Should You Keep or Sell Shares of NBCC? A Comprehensive Guide

Introduction

The National Building Construction Corporation Limited (NBCC) is a profitable public sector company operating in the Project Management Consultancy Engineering Procurement Construction (EPC) and Real Estate sectors. With substantial government spending in these areas and early signs of recovery in the real estate market, investors are considering whether to keep or sell their shares of NBCC.

In this article, we will explore the current performance, technical indicators, and investment outlook for NBCC, providing guidance on whether to hold or sell your shares.

Current Performance and Market Outlook

NBCC has demonstrated strong performance over the past few years. It operates in three major segments:

Project Management Consultancy Engineering Procurement Construction (EPC) Real Estate

Government spending on infrastructure and the early signs of a real estate recovery create a favorable market environment. The technical chart indicates significant buying interest in the stock, with a solid base at around the 30 level, and potential for further growth towards the 60 level in the coming months.

Investment Insights and Strategies

Short-term Investment Strategy:
Currently, the stock is trading near 42 (as of 6 December 2022). Given the potential for further growth, holding onto the shares until it reaches 60 or higher is a feasible option. However, if the price breaks 100, a sell-off may be more advisable, given the strong earnings and dividend potential.

Long-term Investment Strategy:
For a longer-term investment horizon, you might consider holding the shares. NBCC is a good company in the construction segment with a significant order book and a history of dividend payments. However, it is currently trading around 90, having been in a consolidation zone between 70 and 85. A breakout above the 52-week high of 96 could signal further upward movement.

Government Work and Post-Ukraine War Impact:
Given the ongoing Ukraine War, NBCC may see a boost in work related to rebuilding infrastructure, especially after the conflict ends. This could enhance long-term prospects for the company.

Conclusion and Final Thoughts

To summarize, the decision to keep or sell your NBCC shares depends on your investment horizon and risk tolerance. In the short term, holding the stock until it reaches around 100 or above (when it breaks 52-week highs) might be more advantageous. For long-term investors, the stable earnings, high order book, and dividend payments make it a worthwhile investment, although there is also potential for higher returns.

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