprising 8,200 units. Out of these 5 projects with 4,600 units have already been sold. The remaining 2 projects will be sold in the next quarter. It is expected to provide strong funding proper project execution. Thank you. Now the forum is open for the question-answer session.

[Operator Instructions] The first question is from the line of Abhinav from ICICI Securities.

My first question is what is the target for awarding tenders in FY '26?

Around INR 15,000 crores.

Okay. My second question is the EPC revenue fell by about 16% year-on-year. This is due to the Maldives project nearing completion. Are there any replacement projects lined up? And similarly, real estate also saw some sharp fall in revenues and profit. If you can throw some light on the segments as well as overall FY '26 revenue target?

EPC contracts we are trying. Yes, definitely, we're going to get some more EPC projects which are in pipeline. Regarding real estate, we are going to start our 37D tender in process, so that will go into within a week time. And we are trying for our Jaipur, we have 3 land parcel, one tender already we are awarded and approval is in process. So the rest of the 2 land parcels in Jaipur that we're going to start. And of course, we are planning [indiscernible] land, so that is also going to take place. Regarding sale of real estate, Bhubaneswar, I think during this year, we're going to get -- the complete inventory will be going to sold in Bhubaneswar as well as [indiscernible].

Understood. Sir, my last question is on EBITDA margins. The margins improved 100 bps year-on-year on a stand-alone basis. How much of this is sustainable? I mean, is the company targeting 6%-plus margins for FY '26?

EBITDA will be more than 6% to 6.5%. We are targeting 6% to 6.5%.

The next question is from the line of Anjali Bajaj from Naredi Investment.

My question is regarding to with the consolidated order book of the INR 1,20,300 crores, what is the expected revenue recognization time line for the significant portion of this order book? And are there any specific large projects within this order book that are anticipated to contribute substantially to revenue in coming years? Will this include the completion of flagship projects like Amrapali Phase 2 Supertech? Or are there any challenges you may face?

The top line in current year, we are expecting around INR 14,000 crore to INR 15,000 crores. And Phase 1 is going to complete by March. Phase 2, of course, 7 packages we have started and the work is in full steam. And the sale part also we have completed with our 4 projects with 2 projects in pipeline. So once the sale is over then the major challenges in Amrapali is generating funds. These projects are self-sustainable projects. The government budget funding is not coming. So that's why the time line is a little bit more considering 3 to 4 years. So otherwise, for [indiscernible] projects, we will complete by within 2 years.

Okay. Okay, sir. And my second question is regarding the real estate segment, I see a significant decline in both revenue and profits, could you provide more details on specific real estate project that impacted this decline? And what are the company's to revive the growth and profitability in the real estate segment for the remaining of the financial year '26?

Real estate, we have 2 inventories. Currently, we are in 2 projects, we have inventory. One is in Lucknow, other one is Bhubaneswar. So Bhubaneswar, hopefully during this quarter or next quarter we're going to finalize. The sale will be completed in the Bhubaneswar. And of course, Lucknow is the major clients and negotiation going on with the major clients. Around INR 325 crores to INR 350 crores trending value we are expecting during this year in the real estate.

The next question is from the line of Venkatesh Subramanian from LogicTree Consultants Private Limited.

My question is for the next 3 years. I think in your earlier calls, you had said that FY '26, we would obviously do about INR 14,000-odd crores. Can you give us an idea for FY '27 and FY '28, what the revenue trajectory looks like considering that we have INR 1,20,000 crores order book. And I think you also indicated that our order book at some point of time should go towards INR 2 lakh crores. Can you just give us some update on it, sir?

So this year, INR 14,000 crore to INR 15,000 crores. Next year, there will be INR 18,000 to INR 19,000 crores. And '27-'28 around INR 25,000 crores. And the other book we are expecting currently the discussion is going on with various state governments for the redevelopment, along with some major PLCs, they have huge land parcels. So the discussion is going on. Once it is finalized, we'll definitely let you know. Recently, we got redevelopment projects with Indian Postal Department. They have huge land parcel across India. They have signed a MoU that value [indiscernible] time. So once the [indiscernible] prepared, so we came to know that. So during this year minimum business we are expecting around INR 20,000, INR 25,000 crores, but it will be more than that because the various state government where discussion is in final stage. One is Rajasthan state government, other one is Chhattisgarh, Jharkhand. So we are talking with them because they have new land parcel [indiscernible] townships. So they don't have money to reconstruct, so [indiscernible] anybody any builder comes, they are expecting some profit margins. In this case, we are taking our PLC and whatever profit is there that we will pass on to client just like World Trade Center, we have generated more than INR 14,000 crores in just 25-acre land. So similar model we can -- this model can transfer to various state governments and even for PSUs also, lot of PSUs are incurring huge loss or they're paying interest, but they are huge land potential, so that we're going to redevelop. This is our main target also.

Okay. So is it fair to assume that over the remaining part of the year, we will start sharing more MoUs, more order flows starting to getting executed basically in terms of getting the orders?

