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

Ladies and gentlemen, good day, and welcome to NBCC Limited Q2 and H1 FY '26 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this cast is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities Limited. Thank you, and over to you, sir.

Good afternoon. On behalf of ICICI Securities, I welcome you all to the Q2 FY '26 Earnings Call of NBCC (India) Limited. Today, we have with us from the management, Shri K.P. Mahadevaswamy, CM Chairman and Managing Director; Shri Pali Mahamad, Director Projects; Dr. Suman Kumar, Director Commercial; Shri Anjeev Kumar Jain, Director Finance; Shri MD Sokhey, Executive Director, Finance; Shri Balkishan Singla, Investor Relations. . Without much delay, I will now hand over the call to the management for the remarks, which will be followed by Q&A. Thank you, and over to you, sir.

Good afternoon to everyone. A warm welcome to all of you in today's investor call for second quarter. For quarter stand-alone operation and execution, we have achieved a total income of INR 2,225 crores, and INR 3,017 crores on consolidated, reflecting a 20% year-on-year increase on a consolidated level basis. And our stand-alone PAT -- 173 crores making a significant 40% year-on-year growth. Additionally, our consolidated PAT stands INR 17 crores, marking 25% year-on-year. EBITDA margin for quarter-to-quarter have reduced slowly because of lower contribution from our real estate projects and lower marketing fees from Anapai projects. Our EBITDA margin for H1 to H1 has increased, and we are very sure that we will improve our EBITDA margin year-to-year basis. Order book. NBCC stand-alone order book standing INR 1,12,000 crores and consolidated order book INR 1,28,000 crores. Business secured. NBCC has secured INR 6,800 crores on a consolidated basis in quarter 2, which makes a total of INR 10,000 crores in first half of 2025, '26, following major projects secured during quarter 2 by NBCC. Rajasthan state Industrial Development and Investment Corporation that is RICO are around INR 2,136 crores, development of Navin Masco for NMDA around -- African Juice, Safari Plaza, animal hospital, quarantine facility and other liver -- 355-year on with the departmental force per development host for land development across India. Other strategic MOU with Australian developer for expand global footprint. Also strategic MOU with Pantheon Elysee Real Estate Development LLC for real estate project in UAE. Business award to the contractor. In quarter 2, we awarded 2 new tenders for -- on consolidated level, which makes INR 3,800 crores in a 2025, 2026. In next half, we are expecting or INR 12,000 crores new work will be awarded. Redevelopment projects. In H1 2026 GTR development work has contributed INR 1021 crores in top line. First rate of Netaji Nagar project valued INR 1,450 crores, which are around 93% completed and 2 more projects in Netaji Nagar giving contribution and INR 2,000 crores more in pipeline to award in Netaji Nagar. This is a large project and work has been going on 10 packages worth of INR 8,000 crores and proof projects have competed and INR 5,000 crores more in pipeline to award in Sarojini Nagar. Pale projects. Half -- clearly 1H number clearly we have -- contributed to INR 1,054 crores in top line. Our Amrapali projects phase when MPCC has completed almost 23 projects out of 24 projects and completed 30,000 units and will complete other savaged -- units by June '26. That is the only one project left with us. In Phase 2, Amrapali project has started in different packages, which consists of 17,000 3 of sale and the construction cost are around INR 12,400 crores. This project will have a significant contribution in top line and bottom in coming quarters. Thank you. Now the forum for question and answers.

[Operator Instructions] The first question is from the line of Ravi Kumar Naredi from Naredi Investments LLC.

Sir, really, I can say it is a fantastic result. NBCC, I am looking after since last 10 years. Sir, we have order book of INR 1,28,000 crores. While our education this year may be INR 12,500 crores to INR 13,000 crores. If I apply net profit rate of H1, that is 7.65%. Our net profit comes INR 1,000 crores this financial year basis. Is it possible? .

We are expecting INR 800 crores to INR 900 crores during this year. That will be our profit.

