NCC : Transcript of the conference call held on May 29, 2023

Ref. No.: NCCL/ Regulation 30/2023

Date : June 02, 2023

National Stock Exchange of India Ltd	BSE Limited
Exchange Plaza, C-1, Block G	Phiroze Jeejeebhoy Towers
Bandra - Kurla Complex	Dalal Street,
Bandra (E)	Fort
MUMBAI - 400 051.	M U M B A I - 400 001.
Symbol: NCC	Code: 500294

Dear Sir(s),

Sub: Submission of Transcript of the conference call under Regulation 30&46 of the SEBI (LODR) Regulations, 2015

Please find enclosed herewith the transcript of the earnings conference call that took place virtually on May 29, 2023 with analysts discussing the performance & financial results of Q4& Financial year ended March 31,2023. The transcript is also available on the Company's website at https://ncclimited.com/analyst-column.html

The Transcript includes list of management attendees and the Q&A's, any assents/dissents and open points.

Please note that no unpublished price sensitive information was shared/discussed in the earnings call.

Kindly take the above information on record.

Thanking you,

Yours faithfully

For NCC LIMITED.

M V Srinivasa Murthy

Company Secretary & Sr.EVP (Legal)

Encl : As above

NCC Limited

(Formerly Nagarjuna Construction company Limited) CIL: L72200TG1990PLC011146

NCC House, Madhapur, Hyderabad 500 081 T [phone] F [phone] ncclimited.com

"NCC Limited

Q4 FY '23 Earnings Conference Call"

May 29, 2023

MANAGEMENT: SHRI. R.S. RAJU - DIRECTOR PROJECTS - NCC LIMITED

SHRI. SANJAY PUSARLA - EXECUTIVE VICE

PRESIDENT, FINANCE AND ACCOUNTS - NCC LIMITED SHRI. K KRISHNA RAO - EXECUTIVE VICE

PRESIDENT, FINANCE AND ACCOUNTS - NCC LIMITED SHRI. P. V. VIJAY KUMAR - VICE PRESIDENT, FINANCE - NCC LIMITED

SHRI. NEERAD SHARMA - HEAD, STRATEGY AND

INVESTOR RELATIONS - NCC LIMITED SHRI. M. SRINIVASA RAO - CHIEF GENERAL

MANAGER, FINANCE AND ACCOUNTS - NCC LIMITED

SHRI. SMVSR RAJU - DEPUTY GENERAL MANAGER,

FINANCE AND ACCOUNTS - NCC LIMITED SHRI. P. SURENDER RAO - ASSISTANT GENERAL

MANAGER, FINANCE - NCC LIMITED

MODERATOR: MR. VAIBHAV SHAH - JM FINANCIAL

Moderator:Ladies and gentlemen, good day and welcome to the NCC Limited Q4 and FY'23 Earnings Conference Call hosted by JM Financial. As a reminder, all participant lines will be in the listen- only mode and there will be an opportunity for you to ask questions after the presentation

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May 29, 2023

concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Vaibhav Shah from JM Financial. Thank you and over to you, sir.

Vaibhav Shah:Yes, thanks, Faizan. On behalf of JM Financial Institution Securities, I welcome everyone to Q4 and FY'23 earnings conference call of NCC Limited. Today, we have from the management, Shri. R.S. Raju, our Director of Projects; Shri. A. Vishnu Varma, Director, Projects; Shri. Sanjay Pusarla, Executive Vice President, Finance and Accounts; Shri. K Krishna Rao, Executive Vice President, Finance and Accounts; Shri. P. V. Vijay Kumar, Vice President, Finance; Shri. Neerad Sharma, Head, Strategy & Investor Relations; Shri. M. Srinivasa Rao, Chief General Manager, Finance and Accounts; Shri. SMVSR Raju, Deputy General Manager, Finance and Accounts; and Shri. P. Surender Rao, Assistant General Manager, Finance.

We will begin with opening remarks from the management, after which we will have the Q&A session. Over to you, sir.

P.V. Vijay Kumar: Thank you, Vaibhav. Good afternoon everyone and welcome to NCC Q4 FY'23 earnings investors call. I thank you all for taking time to attend this. Before we start, I'll read out a small disclaimer and we shall go into the subject.

.

P.V. Vijay Kumar: So I may continue now. So the statements made here or in the presentations uploaded by the company are to our best of knowledge are true and any forward-looking statements are subject to certain factors beyond control of the Company Officials and Management, and hence the audience are advised to use their discretion in their own analysis accordingly.

Now we shall go into the performance of the company. For this Q4 into account. I'll briefly start with certain opening remarks followed by Q&A. Prior to announcing My colleagues who are present here, I am happy to introduce that Mr. Sanjay Pusarla, who has taken over as new CFO and he is also present here.

Sanjay Pusarla: Hi, everyone. This is Sanjay Pusarla.

P.V. Vijay Kumar: Now, let us start. Barely the pandemic preceded, the war in Ukraine broke out in February 2022. Price of food, fuel and fertilizer rose sharply. As inflation rates accelerated, central banks of advanced countries scrambled to respond the monetary policy tightening.

Many developing countries, particularly in the South Asian region, faced severe economic stress as a combination of weaker currencies, higher import prices and the rising cost of living and a strong dollar making debt servicing more expensive too much to handle.

