PSU Stocks with Order Books Higher Than Market Cap to Watch in 2024
PSU Stocks : Public Sector Undertakings (PSUs) play a crucial role in India’s economic growth, with government-backed operations across various sectors such as infrastructure, energy, and defense. One of the key indicators of a PSU’s future growth potential is its order book—a measure of secured projects that provide revenue visibility. When a company’s order book is significantly larger than its market capitalization, it suggests strong earnings potential and undervaluation by the market.
Here, we highlight three PSU stocks—NBCC Ltd, NCC Ltd, and IRCON International Ltd—that have order books exceeding their market capitalization, making them compelling investment opportunities.
1. NBCC Ltd: A Giant in Construction & Project Management
NBCC Ltd, a Navratna enterprise under the Ministry of Housing and Urban Affairs, specializes in Project Management Consultancy (PMC), Real Estate Development, and Engineering Procurement & Construction (EPC). With a massive order book of ₹1 lakh crore, NBCC is set for substantial future growth.
Key Highlights:
- Market Cap: ₹21,856.50 Crores
- Current Share Price: ₹80.95
- 3-Year Return: +228%
- 5-Year Return: +410%
- Order Book vs Market Cap: 4.6 times
Recent Developments:
- In Q3FY25, NBCC secured new projects worth ₹405 crores, pushing its total consolidated order book beyond ₹1 lakh crore.
- The company is actively involved in government-driven projects such as smart city developments, redevelopment of government colonies, and large-scale infrastructure projects.
2. NCC Ltd: A Leader in Infrastructure Development
NCC Ltd, a Public Sector Undertaking (PSU) in construction and infrastructure development, operates across segments like housing, roads, bridges, industrial projects, and power transmission. With a robust order book of ₹55,548 crores, NCC stands out as a strong performer in the sector.
Key Highlights:
- Market Cap: ₹11,590.05 Crores
- Current Share Price: ₹184.6
- 3-Year Return: +210%
- 5-Year Return: +477%
- Order Book vs Market Cap: 4.8 times
Recent Developments:
- The company received new orders worth ₹8,440 crores in Q3FY25, strengthening its revenue pipeline.
- Strong order inflows from government-backed infrastructure projects make NCC a promising bet for investors looking for long-term growth.
3. IRCON International Ltd: A Key Player in Railways & Highways
IRCON International Ltd, a Navratna PSU, is a leading engineering and construction company specializing in railway infrastructure, highways, bridges, tunnels, metro projects, and electrical & mechanical works. With a diverse order book of ₹21,939 crores, IRCON has a steady revenue pipeline for the coming years.
Key Highlights:
- Market Cap: ₹14,286.43 Crores
- Current Share Price: ₹151.9
- 3-Year Return: +279%
- 5-Year Return: +257%
- Order Book vs Market Cap: 1.54 times
Order Book Breakdown:
- Railway Projects: ₹17,075 crores
- Highway Projects: ₹4,775 crores
- Other Orders: ₹89 crores
Recent Developments:
- The company has bagged multiple contracts from Indian Railways, National Highways Authority of India (NHAI), and international infrastructure projects.
- IRCON’s dominance in railway and highway projects makes it a stable and high-growth investment option.
Comparing Financials of NBCC, NCC, and IRCON
| Company | Market Cap (₹ Cr) | Order Book (₹ Cr) | Order Book vs Market Cap | 3-Year Return | 5-Year Return |
|---|---|---|---|---|---|
| NBCC Ltd | 21,856.50 | 1,00,000 | 4.6x | +228% | +410% |
| NCC Ltd | 11,590.05 | 55,548 | 4.8x | +210% | +477% |
| IRCON Intl. | 14,286.43 | 21,939 | 1.54x | +279% | +257% |
Why These Stocks Are Worth Watching?
- Strong Order Books Indicate Future Growth: The massive backlog of secured orders ensures a steady revenue flow, reducing risks related to demand fluctuations.
- Government-Backed Projects Provide Stability: Being PSUs, these companies benefit from government contracts and infrastructure projects, ensuring long-term business visibility.
- High Returns for Investors: With triple-digit gains in the past 3-5 years, these stocks have already rewarded investors and still have room for growth.
- Undervalued Compared to Order Books: Each of these stocks has an order book several times larger than its market cap, making them undervalued based on future earnings potential.
Final Thoughts
The PSU sector continues to be a goldmine for investors, with companies like NBCC, NCC, and IRCON showing tremendous growth potential due to their high-order books and government-backed projects. Investors looking for stable, long-term gains should keep an eye on these stocks, as they are well-positioned to benefit from India’s infrastructure expansion and economic growth.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.