NCL Industries Ltd Q2 FY26 – From Cement to Sentiment: Profit up 214%, but ROE still on vacation!
1. At a Glance
Welcome to NCL Industries Ltd — a company that’s been pouring, grinding, mixing, and hydrating since 1979. It makes cement, concrete, doors, and excuses for low ROE — all with equal precision. The current market cap hovers around ₹903 crore, the stock trades at ₹200, and it’s down roughly 9% over the past year — which means even cement bags have held their value better.
The Q2 FY26 results, though, gave investors a brief reason to smile: quarterly revenue stood at ₹345 crore, up 4.4% year-on-year, while net profit soared to ₹26.4 crore — a 214% YoY surge. That’s like a cement mixer suddenly turning into a money printer. The stock’s P/E stands at 16x, ROCE at 6.7%, and ROE at 3.4% — basically, returns softer than fresh mortar.
Dividend yield of 1.5% gives some comfort — like free water bottles at a construction site. But under the surface, the company’s story is far more layered than your average concrete slab.
2. Introduction
If you thought the cement business was boring, NCL Industries might just change your mind. It’s not just a cement company — it’s a one-stop shop for everything your contractor could possibly overcharge you for: cement, particle boards, ready-mix concrete, doors, and even hydropower. Basically, NCL builds houses, then supplies the doors to close them, and later sends you the bill powered by its own hydroelectric plant. Efficiency level: family-owned conglomerate in full form.
But beneath the surface, the company’s last few years have been a mixed bag. From peaking at over ₹2,000 crore in sales in FY23, revenue slipped to ₹1,408 crore in FY25. Profits too, went from ₹94 crore in FY24 to ₹50 crore in FY25 — a drop that would make even a poorly mixed RMC batch look stable.
Yet, the September 2025 quarter showed some fight. With ₹345 crore in sales and ₹26.4 crore in profit, NCL proved that not every mid-cap needs a miracle — sometimes, all it takes is a cement price hike and cost discipline.
Still, investors remain divided. One camp sees NCL as a “value pick” (read: cheap cement), while another sees it as a “value trap” (read: cheap for a reason). The truth, as usual, is somewhere between the kiln and the cash flow statement.
3. Business Model – WTF Do They Even Do?
Think of NCL Industries as the Swiggy of construction materials — except it delivers cement instead of biryani. The company operates across five divisions:
Cement – The flagship Nagarjuna Cement brand, with over 2.7 MTPA cement capacity, caters to South India’s booming infrastructure.
RMC (Ready-Mix Concrete) – Sold under the Nagarjuna RMC banner, with 10 operational units near major urban projects.
Bison Panels (CBPB) – The company’s claim to fame — India’s only manufacturer of Cement Bonded Particle Boards, made with German technology.
NCL Doors – Fancy, pre-made doors from Turkish collaboration. Fireproof, termite-proof, moisture-proof… except they can’t proof the share price.
Energy – Two hydropower projects generating 15.75 MW — enough to light up their factories and power a few investor presentations.
The company’s product diversity is impressive — it’s like Ambuja met IKEA and they had a kid named “Bison.” But the challenge? Managing such a mixed bag of businesses while keeping margins consistent.
In FY24, cement contributed 84.26% of revenue, boards 8.22%, RMC 5.78%, doors 1.68%, and energy a token 0.06%. Translation: Cement pays the bills; everything else adds decoration.
4. Financials Overview
Let’s break down the Q2 FY26 show — where NCL Industries decided to flex.
Metric
Latest Qtr (Sep 2025)
YoY Qtr (Sep 2024)
Prev Qtr (Jun 2025)
YoY %
QoQ %
Revenue (₹ Cr)
345
330
338
4.4%
2.1%
EBITDA (₹ Cr)
49
34
51
44%
-3.9%
PAT (₹ Cr)
26.4
8.4
20
214%
32%
EPS (₹)
4.36
1.39
4.47
214%
-2.5%
Commentary: That 214% jump in profit looks great on paper — but remember, the base was tiny. Revenue growth of 4.4% is modest, yet profit jumped due to margin recovery and lower input costs. EBITDA margins improved to ~14%, nearly triple of what they were a year ago when OPM had slipped to 5–6%. Cement prices firmed up, power costs cooled down, and clinker smiled again.
But let’s not get carried away — annualised EPS is roughly ₹17.4, making the P/E ~11.5x on a trailing basis. Not bad, but not Ambuja-level either.
5. Valuation Discussion – Fair Value Range (Educational Only)
If re-rated to 10x EBITDA → EV = ₹1,410 Cr → Equity Value ≈ ₹1,125 Cr → Implied Price: ~₹250
Method 3: Simplified DCF Assume free cash flow ~₹80 Cr growing 8% annually for 5 years, discount rate 12%. DCF Value ≈ ₹950–₹1,100 Cr → per-share range ₹190–₹220.
👉 Educational Fair Value Range: ₹180 – ₹230 per share
(This fair value range is for educational purposes only and not investment advice.)
6. What’s Cooking – News, Triggers, Drama
The most important headline came on 3rd November 2025: NCL commissioned its new 0.66 MTPA cement grinding unit at Thallapalem (Visakhapatnam), pushing total capacity from 3.3 to 4.0 MTPA. Translation: the company can now churn out 700,000 more tonnes of “Nagarjuna Visistha” and “Steel Krete” cement — fancy names for what is essentially grey powder that builds empires.
But the boardroom wasn’t quiet either. On 25th September 2025, long-serving Company Secretary T. Arun Kumar retired, and M. Divya Bharathi took charge. Hopefully, she brings better compliance luck — because just a month later, both BSE and NSE proposed fines of ₹3.39 lakh each for non-compliance under Regulation 17(1E). Cement is solid; governance, not so much.
Also, promoter group members made open and off-market share sales in November 2025 — reducing holding to 40.9%. Not a great look, especially when the pledged portion is still 14.8%. Maybe they’re freeing up funds for the next kiln.
7. Balance Sheet
(₹ Cr)
Mar 2023
Mar 2024
Sep 2025 (Latest)
Total Assets
1,508
1,542
1,647
Net Worth (Equity + Reserves)
775
855
895
Borrowings
292
252
259
Other Liabilities
441
469
493
Total Liabilities
1,508
1,542
1,647
Balance Sheet Banter:
Debt has ticked up slightly — probably that new grinding unit’s EMI.
Net worth grew steadily, showing decent retained earnings (despite dividends).
