NCC Limited Q3 FY26 Earnings Call Summary

Summary

NCC Limited - Q3 FY 2026 Earnings Call Summary Friday, February 06, 2026, 11:00 AM IST

Event Participants

Executives 3 Neerad Sharma (Head Strategy and Investor Relations), R.S. Raju (Director of Projects), Sanjay Pusarla (CFO)

Analysts 11 Abhishek Maheshwari (SkyRidge Fund Managers), Aditya Sahu (HDFC Securities), Ashish Shah (HDFC Mutual Funds), Balasubramanian (Arihant Capital), Bharat (MC Pro Research), Darshil Jhaveri (Crown Capital), Karan Gupta (CAVI Capital), Krish (Anand Rathi), Parvez Qazi (Nuvama Group), Parikshit Kandpal (HDFC Securities), Shravan Shah (Dolat Capital)

Financials & KPIs

Geographic & Segment Commentary

• Buildings: Remains the largest segment at 31% of the order book but saw a 14% degrowth in 9M performance. Management noted that Building segment metrics are partially impacted by JJM-related infrastructure components.
• Water & JJM: Significant execution drag due to payment delays in Uttar Pradesh. Receivables for UP JJM stood at ~₹1,200 crores after a ₹560 crore recovery in January; total JJM/Water receivables across states are ~₹3,700 crores.
• Mining: Accounting for 13% of orders, the segment is ramping up with a new ₹6,800 crore MDO project at Amrapali, Jharkhand. Full-scale operations for this 7-year contract are expected to commence by March 2026.
• Electrical & Smart Meters: Electrical T&D comprises 18% of the order book. Company has invested ₹377 crores in smart meter projects to date, with another ₹120 crores planned for FY27.

Company-Specific & Strategic Commentary

• JJM Recovery: Management expects a recovery in execution following a ₹17,000 crore revised estimate allocation by the Center for the current year and a ₹67,670 crore budget for next year (Sanjay Pusarla).
• Subsidiary Merger: The merger of NCCIHL with NCC Limited was completed, leading to a consolidation of accounts. While it had no impact on P&L or debt, it resulted in a ₹270-330 crore reduction in overall balance sheet size due to asset fair valuation (Sanjay Pusarla).
• Project Mobilization: Large signature projects, including the Mumbai Coastal Road and various tunnel projects, have completed mobilization. TBM equipment is at the site, and revenue contribution is expected to start from Q4 FY26 (Neerad Sharma).

Guidance & Outlook

Risks & Constraints

Q&A Highlights

JJM Receivables & Execution

• Question: What is the current status of JJM UP receivables and execution? (Parikshit Kandpal)
• Answer: Receivables in UP dropped to ₹1,200 crores after receiving ₹560 crores in January. Total JJM/Water receivables are ₹3,700 crores. Execution in Q3 was minimal (₹82 crores) but is expected to ramp up following new budget allocations (Sanjay Pusarla).

Debt Spike

• Question: Why did debt increase by nearly ₹1,000 crores despite low execution? (Parikshit Kandpal)
• Answer: Primarily due to capex for Mining/TBM, investments in smart meter SPVs (₹377 crores total), and the fact that JJM recoveries only started in January 2026 (Sanjay Pusarla).

Unbilled Revenue Conversion

• Question: Will the high unbilled revenue (₹7,500 crores+) convert in Q4? (Abhishek Maheshwari)
• Answer: Yes. Now that payments are being released, clients are certifying bills. This will convert unbilled revenue into realized revenue and improve working capital in Q4 (Sanjay Pusarla).

Vizag Receivables

• Question: What is the status of the ₹391 crore Vizag Urban receivable? (Karan Gupta)
• Answer: An agreement is in place for a ₹120 crore recovery in the current quarter (Q4 FY26) (Sanjay Pusarla).

Key Takeaway

NCC Limited reported a challenging third quarter with consolidated revenue declining 9% YoY to ₹4,900 crores, primarily due to payment and execution bottlenecks in the Jal Jeevan Mission (JJM) and Building segments. Despite these headwinds, the order book grew to a robust ₹79,571 crores, providing long-term visibility. The quarter saw a sharp spike in gross debt to ₹2,980 crores, driven by strategic capex for mining and tunnel projects. Management has formally withdrawn FY26 revenue guidance but remains optimistic for Q4 FY26, citing the receipt of ₹560 crores in JJM dues in January and the mobilization of high-value TBM projects. While working capital remains stretched at 119 days, the conversion of unbilled revenue (₹7,129 crores) and further recoveries from UP JJM are expected to deleverage the balance sheet to ₹2,400 crores by year-end. Investors should closely monitor the pace of government certifications and the scale-up of the new ₹6,800 crore Amrapali mining project into FY27.