Nagarjuna Construction Co. Ltd— BUY—166—INR
Sector — Construction (Infrastructure)
Regd.Off.— 41, Nagarjuna Hills, Hyderabad, A.P.-500 082
Listed — NSE, BSE.
Company Overview—
Nagarjuna Construction Company was incorporated in 1978. The company has consolidated its presence in high growth infrastructure sector such as Roads, Water supply, and Electrical Transmission Systems. Company went public in 1992 and is engaged in industrial construction, housing development projects, plant and non-plant construction for nuclear projects, construction of hospitals, construction of roads and bridges including national highways, fabrication, erection of structural steel works etc. Apart from the conventional construction methods, the company adopts the NBS Cellular System, which was developed in collaboration with Byyging Uddheman AB of Sweden and NCC Pre Fab System, which was developed in house. Strategic tie-ups with leading multinational companies keep NCC abreast with latest developments in the field of construction and also put it on par with international companies in terms of standards of performance and quality of projects.
Products & Services—
Company is involved into construction of Industrial & Commercial buildings, Roads, Bridges & Flyovers, Water Supply & Environmental projects, Housing, Power transmission lines, Real Estate development, Irrigation and Hydropower Projects, Social amenities etc. Company has presence & capabilities in all area of construction activities. Company has ISO 9001:2000 certifications.
Industrial Structures & Buildings— Company provides long lasting buildings and industrial structures at optimum cost and in minimal time. Construction of large factory and workshop structures has been made speedier and more economical by the use of modern construction methods including folded plate and shell roofs, precast and prestressed roof elements etc. The largest Cardiac hospital in Asia; a record seven month turnaround time for a turnkey Airport project; the largest single concrete slab in Asia, Company has notched up many firsts to its credit.
Transportation— Indian Government is actively building world-class infrastructure facilities in the country, to place it on par with developed economies elsewhere in the world. High density corridors have been identified and the exercise of strengthening and four laning of highways has already been started. Company has been chosen to execute highways, bridges, flyovers and road projects all over the country. The carriageway of a ring road, Bangalore; the construction of an international quality six lane highway in Samalkha, Haryana; the Kalina-vakola junction flyover, Mumbai; the Grade separator at Bangalore; the Subway and Flyover at Latur, stand for company's expertise in infrastructure projects.
Water & Environment— Company executed major water supply projects, drainage schemes, construction of water and sewage treatment plants, turnkey solutions in water supply and UGD schemes, including survey and design. It has capabilities in the areas like - Turnkey implementation of rural, urban and industrial water supply projects from concept to commissioning, implementation of waste water collection systems for urban communities and industrial waste disposal, implementation of water treatment plants and sewage treatment plants from concept to commissioning.
Housing— Company has developed and deployed innovative operational methods including the highly effective: 1) NBS Cellular Construction System - It replaces all conventional methods of building construction by incorporating load bearing RCC shear walls. Roof slab is cast monolithic with RCC walls, eliminating construction joints and thus reducing the possibility of cracking and dampness, while enhancing the speed of construction manifold. 2) NCC Precast Construction System - It involves the manufacture of precast building components at site to achieve larger volumes of built-up area and greater quality levels in the least possible time.
Electricals— Company has expertise in the engineering and construction of EHV/HV sub-stations, transmissions and distribution lines, distribution system improvement projects, internal and external electrification of multi-storeyed utility buildings & commercial complexes and township electrification.
Property Development— Company has acquired properties for the construction and sale of independent houses, multi-storyed apartments and commercial complexes. The initial ventures have been undertaken in Bangalore/Mysore. Residential flats in JP Nagar, Bangalore; residential apartments at Mysore; Nagarjuna Elysses, deluxe apartments coming up in Richards Town, Bangalore; Nagarjuna Gardens, Sahakarnagar; Nagarjuna Spectrum, at Indiranagar, Bangalore; Nagarjuna Green Ridge at HSR layout, Nagarjuna Maple Heights at Marthahalli Bangalore, Nagarjuna Green Woods at Marathahalli Bangalore, Nagarjuna Pearl Bay at Kochi, Bangalore speak of NCC's determined efforts to excel in this area of construction.