Okay. And sir, while we are not educating the project, we hire outside agency, then why we could not do fast projecting -- because INR 1,28,000 if I took our project order and started INR 12,500 crores is yearly education. Why we are lacking in the project execution. Can you tell the specific reason?

This INR 125,000 crore from MAHAPREIT, this is a redevelopment project wherein we have to arrange the fund redevelopment construction. So now recently, Anubatantioned -- sanctioned the loan for construction of 3 packages. So it will start, here, it is not a P&C project, not a budgeted project, wherein budget, you will get the money. Here, it is a sustainable mode project. Similarly, and demos -- the approval is getting delayed. It is the government projects, maybe we also -- we have to do a redevelopment model. So already it is taking some time. So once these 2 projects started, this is altogether INR 40,000 crore per quarter in these 2 projects. So we recently back. So we all the projects we are doing in till sustainable mode redevelopment margin. So that's why it is getting signed. Once it's started, means the packages definitely it will run and will get good revenue as well as profit also.

So to how much is loan sanctioned to us.

Not us. We are not taking any loan. Actually, client is taking the loan, the market is taking the loan. NBCC is taking loan, it's no issue because land like with them. So loan will be taken by them only, we are the project management consultant for them.

Understand. My question is wherever you tell the -- has sanctioned the loan for the project, how much the loan amount? Can you tell us.

They have sanctioned in the first place, I think INR 11,000 crores they have sanctioned that includes the land acquisition also wherein they acquire the land. And market, I think INR 3,000 crores they already have sanctioned.

So INR 14,000 crores they have sanctioned, right? .

Yes, yes. for them. Yes, yes. .

Yes, not us, not us. And sir, out of INR 1,20,000, how much boost we have clear mandate to start the project, can you tell in that.

Almost INR 34,000 crores in our earning projects, INR 40,000 crores in our running projects. But of course, the 7 -- also some INR 6,700 crores to starts. So already, we have INR 34,000 crore in land running projects. This is running projects.

INR 34,000 crores is running project. which we may finish in next 2 years, 3 years?

Yes. Yes, yes, definitely, less than 2 years. Some projects even 18 months, some project, 24 months, some projects 3 years.

And how is our backlog of Delhi residential colony, how much we have sold in this quarter? .

Delhi, there is no residential sales so far, it will come in future. 100% we have sold it in Nauroji Nagar. There is no complementary in -- Nauroji Nagar, 100% sold.

Nauroji Nagar 100% sold. Any other no residential project in Delhi, which need to sell, right? .

It will come.

One commercial project is there worth INR 9,000 crores, which will be outstanding coming months.

Remaining months. INR 9 crores to INR 10 crores. Yes, exactly opposite to World Trade Center. There will be commercial space that we're going to launch in the month of first quarter -- fourth quarter, fourth quarter, January.

The next question is from the line of Dikshit Doshi from Whitestone Financial Advisors Private Limited. .

My first question is, so can you just break up in terms of order book, how much is on a self-sustainable model and how much on the budget allocation.

Around 40% on PMC as far as only stand-alone, if we considered stand-alone and 67,000 in redevelopment model. 40-60. 40% PMC model and 60% redevelopment.

Okay. So we can say that this 40% PMC will be more or less executable in the next 3 years and 60% of redevelopment maybe 4 to 5 years?

Yes, definitely. .

Okay. Okay. Now my second question is there were talks earlier regarding the more colony redevelopment in Delhi. So if you can elaborate or any update on that.

It is in process right now, I can say, it is in process as soon as we will get the confirmation out of immediately, I will inform you, presently, it is under talks.

Do you expect that any time in this year or it may take some more time.

Certainly this year, it will come. .

This year, it will come in. How big it could be?

Presently, how can we tell. Because it is a price sensitive matter. I'll let you know.

Okay. And next question is regarding the chronic lens. So how much square feet, I mean how much area we total have and how much square feet we can build on that? .

So around 21 acres we are going to get, it will be resolved at earliest. So hopefully, by this year end or next year first quarter, we're going to start the construction and will start the sale of the commercial spaces also. And it will go in to give around INR 8,000, something like that, some INR 1,000 crore impact revenue INR 7,300 crores.

