This document provides an investment snapshot and overview of NBCC Limited, an Indian construction company. It includes slides on NBCC's investment case, business operations, financial performance, and concerns. Specifically: - NBCC is recommended as a buy, with a maximum 5% portfolio allocation. It has a stable business model in construction and project management. - The company has a proven track record of executing projects for the Indian government. It derives most revenues from project management consultancy services. - Financial slides show NBCC's profit and loss statement, balance sheet, and order book of over Rs. 75,000 crore. - Concerns include dependence on the government for projects and potential risks from

2. Content Index
• NBCC Limited – Investment Snapshot :- Slide #3
• NBCC Limited – Business Overview :- Slide #4
• NBCC Limited – P&L :- Slide #20
•NBCC Limited – Balance Sheet :-Slide #21
• Concerns & Reasoning :- Slide #22

3. NBCC- Investment Snapshot
(as on Mar 08, 2017)
Recommendation :- BUY
Maximum Portfolio Allocation :- 5%
Investment Phases & Buying Strategy
1st
Phase (Now) of Accumulation :- 80%
Current Accumulation Range :- 165-170 Rs
NBCC is ourtypical Multibaggerstock, but a Stock which is
a Good Investment under current Market conditions. It has
a stable business model trading at reasonable valuations
which will deliversuperiorreturns in the long run.
Core Investment Thesis :
The company is in construction space and is a preferred by the
government for PMC contracts. The company has a proven and
consistent track record in executing projects and is well
positioned to use its government patronage to its advantage
there by enhancing shareholder value.
Current Market Price – Rs. 168
Current Dividend Yield – 1.20%
Bloomberg / Reuters Code –NBCC. IN/
NBCC.NS
BSE / NSE Code – 534309/ NBCC
Market Cap (Rs. Cr) – 15057
Total Equity Shares [Mn]– 120.00
Face Value – Rs. 2
52 Week High / Low – Rs. 199.61 /
Rs.117.34
Promoter’s Holding - 75.00%
Other Holdings - 25.00%

4. Business Overview

5. NBCC– A Snapshot
•NBCC is a leading player in the
project management and
consultancy segment apart from
expertise in residential and
commercial complexes,
institutions, hospitals and other
buildings.
• The company is also engaged in
sewage treatment plants, roads,
civil infrastructure for the power
sector and other civil and
structural works predominantly
for state and central government
ministries and various PSU’s.
• In the PMC division, the company provides management and consultancy services for a range of civil
construction projects such as residential and commercial complexes, redevelopment of buildings and
colonies, hospitals, educational institutions, etc.
•In civil infrastructure for the power sector, the company provides engineering and construction services for
power projects, including design and execution of (i) civil and structural works for power projects (ii) cooling
towers and (iii) chimneys.
•In the real estate development division, the company focuses on residential and commercial development.

6. NBCC - Journey sofar

7. Business Overview

8. Unique Business Model
•NBCC is a unique player, which
provides project management
services to government projects.
•The company has established a
relationship with different state and
central government ministries,
department, agencies and various
public sector undertakings.
•NBCC enjoys automatic nomination
status for PMC civil construction
projects related to government
projects.
•The company is also preferred for
executing projects involving re-
development of government
colonies.
•The company is also involved in
civil construction work for power
projects thereby providing
engineering and construction
services.

9. PMC Business Process
•NBCC sources most of its business mostly through
nomination where the client approaches the company
for the project.
• NBCC appoints consultants through bidding who
would prepare the detailed project report.
•NBCC executes a letter of intent with the client
setting out the terms of engagement and fees.
•The consultant prepares Bill of quantities in
consultation with NBCC and the same is submitted to
the client for approval.
•NBCC monitors and supervises the work done
by contractors and ensures the project meets
the specifications of the client.
•On completion of construction the project will
be handed over to the client and final payment
and completion certificate is received from the
client for the completed project.

10. Real Estate development cycle
• Land is identified, evaluated and acquired either
from the government or private owners or through
joint venture arrangements.
• NBCC existing land bank is a mix of land acquired
(either owned or through long leases from the
government on a nomination basis or through
competitive Bidding process or auction or private
owners or through joint venture arrangements
•In order to acquire land, NBCC enters into a sale
deeds or a perpetual lease deeds and get the property
registered in our name. For the projects to be
undertaken through joint ventures NBCC enters into a
joint venture agreement with the land owner.
• NBCC outsource the construction of projects to a
number of contractors for different aspects of the
project, while retaining a project management role.
•On completion of the project the company receives
occupation certificate and transfer the title or lease
hold rights to the customer as the case may be.

