Broker's call: PNC Infratech (Buy)

Updated on: Nov 27, 2019

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.

Published on November 26, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you