For investors, a company’s order book is a clear indicator of its future revenue potential. Especially when the order books more than the market cap, it signals strong growth prospects. This article describe five such stocks, particularly in sectors like infrastructure, defense, and heavy engineering, where long-term projects are common.
NBCC (India)
NBCC (India) is a government-owned company specializing in Project Management Consultancy (PMC), Engineering Procurement and Construction (EPC), and Real Estate Segmentation.
- Order Book: ₹844 billion
- NBCC: ₹704 billion
- Subsidiaries (HSCC, HSCL, NSL): ₹80 billion, ₹58 billion, ₹2 billion respectively
- Market Cap: ₹258.4 billion (69% lower than order book)
- Financial Performance: ₹24.6 billion revenue in Q2 FY25 (19% annual growth)
- Operating Profit: ₹1 billion (margin: 4%)
- Net Profit: ₹1.7 billion (net margin: 5.1%)
- Future Strategy: Targeting ₹1 trillion order book and ₹130 billion annual revenue by FY25 end.
NCC Ltd.
NCC Ltd., formerly known as Nagarjuna Construction Company, is a leading construction and infrastructure company in India.
- Order Book: ₹523.7 billion
- Building: 37%
- Transportation: 21%
- Water & Railways: 12%
- Others: 21%
- Market Cap: ₹180.2 billion (66% lower than order book)
- Financial Performance: ₹51.9 billion revenue in Q2 FY25 (10.1% growth)
- Operating Profit: ₹4.4 billion (margin: 9%)
- Net Profit: ₹1.8 billion (net margin: 3.4%)
- Future Strategy: Targeting ₹200-220 billion order book by FY25 end.
PNC Infratech
PNC Infratech is a leading infrastructure construction company in India, specializing in highways and expressways.
- Order Book: ₹199 billion
- Highways/Expressways: 65%
- Water, Canal, Railways: 35%
- Market Cap: ₹80 billion (60% lower than order book)
- Financial Performance: ₹14.3 billion revenue in Q2 FY25
- Operating Profit: ₹3.5 billion (margin: 25%)
- Net Profit: ₹830 million (net margin: 5.8%)
- Future Strategy: Benefiting from Bharatmala Pariyojana and other government infrastructure projects.
ITD Cementation
ITD Cementation is a major construction company specializing in marine structures, highways, bridges, flyovers, and airports.
- Order Book: ₹179.8 billion
- Over 50% from order maintenance and urban infrastructure
- Market Cap: ₹87.6 billion (52% lower than order book)
- Financial Performance: ₹19.9 billion revenue in Q2 FY25 (24% annual growth)
- Operating Profit: ₹1.8 billion (margin: 9%)
- Net Profit: ₹720 million (net margin: 3.6%)
- Future Strategy: Targeting ₹100 billion new orders by FY25 end.
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J Kumar Infraprojects
J Kumar Infraprojects specializes in various infrastructure projects like metros, flyovers, bridges, and roads.
- Order Book: ₹187.2 billion
- Flyovers, Roads, and Tunnels: 60%
- Metro and Urban Infrastructure: 40%
- Market Cap: ₹56.9 billion (70% lower than order book)
- Financial Performance: ₹12.9 billion revenue in Q2 FY25
- Operating Profit: ₹1.9 billion (margin: 15%)
- Net Profit: ₹900 million (net margin: 7%)
- Future Strategy: Targeting 15% revenue growth and ₹80 billion new orders by FY25 end.
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Conclusion
Stocks with order books larger than their market cap often indicate strong future growth potential. However, investors should not rely solely on order book size. Factors like company fundamentals, project execution capability, and management quality are also crucial for good returns. For better results, investors should conduct thorough research and adopt the right strategy.