11. PMC Business Process
•NBCC sources most of its business mostly through
nomination where the client approaches the company
for the project.
• NBCC appoints consultants through bidding who
would prepare the detailed project report.
•NBCC executes a letter of intent with the client
setting out the terms of engagement and fees.
•The consultant prepares Bill of quantities in
consultation with NBCC and the same is submitted to
the client for approval.
•NBCC monitors and supervises the work done
by contractors and ensures the project meets
the specifications of the client.
•On completion of construction the project will
be handed over to the client and final payment
and completion certificate is received from the
client for the completed project.

12. Power sector development cycle
• NBCC prospective clients typically advertise
potential projects in national newspapers or on
their websites. NBCC evaluates and makes a market
assessment, based on which it submits its
Bids/tenders.
• NBCC’s Client evaluates the tenders submitted by
various Bidders and issues a Letter of Intent to the
successful Bidder.
•NBCC invite tenders from subcontractors and based
on the technical and financial criteria met by them,
they are selected and the said work.
• NBCC monitors the project to verify whether the
project meets the specifications of the client.
•On completion of the project the company receives
occupation certificate and transfer the title or lease
hold rights to the customer as the case may be.

13. PMC Business Overview
•NBCC’s PMC business is the main stay of the company with about 90% of revenues being generated from
PMC projects.
• NBCC has over the years, leveraged its PMC expertise in diverse segments of the civil construction such as
residential and commercial complexes, institutions, hospitals and other buildings, sewage treatment plants,
roads; and civil infrastructure for power sector such as cooling towers, chimneys and other civil and
structural works.
•NBCC’s Order Book of the PMC projects comprises of about 38% - institution segment, 44% - infrastructure
segment, 14% - commercial construction and 3% - residential construction.

14. Strong Order book
•NBCC’s order book stands at ~Rs. 75,000 crore including redevelopment opportunities which provides
strong visibility in the medium term.
•NBCC’s order book consist of ~90% from PMC & redevelopment, ~10% from real estate & EPC division.
•Going forward, the management has guided for order inflows of ~Rs. 3000-5000 crore for Q4FY17 and ~Rs.
10000-15000 crore in FY18E. Going ahead, NBCC’s is likely to have order book of ~Rs.94109 crore, ~Rs.
104922 crore in FY18E, FY19E, respectively, on the back of healthy opportunities.

15. Smart City Projects
•NBCC is currently exploring potential opportunities emerging from 100 Smart Cities & Atal Mission for
Rejuvenation & Urban Transformation (AMRUT) scheme announced by the Ministry of Urban Development
(MoUD).
• NBCC is likely to benefit from smart city project towards which Rs. `48,000cr has been earmarked by the
government for “100 Smart Cities” Scheme, to be invested over the next 5 years.
•Although the design and development framework for ‘Smart Cities’ in India is at an early stage, the
company expects execution to pick-up once requisite approvals are in place and issues pertaining to
financing are addressed schemes.
•Gearing up to the emerging opportunities and strengthening its position, NBCC has already entered into
MoUs/ JVs,) with CDBIH, Malaysia to gain access to new technologies, which would be helpful in the
development of smart cities.

16. Major Clients

17. Pan India/Global Presence

18. Robust working capital
•NBCC has a unique advantage of generating cost-free float from its PMC division where it is able to get
revenue upfront from clients. Consequently, this has led to a negative working capital cycle and healthy CFO
and FCFF over the years.
•The negative working capital is one of the biggest economic moats of NBCC as compared to its peers in the
industry. In FY14, NBCC enhanced its land bank to expand its real estate business, which led to an increase in
inventory, in turn, leading to a higher working capital and lower CFO compared to those in the previous
year. Hence, it earns from both operations as well as float.

19. Financials

20. P&L

21. Balance Sheet

22. Concerns & Reasoning
1.) Dependence on Government for Projects :
The Company’s PMC and Civil Infrastructure for power sector segments are fully dependent on projects
awarded by government entities. Accordingly, any change in the government’s policy or in budgetary
allocations may adversely affect its order book and future business prospects.
2.) Land and Real Estate related Risks :
NBCC title and development rights or other interests over land may be subject to legal uncertainties and
defects which may have an adverse impact on its ability to develop and market projects developed on such
lands
3.) Excessive dependence on PMC Business :
NBCC derived 90% of total income in FY 2016 from its PMC segment. Any decline or delay in this segment
might have an adverse impact on the future business prospect s and the financial condition.
4.) Venture into overseas Markets :
NBCC has also ventured into overseas markets where the expertise and domain knowledge are entirely
different. Further, any change in government policy may adversely impact the company’s revenues and
profitability.

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