PSU stock in focus after signing ₹45 Cr MoU with Madhya Pradesh Gramin Bank

Synopsis:
NBCC (India) Ltd signed an MoU with Madhya Pradesh Gramin Bank for the development of an institutional campus in Indore valued at Rs. 45.30 crore. The project includes a head office, training Centre with hostel facilities, and executive quarters. The stock rose 0.85 percent intraday following the announcement, reflecting investor confidence in NBCC’s focus on Tier-II infrastructure development.

A construction stock edged higher in early trade after announcing a new institutional order, signaling investor optimism around order book expansion and infrastructure push in Tier-II cities. 

The stock in focus is NBCC (India) Ltd. It opened at Rs. 108.20 compared to the previous close of Rs. 108.18, and touched an intraday high of Rs. 109.10, marking a marginal rise of 0.85 percent. The company currently holds a market capitalization of Rs. 29,273 crore.

What’s the News?

NBCC (India) Ltd has entered into a Memorandum of Understanding (MoU) with Madhya Pradesh Gramin Bank (MPGB) to undertake the development of a modern institutional campus in Indore.

Valued at approximately Rs. 45.30 crore (excluding GST). The scope of work includes constructing MPGB’s Head Office, a Training Centre with hostel facilities, and Executive Quarters.

The initiative forms part of NBCC’s regular operations and aligns with its strategic focus on enhancing institutional infrastructure in Tier-II cities. The collaboration also reflects a shared vision to bolster financial inclusion and administrative development in rural and semi-urban India. It is positioned as a catalyst for regional infrastructure growth.

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Financial Snapshot

As of FY25, NBCC maintained a debt-free balance sheet with a debt-to-equity ratio of 0 and cash equivalents of Rs. 5,716 crore. The company generated net cash flows of Rs. 961 crore. On return ratios, NBCC reported a healthy ROCE of 33.5 percent, ROE of 25.9 percent, and ROA of 4.75 percent.

The company’s 5-year compounded profit growth stood at an impressive 51 percent. Despite trading at a P/E of 48.1, the stock appears expensive compared to the industry average P/E of 23.4.

About the Company

NBCC (India) Limited is a Navratna CPSE under the Ministry of Housing and Urban Affairs. It operates across three key verticals: Project Management Consultancy (PMC), Engineering Procurement & Construction (EPC), and Real Estate. The company is a key player in executing government and public infrastructure projects, with a strong pan-India presence.

As of the June 2025 quarter, LIC held a 5.11 percent stake in the company, while Quant Mutual Fund acquired a fresh 1.61 percent holding, indicating growing institutional interest.

Written By Manan Gangwar

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