On October 7, shares of NBCC (India) Ltd saw a significant 4% jump as the stock traded ex-bonus. This boost came in the wake of the company's announcement of a 1:2 bonus issue, granting one fully paid equity share for every two existing shares held by investors. With a massive issue of 90 crore bonus shares out of free reserves, NBCC has further strengthened its position in the market, capitalising on a balance of ₹ 1,959 crore as of March 31, 2024.
Strong performance compared to Nifty
Over the past 12 months, NBCC has more than doubled its investors' capital, delivering an impressive 103% return compared to Nifty's 28% growth in the same period. In fact, this year alone, the stock has surged by 43%, outperforming Nifty's 15% gains. For those considering share market investment, NBCC's performance clearly stands out as it continues to attract attention due to its robust financial health and growth prospects.
NBCC's growth drivers
Nuvama remains bullish on the PSU stock, crediting its strong order book, valued at ₹ 81,300 crore, and a solid book-to-bill ratio of 7.6x. So far, in 2024, NBCC has secured new orders worth ₹ 19,800 crore, with expectations of more as the year progresses. An improvement in order intake, execution, and real estate monetisation also bodes well for the company's future performance. NBCC's position in the share market remains strong, making it an appealing option for share market investment enthusiasts who are looking for stable yet rewarding opportunities.
Moreover, NBCC stands to benefit from the ongoing buoyant real estate cycle, with many PSUs and government bodies looking to monetise surplus land holdings. This not only adds value to NBCC's already impressive portfolio but also solidifies its place as a leader in the real estate and construction sector, further attracting share market investment.
Key takeaways
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