Why NBCC share is falling? Should you invest?

NBCC

Friends if you are tracking this stock, then you must have seen over the last couple of months NBCC has slided considerably.

Today through this post we will analyze NBCC and see whether it's a good option for investment or not.

NBCC


Friends NBCC shares had a phenomenal run, from 2014 to 2017. But after that its decline started.

So at this point many investors are worried, why such a multi bagger is falling. They are confused whether to put their money in NBCC.

Friends NBCC stands for NATIONAL BUILDING CONSTRUCTION COMPANY. It's a PSU company, with promoters holding more than 70% shares.

The biggest advantage NBCC has is 80% of the government projects falls into its kitty, so you can say it sort of has monopoly, as far as government constructions are concerned.

Therefore order inflow of this company is awesome. At present it has an order inflow of 80,000 crores. Above that NBCC charges around 10 to 11% commission on project value, for its consultancy services.

So earning visibility of NBCC is very good. One big plus point this company has got is, it's a zero debt company.

If you were to compare NBCC with most of its peers, then it could be seen that most of them have debt to equity ratio as more than 1.

Why is NBCC falling?


Friends this company was trading at 9rs in 2014 and at 2017 it touched 138 rs, in 4 years it gave a whooping 1400% returns.

Friends the main reason for its fall, could be attributed to conditions that changed after demontisation in real estate sector, also many of its clearances were pending, which company claims that would be sanctioned in coming months.

State elections which got over recently and the union elections which are scheduled in coming couple of months, also are responsible for its downfall. Friends generally during elections, the clearances and sanctions of psu undertaking take a backseat.

Why should you invest?


1. Friends this stock looks very tempting to me, considering the price at which NBCC is trading currently.

2. The biggest beneficiary of Governments plan of HOUSING FOR ALL will be NBCC.

3. The fundamentals of company are good.

4. Company doesn't have any debt on it.

5. Currently company has inflow order of 80,000 crores and as per company by the end of 2019 the orders will touch 1 lakh crores.

6. Its a navratna company.



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