Irrigation & Hydropower— with good presence in various sectors of the construction industry and looking to the emerging opportunities the company is working on various water supply and power plants projects around the country.
Recent developments—
In July 2009, Company has obtained three new orders aggregating Rs 7.76 billion. The first order valued at Rs 6 billion is secured from Employees State Insurance Corporation, New Delhi for construction of medical college and related works at Mandi, Himachal Pradesh to be completed over a period of 24 months. The second order is from general manager, Mezgon Dock, Mumbai for Mazdock Modernization Project works in Mumbai valued at Rs 1.36 billion to be completed over a period of 28 months and the third is from National Institute of Technology, Assam for construction of 500 capacity boy’s hostel valued at Rs 400 million to be completed over a period of 16 months.
In September 2009, Company has bagged two new orders aggregating Rs 4.81 billion. The first order valued at Rs 4.49 billion is obtained from Water Resource Department, Bihar for execution of restoration of Eastern Gandak Canal system to be completed over a period of 25 months. Meanwhile, the second order is from MRF, Chennai for construction of proposed radial tyre plant and easy tyre plant in Andhra Pradesh valued at Rs 320 million to be completed over a period of 6 months.
In Nov 2009, Company has secured five orders aggregating Rs 7.22 billion. The first order is valued at Rs 3.28 billion from Water Supply & Sewerage Board, Bangalore for water supply and sewerage project at West Bangalore to be completed over a period of 26 months. The second is order from Water Resources Department, Bihar for construction of Bituminous Road worth Rs 1.43 billion to be completed over a period of 24 months. The third, fourth and fifth orders are worth Rs 1 billion, Rs 910 million and Rs 600 million respectively.
Valuation—
At current market price, stock is trading at 19.57 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy “Nagarjuna Construction Company Ltd” with medium to long-term investment horizon.
Source: Internet (Valuenotes by Abhishek Jain)
Sector — Construction (Infrastructure)
Regd.Off.— 41, Nagarjuna Hills, Hyderabad, A.P.-500 082
Listed — NSE, BSE.
Company Overview—
Nagarjuna Construction Company was incorporated in 1978. The company has consolidated its presence in high growth infrastructure sector such as Roads, Water supply, and Electrical Transmission Systems. Company went public in 1992 and is engaged in industrial construction, housing development projects, plant and non-plant construction for nuclear projects, construction of hospitals, construction of roads and bridges including national highways, fabrication, erection of structural steel works etc. Apart from the conventional construction methods, the company adopts the NBS Cellular System, which was developed in collaboration with Byyging Uddheman AB of Sweden and NCC Pre Fab System, which was developed in house. Strategic tie-ups with leading multinational companies keep NCC abreast with latest developments in the field of construction and also put it on par with international companies in terms of standards of performance and quality of projects.
Products & Services—
Company is involved into construction of Industrial & Commercial buildings, Roads, Bridges & Flyovers, Water Supply & Environmental projects, Housing, Power transmission lines, Real Estate development, Irrigation and Hydropower Projects, Social amenities etc. Company has presence & capabilities in all area of construction activities. Company has ISO 9001:2000 certifications.
Industrial Structures & Buildings— Company provides long lasting buildings and industrial structures at optimum cost and in minimal time. Construction of large factory and workshop structures has been made speedier and more economical by the use of modern construction methods including folded plate and shell roofs, precast and prestressed roof elements etc. The largest Cardiac hospital in Asia; a record seven month turnaround time for a turnkey Airport project; the largest single concrete slab in Asia, Company has notched up many firsts to its credit.
Transportation— Indian Government is actively building world-class infrastructure facilities in the country, to place it on par with developed economies elsewhere in the world. High density corridors have been identified and the exercise of strengthening and four laning of highways has already been started. Company has been chosen to execute highways, bridges, flyovers and road projects all over the country. The carriageway of a ring road, Bangalore; the construction of an international quality six lane highway in Samalkha, Haryana; the Kalina-vakola junction flyover, Mumbai; the Grade separator at Bangalore; the Subway and Flyover at Latur, stand for company's expertise in infrastructure projects.