For entire 21 acres, INR 7,000 crores of top line, we can.

Yes, yes. And around INR 5,200 PAT will be there. This is all consecutive figure.

Okay. Yes. Yes. Got it. And in terms of our other income, so if I see the quarter it is around INR 106 crores, INR 107 crores. And for the half year, it is INR 81 crores. So is it predominantly from the interest income on the cash we have? Or is there a one-off as well.

It consists of 3 things. On GG Director Finance. It constricts of 3 elements. One is land and industrial product in Noida. From there, we will get INR 44 crore mean in the other income. And approximately INR 42 crores is from dividend from our subsidiaries. And that is from the interest.

No. But dividend from subsidiary would have been knocked off in consol numbers, right?

Yes, I'm talking about a stand-alone number only.

The next question is from the line of Vasudev from Nuvama. .

Sir, this 40-60 split that you gave as a stand-alone, what's the similar state for the consol level? .

Consol level INR 47, 53. It is 47%, 53%, 61,000 for PMC. And 67% on redevelopment. In the subsidiaries, they are not doing any redevelopment. Basically, they are doing on the PMC business. .

Okay. And sir, in terms of our project awarding, so how much have we awarded in Q2? And what is our target for the second half of the year? .

So far, we have awarded 3,752. Hopefully, we're going to complete to INR 11,000 crores during this year. That is our target, minimum target.

Okay. So this was in the second quarter or the first half, INR 3,700.

This was up to second quarter.

Now that we've already won about INR 1,000 crores in H1. So for the second half, how much more new orders are we looking at? .

Another minimum 10,000. That is our minimum target, but it will cross more than 10,000. .

Okay. So overall, will be exceeding about INR 12,000 crores. That's great. So then for FY '26 and '27, what kind of revenue growth and EBITDA and PAT margins are we looking at? .

Top line we're certain 20% growth. And on bottom line, that our PAT margin and EBITDA will be in vicinity of 7% to 8% and EBITDA will be in the vicinity of 6% to 6.5%.

Okay. And for FY '27, again, we are targeting proportional growth in revenues?

We are bound by a target set by the -- Ministry -- so every year, we should give a minimum growth of 20%.

Already sold -- once these 2 redevelopments projects start, we're going to achieve more than that, whatever minimum set rate that is as per MOU, but we'll go into after this MAHAPREIT and JMP starts means, we're going to get more revenue.

Okay. Yes, yes. Sure, sir. Sir, on 7 GPRA society at Nauroji Nagar and Netaji Nagar, what is the total pending order book in this project? .

Around INR 7,000 crores is pending. .

Okay. And about just in Netaji Nagar, which is going to... .

Out of 7,000, we will go into plot tender in this quarter only around INR 4,000 crores to INR 5,000 crores, we're going to get the tender. It is ready, and we were going to call the tender. .

Okay. That's quite interesting, sir. So sir, in the Netaji Nagar, what is the value of the volume which is currently ongoing. I miss that number, which is 93% completed, you said. So what is the value of that? .

That is 1,450.

In this Amrapali project, you said that our margins were down because the marketing piece was lower. So it was like generally for the project as a whole market fees is low or it is only for this quarter.

Only this quarter. This quarter, we could not sell the property. That's why we could not get the -- it is a quarter-to-quarter comparison only. Otherwise, we are getting 1% marketing fee. There is no reduction in marketing fee.

Okay. Okay. Okay. So because of lower sales. .

In the last quarter.

Got it, sir. And what is the status on the super tech projects currently?

Super tech, I think 8th December, there will be a hearing in the Supreme Court, hopefully waiting for the Supreme Court decision. It will come. It will come. It is taking some time the wall. So it will come to our city.

Okay. That's for sure, sir. Sir, just 2 more question in the bookkeeping front. So what is the value of real estate, our owned real estate that we sold in the first half? And how much are we targeting for the full year? .

