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Geojit Financial
PNC Infratech (Buy)
CMP: ₹192.25
Target: ₹223
PNC Infratech Ltd (PNC) is an Infrastructure construction, development and management company; expertise in execution of projects including highways, bridges, flyovers, airport runways, industrial areas and transmission lines.
Strong execution of big ticket orders & booking of arbitration claim of ₹109 crore led to robust revenue growth of 111 per cent y-o-y in Q2FY20.
EBITDA margins improved by 844 bps y-o-y at 21.8 per cent while adj. for one-off EBITDA margin remain stable at 13.8 per cent.
In Q2FY20 PNC has bagged a fresh order of ₹1,062 crore and Order book stood healthy at ₹9,877 crore which is 2.3x TTM revenue, provides improved visibility.
PAT grew by 489 per cent y-o-y to ₹207 crore due to strong margin, lower tax rate of 16 per cent and higher other income.
We increase revenue estimate for FY20E/21E by 21 per cent/13 per cent respectively as new HAM projects starts contributing to revenue book.
We value standalone EPC business at a P/E of 11x on FY21E EPS and BOT/HAM projects at 1xP/B and reiterate ‘buy’ rating.
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