“All’s well that ends well”, but the end of the May month did not remain well for NCC as just a few hours after Jagan Mohan Reddy took control as a CM of Andhra Pradesh, NCC’s stock has started losing its market capital with the falling price of nearly 17% intraday.
The reason supporting this was certain reports indicates that the new government has decided to cancel all the works allotted before 1st April 2019 which has not commenced yet. If this is happening then NCC may lose orders worth Rs 6,100 crore.
On this note the company’s management revert, that company has not received communication from the new government yet, even though these orders are canceled company has a strong order book for FY 2019 -20 worth Rs 35,000 crore excluding complicated orders of Rs 6,100 crore.
But amid all, sentiment about stock has gone to the negative side sharply with big volume that gives it a giant fall of around 17%. On NSE stock has made high of 109 in the morning but after that, it went down up to 95.20 and closed at 97.75 intraday.
Now let’s throw some light on supporting arguments and opposing arguments of NCC:-
Supporting – 1) NCC has post consistent good quarterly results.
2) Edelweiss, Kotak Sec, HDFC Sec., ICICI direct has recommended for the target of 142-170.
3) Big bull and his wife has nearly 9.4% stake in NCC.
4) FII holdings have increased in the last quarter.
Opposing – 1) Pledged shareholding has increased in 1 year from 32.45% to 42.72%
2) MF Holdings have decreased last year.
Note – This blog is for education purposes only, kindly take advice from your financial advisor before taking any decision.