The total value of real estate on our books for account is INR 958 crores. And in the first half of this year, our turnover on the real estate was -- will be INR 26 crores.

This was the revenue or the presales that you recorded INR 26 crore? .

Revenue from real estate is only recorded in the book accounts once it is sold, real estate will be transferred.

Okay. So like this INR 26 crores is the revenue, right, and not the presales? .

No, not the presales. Presales numbers are 20%.

Okay. And what would be the presales one be for the quarter or for the first half and our target for the full year.

In fact, right now, there is no presale. Whatever sale was launched, it was completed for this half year only. So INR 24 crores is the sale number, revenue number and there is no presale as such, okay, and our target for this year is approximately INR 64 crores, INR 65 crores.

Yes. Yes. And sir, lastly, how much seed money that we currently have in the books? .

Seed money, INR 481 crores, out of that INR 455 crores is for Amrapali project and INR 16.5 crores for green project.

The next question is from the line of Sumit Rohra from Smartsun Capital Private Limited. .

I would like to congratulate you on a good set of numbers. Sir, my question is more related on the overall business because today, if you see your order book is about INR 1,28,000. Now sir, my sense is that this order book will have to be executed over a period of 4 to 5 years. So isn't it fair to understand that your revenue should actually start climbing at a very fast clip because most of these orders which you have, you would have to execute over the next 3, 4 years. Secondly, sir, if you can please throw some light on the order visibility which you see because clearly is the focus which we are picking up is basically of development. And you are a key instrumental player who is basically in this segment. Sir, can you throw some light on order visibility which you see. And even on the profitability side, if we take a 3-year view, can you also throw a little bit of light on how you see profits evolve, sir?

Mr. Sumeet, I already spent out of INR 1,12,000, some INR 40,000 crores, we cut from J&K and MAHAPREIT Bombay. These 2 projects I think a new discovery is going to start due to a sensationable -- mode and redevelopment model, we need some seed money to start the projects thereby we stuck up. So now we got -- recently they would -- only at the sanctions and loan also. So now MAHAPREIT is going to take place. So similarly, J&K is going to get at the earlier. So once these 2 projects started, definitely, our top client will increase. Once top line increase because lower fixed expenditure that is our overhead calories only. So after that, the bottom line also will rapidly increase. So regarding new future business, we have a top line rather finalization with the redevelopment of other economies in Delhi. DDA is going to interest 2 more colonies to us for redevelopment. MCD, Municipal Corporation of Delhi, PWD. So we have a lot of work going on in pipeline. Similarly, we are talking with various state governments, Jaipur also willing to do some more stores. So HPCL, they wanted to redevelop in Bangalore. So various PSUs, PSUs that are in new land parcel or they have their old colonies, project colonies. So that too is going to redevelop. So we have very good order book in pipeline. So once we will get the order book, then definitely we'll go to intimate you because it is a price sensitive issue, that's why directly I cannot tell you which are all when it comes. Definitely during the year, paying 10 tonnes -- is bare minimum, you'll get more work order.

Sure. But sir, I mean, so -- I mean, my point is that I understand that this year, you'll see about a 20%, 25% growth in revenue. But sir, my understanding, I mean, if you can correct me that going ahead from next financial year, your revenue should pick up at a faster clip, right? Because, I mean, as you keep awarding more and more orders. I'm sorry? .

And yes, definitely, I'm saying conservative figure, but it will increase, definitely, it will increase.

And sorry, I mean if I heard correctly, your EBITDA margins will be close to 6.5%. Is that right, I heard? .

Yes, yes, yes. .

The next question is from the line of Diviyan Doshi from the Darga Securities Private Limited. .

Congratulations on the great set of numbers. I wanted to know that in earlier calls, you had mentioned that the state development projects in Rajasthan government, Chhattisgarh and Kerala housing board almost 12 DPR in the final stage. But in Q2, we were -- we only see orders being added and not actual work stand -- starting on the ground. When do you expect real execution to this project? And what's your internal time line for approvals.