Water & Environment— Company executed major water supply projects, drainage schemes, construction of water and sewage treatment plants, turnkey solutions in water supply and UGD schemes, including survey and design. It has capabilities in the areas like - Turnkey implementation of rural, urban and industrial water supply projects from concept to commissioning, implementation of waste water collection systems for urban communities and industrial waste disposal, implementation of water treatment plants and sewage treatment plants from concept to commissioning.
Housing— Company has developed and deployed innovative operational methods including the highly effective: 1) NBS Cellular Construction System - It replaces all conventional methods of building construction by incorporating load bearing RCC shear walls. Roof slab is cast monolithic with RCC walls, eliminating construction joints and thus reducing the possibility of cracking and dampness, while enhancing the speed of construction manifold. 2) NCC Precast Construction System - It involves the manufacture of precast building components at site to achieve larger volumes of built-up area and greater quality levels in the least possible time.
Electricals— Company has expertise in the engineering and construction of EHV/HV sub-stations, transmissions and distribution lines, distribution system improvement projects, internal and external electrification of multi-storeyed utility buildings & commercial complexes and township electrification.
Property Development— Company has acquired properties for the construction and sale of independent houses, multi-storyed apartments and commercial complexes. The initial ventures have been undertaken in Bangalore/Mysore. Residential flats in JP Nagar, Bangalore; residential apartments at Mysore; Nagarjuna Elysses, deluxe apartments coming up in Richards Town, Bangalore; Nagarjuna Gardens, Sahakarnagar; Nagarjuna Spectrum, at Indiranagar, Bangalore; Nagarjuna Green Ridge at HSR layout, Nagarjuna Maple Heights at Marthahalli Bangalore, Nagarjuna Green Woods at Marathahalli Bangalore, Nagarjuna Pearl Bay at Kochi, Bangalore speak of NCC's determined efforts to excel in this area of construction.
Irrigation & Hydropower— with good presence in various sectors of the construction industry and looking to the emerging opportunities the company is working on various water supply and power plants projects around the country.
Recent developments—
In July 2009, Company has obtained three new orders aggregating Rs 7.76 billion. The first order valued at Rs 6 billion is secured from Employees State Insurance Corporation, New Delhi for construction of medical college and related works at Mandi, Himachal Pradesh to be completed over a period of 24 months. The second order is from general manager, Mezgon Dock, Mumbai for Mazdock Modernization Project works in Mumbai valued at Rs 1.36 billion to be completed over a period of 28 months and the third is from National Institute of Technology, Assam for construction of 500 capacity boy’s hostel valued at Rs 400 million to be completed over a period of 16 months.
In September 2009, Company has bagged two new orders aggregating Rs 4.81 billion. The first order valued at Rs 4.49 billion is obtained from Water Resource Department, Bihar for execution of restoration of Eastern Gandak Canal system to be completed over a period of 25 months. Meanwhile, the second order is from MRF, Chennai for construction of proposed radial tyre plant and easy tyre plant in Andhra Pradesh valued at Rs 320 million to be completed over a period of 6 months.
In Nov 2009, Company has secured five orders aggregating Rs 7.22 billion. The first order is valued at Rs 3.28 billion from Water Supply & Sewerage Board, Bangalore for water supply and sewerage project at West Bangalore to be completed over a period of 26 months. The second is order from Water Resources Department, Bihar for construction of Bituminous Road worth Rs 1.43 billion to be completed over a period of 24 months. The third, fourth and fifth orders are worth Rs 1 billion, Rs 910 million and Rs 600 million respectively.
Valuation—
At current market price, stock is trading at 19.57 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy “Nagarjuna Construction Company Ltd” with medium to long-term investment horizon.
Source: Internet (Valuenotes by Abhishek Jain)
