NBCC maintained strong execution run rate and posted 39% YoY jump in revenue growth for Q4FY16. One-off employee costs led to reported EBIDTA margin falling 220bps YoY to 7.8%. However, adjusted PAT was in line with estimates. Aided by order intake worth INR175bn during FY16, the company’s order book stands at ~INR310bn (book-to-bill at 5.3x) with further ~INR300bn projects at various stages of approval. Robust revenue visibility, cash-rich balance sheet and near monopoly in redevelopment space will enable NBCC to post 30% plus PAT CAGR over FY16-18E. Maintain ‘BUY’ with a revised target price of INR1,267 (INR1,278 earlier).

Robust execution continues
Top line surged 39% YoY to INR23bn in Q4FY16 (our estimate INR22.6bn) with ~INR3bn contribution from Kidwai Nagar project (INR9bn in FY16). One-time provision for post retirement medical benefits as well as special bonus to employees on achievement of ‘Navratna’ status impacted margins. Reported PAT, at INR1.4bn, was up 4% YoY; adjusted for one-offs, it would have been in line with estimates. The company delivered 32% top-line growth in FY16 with adjusted post growing ~20%.

Strong revenue visibility, opportunities galore
NBCC ended the year with order book of INR310bn (FY15 order book at ~INR193bn). In addition, projects worth ~INR300bn (including 2 projects from DDA, government colonies redevelopment in Delhi) are at an advanced stage of approval. Management expects sanction for redevelopment of government colonies in Delhi to come by July end. These projects will require initial investment of INR3-5bn.

Outlook and valuations: Attractive; maintain ‘BUY’
Operating leverage and increasing share of redevelopment projects will improve margin trajectory going ahead. Burgeoning order book, robust return ratios (25%+ RoEs) and cash-rich balance sheet make NBCC a worthwhile bet in our view. We maintain ‘BUY’ with a revised target price of INR1,267, based on 27x FY18E EPS.