NCL Build Tech / NCL Alltek and Seccolor Limited
About the Company: Incorporated in 1996, NCL ALLTEK & SECCOLOR LIMITED is a part of the NCL Group which has 3 decades of experience in providing alternative and innovative building materials. The company operates through 11 manufacturing units located at Rajasthan, Pune, Telengana, Andhra Pradesh, Tamil Nadu, Vijaywada and Trichirapalli, while the head office is located at Hyderabad. The company is now getting renamed as NCL Buildtech. The company operates in few categories namely paints, plasters, windows and door frames and fly ashes.
Major Clients: Some of the major clients of the company include Gujarat State Petroleum Corporation, L&T Techno Park, Government Hospitals, Airport Authority of India (Delhi), Indira Gandhi International Airport, State Bank Academy, Zydus Cadila, NCC, Railway department (Vijayawada), IIM Infra Ltd and more.
Shareholding Pattern: Promoters own 68.52% of the company. It’s a positive sign showing the skin in the game of the promoters.
Company’s strengths: NCL Alltek & Seccolor has 3 global technology collaborations i.e. ICP (Sweden), Industrie Secco S.P.A (Italy) and Adopen Plastics Inc. (Turkey). Additionally, NCL Alltek is the sole licensee in India for ICP plasters.
Hidden Value: The Company holds 3.43% direct stake in its associate listed company NCL Industries Ltd which is engaged in business of Cement & Cement Products. (BSE Code- NCLIND/ 502168).
Financial Performance:
The revenue has grown at a CAGR of 28.55% over the past 3 years from 2016 to 2019 (FY19 Revenue is 372 crs). This is a commendable performance considering the gradual slowing of the real estate sector. The EPS growth (excluding exceptional items) has been solid at 31.2% CAGR (FY19 EPS is 53.03).
As of FY19, the company is moderately leveraged with a Total debt to equity ratio of 0.59x. EBITDA margin of the company has remained stable near 15% over the past 4 years demonstrating strong business profile.
Quick snapshot is given below: (figures are in Rs. lakhs)
| 2016 | 2017 | 2018 | 2019 | |
| Revenue from Operations (Net) | 17533.46 | 29981.76 | 25827.69 | 37245.5 |
| Other Income | 286.66 | 135.82 | 69.85 | 139.11 |
| Total income | 17820.12 | 30117.58 | 25897.54 | 37384.61 |
| Growth % | 69% | -14% | 44% | |
| Cost of Materials Consumed | 8003.66 | 15115.96 | 13264.19 | 20992.99 |
| Growth % | 89% | -12% | 58% | |
| Changes in inventories of | 70.28 | -396.43 | -109.73 | -47.91 |
| Employee Benefits Expenses | 2110.44 | 3636.81 | 2822.34 | 3676.99 |
| Finance Costs | 463.92 | 1095.34 | 583.53 | 729.65 |
| Depreciation and Amortisation Expenses | 221.56 | 530.45 | 428.82 | 523.67 |
| Other expenses | 5016.16 | 7683.551 | 6056.963 | 6816.627 |
| Total Expenses | 15886.02 | 27666.57 | 23045.99 | 32692.6 |
| Growth % | 74% | -17% | 42% | |
| Profit before Exceptional | 1934.1 | 2451.01 | 2851.55 | 4692.01 |
| Growth % | 27% | 16% | 65% | |
| Exceptional profits | 122.27 | 160.34 | 3879.5 | 125.18 |
| PBT | 2056.37 | 2611.35 | 6731.05 | 4817.19 |
| Tax | 874.34 | 817.91 | 1640.6 | 1721.25 |
| PAT | 1182.03 | 1793.44 | 5090.45 | 3095.94 |
| EPS with exceptional items | 25.6 | 31 | 90.39 | 54.78 |
| EPS without exceptional items | 23.49 | 28.23 | 33.2 | 53.03 |
| Growth % | 20% | 18% | 60% |
Future Prospects: Future growth prospects remain bright considering the foray of company into affordable housing projects and its new Nellore plant shall help the company expand its production capacity, adding to the top line by roughly 120 crores once the plant becomes fully operational. India Paints & Coatings market is expected to cross US$7 bn by 2023, growing at a CAGR of more than 12.87% during 2018-23. The demand of these products globally is expected to increase owing to growth of applications from end-use industries, architecture segment, regional demand, changing consumer preference for bio based products and technological advancements. Planned development of nearly 100 smart cities across India has been projected to provide significant thrust to the UPVC segment in the coming years.
For detailed financial performance and reviewing the annual report, kindly click here.