NBCC (India) Limited, a prominent state-owned construction firm, has seen its share price reach new heights following the announcement of a potential bonus share issuance. The company’s stock surged by 18% in intraday trading today, hitting a record ₹209.75 per share. This spike in NBCC share price reflects growing investor enthusiasm and confidence in the company’s future prospects.
Key Developments Driving NBCC Share Price
The impressive rise in NBCC share price comes on the heels of the company’s announcement that its Board of Directors will meet on August 31, 2024, to discuss and possibly approve a bonus share issuance. According to a regulatory filing with the Bombay Stock Exchange (BSE), the board will consider issuing bonus shares in a ratio deemed appropriate, subject to shareholder approval.
If approved, this would mark NBCC’s second bonus share issuance. The first issuance occurred in 2017 at a 1:2 ratio, highlighting the company’s history of rewarding its shareholders.
Performance Highlights
NBCC’s share price has seen a phenomenal increase this year, rising by 151% from ₹82 to ₹206. This surge has positioned NBCC as a top pick among investors, driven by the company’s robust order book and project wins.
In August, NBCC’s subsidiary HSCC (India) secured a significant contract worth ₹5.28 billion from the Directorate of Medical Education & Research, Haryana. The company also won two additional contracts totaling ₹720 crore for projects including a new chapter building for the Institute of Company Secretaries of India and land development for the Jhansi Development Authority.
Furthermore, a major ₹15,000 crore contract awarded by the Srinagar Development Authority for a satellite township project in Srinagar has further boosted investor confidence, positively impacting the NBCC share price.
Financial Performance
The company’s financial performance for Q1 FY25 reflects its growth trajectory. NBCC reported a 39% increase in net profit, reaching ₹107 crore, up from ₹77 crore year-over-year. Income from operations rose to ₹2,144 crore, although revenues saw a sequential decline of 48%.
Company Background
Established in 1960 as a construction arm of the Government of India, NBCC earned ‘Navratna’ status in 2014. The company operates across project management consultancy, real estate development, and EPC contracting. Its diverse portfolio includes residential and commercial projects, as well as new ventures into infrastructure sectors like roads, highways, and railways.
In FY24, NBCC also entered the agri-infrastructure sector with a significant project for grain storage, valued at approximately ₹1,500 crore.
Disclaimer
This article is for informational purposes only and should not be considered as financial advice or a recommendation to buy or sell NBCC shares. The information provided is based on current market conditions and company announcements and is subject to change. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. The author and publisher of this article do not assume any responsibility for any financial losses incurred as a result of the use of this information.