₹79,571 Cr Order Book: Why is NCC Stock Down 60% Despite Strong Orders

Synopsis: NCC holds a record Rs 79,571 crore order book, yet the stock is down nearly 60% from its peak. What’s driving the sharp correction despite strong project wins? Here’s what investors are missing.

NCC Ltd has a massive order book of Rs 79,571 crore, and yet, the stock has fallen nearly 60 percent, dropping from its peak. The company continues to secure new projects, the backlog remains strong, and orders keep flowing in. So what’s happening? It appears the market isn’t just focusing on the headline figures. Investors seem to be concerned about something deeper.

With a market capitalisation of Rs 9,832 crore, the shares of NCC Ltd are currently trading at Rs 156.60 per share, donw 0.03 percent from its previous day’s closing price of Rs 156.65 per share. Over the past five years, the stock has delivered a return of 86 percent, outperforming NIFTY 50’s return of 70 percent.

Reasons behind the fall

NCC stock reached a high of Rs 364.50 per share and is now trading at Rs 156.65. This represents a significant drop of nearly 60 percent from its peak. The first reason for this decline is weak performance. Even with a large order book of Rs 79,571 crore, which grew by 43 percent YoY, NCC’s stock has fallen because markets care about execution and profitability, not just order inflows. In Q3 FY26, the company reported a 34 percent YoY drop in net profit and a 9 percent decline in revenue.

This raised concerns about the company’s ability to turn its strong order pipeline into actual revenue and earnings, which reflects nearly 3.6x of its FY25 revenue (order book). An order book provides visibility, but if projects are delayed or margins decline, investors start to worry about short-term growth.

A major factor in the decline was management’s decision to withdraw revenue and margin guidance for the latter half of FY26. When a company stops offering future predictions, it creates uncertainty. NCC pointed to ongoing monsoon disruptions, delays in project approvals, and extended payment cycles, especially in Jal Jeevan Mission projects. These problems directly affect working capital and cash flow. Infrastructure businesses rely heavily on timely billing and collections, so delays can quickly reduce profitability, even if orders stay strong.

Another issue is margin pressure and rising finance costs. While EBITDA margins improved slightly to around 9 percent, net profit margins fell due to an 18 percent increase in interest expenses and a significant drop in standalone profitability. This suggests that even though the company is winning projects, its cost structure and financing burden are hurting profitability. Investors are concerned that higher working capital needs and delayed payments could keep hurting earnings.

However, the company has retained its order inflow target of Rs 22,000 to Rs 25,000 crore for FY26 and has already secured Rs 22,311 crore in new orders in 2025, including Rs 12,430 crore in Q3 alone. However, despite these wins, its PAT margin decreased from 3.85 percent to 2.78 percent, while interest costs rose by 18.56 percent. Therefore, the company is making less profit from its work.

Financials Highlights

The revenue from operations for NCC stands at Rs 4,868 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 5,345 crores, down by 9 per cent YoY. However, on a QoQ basis, it reported a slight growth of 7 percent from Rs 4,543 crore. 

Coming to its sales mix, the company derived Rs 4,827 crore of its revenue from the construction segment, which declined by 9 percent YoY in Q3 FY26, followed by the remaining Rs 41.71 crore from the real estate segment, which declined by a staggering 29 percent YoY in the same period.

Also, EBITDA stood at Rs 436 crore in Q3 FY26, a slight decline of 1 percent as compared to Rs 441 crore in Q3 FY25. However, on a QoQ basis, it reported a growth of 11 percent from Rs 393 crore. Also, coming to the margins front, EBITDA margins increased slightly by 100 bps YoY, reaching 9 percent in Q3 FY26.

Coming down to its profitability, the company’s net profit stood at Rs 135 crore in Q3 FY26, a sharp decline of 34 percent as compared to Rs 206 crore in Q3 FY25. Additionally, on a QoQ basis, it reported a decline of 19 percent from Rs 167 crore. 

Finally, sentiment has been cautious because the company is at a transition point. While the infrastructure sector as a whole benefits from strong government spending and broader economic support, NCC needs to prove that it can turn its Rs 79,571 crore order book into stable revenue growth and sustainable profits. Until it shows better execution, improved cash flow management, and clearer guidance, the stock may continue to struggle despite its strong backlog.

The Indian infrastructure and construction sector is set for strong growth, expected to increase by over 11 percent YoY in 2025, reaching around Rs 5.31 lakh crore. This growth is driven by significant government capital expenditure, the National Infrastructure Pipeline, and increasing foreign direct investment. The Union Budget 2026-27 focuses on infrastructure with a Rs 12.2 lakh crore allocation, boosting this positive outlook.

For NCC’s stock to recover significantly, the company must demonstrate consistent revenue growth, stable margins, and improved cash flow from its Rs 79,571 crore order book. In short, NCC has the work available, but the market wants evidence that this work can produce steady profits. Until that occurs, the stock may remain under pressure despite a healthy backlog.

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