Yes, definitely. I think, next 2, 3 years, our order book will be more than INR 2 lakhs.

Then the other question is, if you are assuming something like INR 18,000 crore to INR 25,000 crore top line, I understand that based on PMC and other things, EBITDA margin works out to 6%, but you have also indicated that we will -- at some point, in the next 2 years, you will do a sale of real estate property or a land or something, which will give additional income. So broadly, we were factoring in about INR 1,800 crores to INR 2,000 crores of profits because 6% from PMC and the real estate, something that you mentioned. Can you give us an update on that, sir?

Definitely. In the year, '27-28, the bottom line will be around INR 2,000 crores. So top line is INR 25,000 crores around, our PAT will be somewhere 7% to 8%. It may cross also because our overheads are fixed -- our overheads are our salaries. Once it is breaking that INR 5,000 crores, INR 5,500 crores more than that whatever we are doing, it will come to our bottom line.

Okay. Okay. Any update on the Delhi colony's redevelopment, sir, you were talking to the Delhi Government?

Yes, yes. It's already discussed and it is going on. So I don't want to discuss presently. So we have a discussion with NCD. NCD is having huge land parcels. Even Delhi Development Authority also [indiscernible] project, the Phase 2 is going to get -- already MoU is there, so it's going to effect Phase 2 also. They have some old colony, it is in repaired condition, that also they wanted to do in redevelopment. So discussion is going on. At any moment, we can get this order. We're going to receive this order shortly.

The next question is from the line of Divyam Doshi from Pragya Securities.

Sir, my question was we have a massive order book. So when are we expecting to roughly finish the entire order book?

Four to 5 years, we can say. In redevelopment, we need at least 4 to 5 years because in redevelopment, lot many issues are there. One is approval. The other one is vacation of the quarters. So redevelopment model, we'll need 4 to 5 years. Whereas in PMC project, we're completing in less than 2 years also.

Okay. And sir, my second question was, can you give us a geographical distribution of where the major projects in the company are?

Presently, the major orders are in Delhi and NCR only. Amrapali, we have around INR 8,900 crores. And in 7GPRA Colony, Delhi, we have around INR 15,000 crores of order. And in Maharashtra, recently we got [indiscernible] INR 25,000 crores. JNK Satellite redevelopment that is around INR 15,000 crores. So across India, we have future projects. Currently, we have the projects -- running projects, I can say, in Delhi NCR. And even North East, also we are getting some orders [indiscernible] hospital work and all. So recently, we got some [indiscernible] Residential School in Chhattisgarh, so that tendering is going on. Recently, South also Bangalore. Earlier, we don't have any work in Bangalore. Recently, we got health mission work. So we are executing all over India, we're focusing on all over India. Goa, in advance phase redevelopment of Goa projects already completed, [indiscernible] on final stage. We are going to call tender either this quarter or definitely next quarter.

Okay, sir. Is you are expecting a top line of between INR 20,000 crores, INR 25,000 crores in that '27-'28 year. So what are you expecting the EBITDA margin to be in that time line?

The EBITDA 8% to 9%.

The next question is from the line of Tanmay Phabrani from Nuvama.

My first question would be on the order book split between PMC and redevelopment.

PMC around 90%, 92%. And redevelopment is 40% to 50%. In segment wise, 43% PMC, 57% redevelopment in stand-alone basis. Whereas, consolidated level 51% PMC, 49% redevelopment.

Got it. Got it, sir. Sir, the next question would be on the guidance for order intake and order awarded for FY '26.

'26 we're going to award around INR 15,000 crores. We're targeting to award INR 15,000 crores minimum. This is minimum, conservative figure. And we are expecting minimum INR 20,000 crores business development during this year.

Great. Great, sir. And sir, any status on rates? And we wanted to know about the top 10 projects right now, which are in the order book, along with the value of those projects.

One is 7GPRA Colony that is redevelopment of 7GPRA Colony, Netaji Nagar, Nauroji Nagar, Sarojini Nagar. Of course, Nauroji Nagar completed and 100% we have sold the commercial space. So the rest of the thing is Amrapali -- second one is Amrapali. Third one is JNK [indiscernible] Odisha-Cuttak, Odisha also, we are doing good business. Recently we're awarded Central University [indiscernible] awarded to the contractor. And we are doing good job. Delhi Development Corporation work due to National Committee, the work awarded 1 year back, but we could not start. Now the Standing Committee has formed and approval is in process. And in GVC in Kolkata and Durgapur some other Colony, we are doing residential colonies, these are all the major projects. And one more thing, we have successfully completed that [indiscernible] project. Our Maldives project almost completed. Next month, we were going to hand it over. Recently, our Prime Minister inaugurated that building during his visit to Maldives. So that's a successfully completed. First time in Maldives, we have constructed with [indiscernible]. Before that, they used to do conventional method, now they are using [indiscernible] project successfully completed and recently PM inaugurated that building.