In the second half of 2022, there was a spike for governments and households. Commodity prices peaked and then declined. In the near-term, the acute pressure was released, although the prices

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May 29, 2023

	of some commodities remain well-above their pre-pandemic levels. The capital expenditure
	program of the central government, which increased 63.4% in the first eight months of FY'23
	was another growth driver of the Indian economy in the current year, crowding in the private
	capex since the January-March quarter of 2022.
	Further, FY'23 we have seen RBI tightening its monetary policy increasing repo rate couple of
	times from 4% to 6.5%. I may share here that we have seen to the extent of average 8.5% to
	9.3% increase in the interest rates of the borrowings of the company. Anyway these forecasts
	including the advanced estimates released by NSO, now broadly lie in the range of 6.5% to 7%.
	Despite the downward region, the growth estimates for the FY'23 is higher than the almost all
	major economies even slightly above the average growth of the Indian economy in the decade
	leading up to the pandemic.
	IMF estimates India to be one of the top two fast-growing significant economies in 2022. Despite
	strong global headwinds, tight domestic monetary policy, India is still expected to grow between
	6.5% to 7%, and that too without a base effect. It is a reflection of India's underlying economic
	resilience and its ability to recoup, renew, and reenergize the growth diverse in the economy.
	While that is so, NCC is well-placed in terms of diversified execution capabilities. It has
	presently the orders on hand worth of INR50,244 crores, having accretion of INR25,895 crores
	of orders in FY 2023. I'm happy to share with you that this is the highest ever order book
	achieved by the company. Also, I'm sure you will appreciate that we touched INR13,503 crores
	of revenue on a standalone basis and INR15,701 crores on a console basis. This is growth of
	nearly 35%. Our console EPS stands at INR9.77, as against INR7.91 previous year. The numbers
	and details of the same are already furnished in the presentations uploaded in the website.
	Coming to the last part of my briefing, while my other colleagues will go into detailing of the
	numbers, I may share with you that we are set to encash opportunities in all the spaces we are
	present and have plans to enter into new segments like defense, railways, under the ground,
	tunneling, etc. Our management felt that we should be able to grow by 20% in FY 2024 with
	more or less same EBITDA margin and PAT margins going up by 50 basis.
	So with this conclusion with the opening remarks, I will now pass on to my colleague Mr. R.S.
	Raju, Director, to bring out salient features of financial performance to you. As I said, please
	consider the chance to others too and choose and limit your questions without repetitions.
R.S. Raju:	Hi, good afternoon to all of you. Thank you to my colleague, Mr. Vijay Kumar. He has already
	briefed about the macro environment around surrounding the construction industry. And all of
	you aware that the environment is not that much favorable to the companies, and we expect a
	positive environment going forward.
	Now we have uploaded the quarterly and yearly results to our company's website. And, thereby,
	we avoid the reading of the detailed numbers here to save the time, or otherwise to give more
	time to you for asking more questions and thereby answers.

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Company, already the pointed out by this, some of the analysts that the good results were given by the company. So I believe that the performance of the company this quarter and for the year is almost too high in all aspects.

So I want to touch the key highlights of the performance for the fourth quarter as well as for the year as a whole. The highest ever annual order inflow of INR25,895 crores for the year as a whole. Similarly the order book crosses INR50,000 crores mark first time ever. Now stands at INR50,244 crores and reported highest ever annual console revenue INR15,553 crores. Similarly, reported highest ever consolidated tax of INR609 crores.

The brought down debt, the debt level below INR1,000 crores mark, the lowest in the last one and a half decades, INR974 crores. It is almost the first time the value addition by the group companies to the bottom line by about INR40 crores, highest ever dividend 110% for the FY'23. The lowest trade receivables collection days in last five years is 87 days, then the lowest working capital days in the last five years is 107 days, and efficient conversion of order book into execution registering lower book-to-bill ratio of 2.98 times.

This is about some brief highlights of the performance of the company. And now going to the order book. In the year as a whole, the order book grown by 113%. Order book grown from INR39,361 crores to INR50,244 crores is the growth of the order book, about 28%. The order secured by the company excluding in the fourth quarter of the year about INR13,283 crores. It is also an ever higher in a particular quarter.

The average order book size, if you see, is also highest ever, about INR4,578 crores. So it gives that a strong book on hand with diversified portfolio and increased order value -- average order value. So we believe that it gives a good momentum going forward and to report good volume of revenues in the years to come.

The order book composition division-wise, the order book revenues division-wise are given in the website. So, thereby, the reading of the numbers division wise I am not giving. But if anyone requirement after seeing the website, just we will read out basing on the questions raised from the investors.

Now, operating performance if you take about the console level, the revenue reported for the fourth quarter is about INR4,981 crores as against INR3,492 crores, a 43% growth. Similarly, EBITDA reported 72% growth in the fourth quarter, INR465 crores against INR270 crores. PAT excluding exceptional items, if you take that one, it is reported INR217 crores against INR61 crores, about a growth of INR156 crores.

All of you know that last year in the fourth quarter, company reported an exceptional gain on the sale of the NCC Vizag Urban property. As a result, the exceptional item is more in the fourth quarter of the last year. If you consider that exceptional item in the fourth quarter, the net profit is INR242 crores against which current quarter is INR191 crores. If you compare that one, again, a negative growth is there. But once you exclude that one, there's a positive growth of about 200% or so.

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