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Geojit\’s research report on PNC Infratech
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. PNC reported a strong top-line growth of 53% YoY in Q2FY22 led by a ramp-up in execution. EBITDA margin improved by 23bps to 13.7% aided favourable project mix and lower employee cost (as a % of revenue). PNC has not received any orders in H1FY22 however, the order book remains healthy at Rs13,178cr which is 2.3x TTM revenue and provides revenue visibility for two to three years. PAT grew by 95% YoY helped by lower tax rate of ~26% (vs 36% in Q2FY21) and higher other income. H1FY22 revenue grew by 46% YoY and the company has guided for revenue growth of 20-25% with EBITDA margin of 13.5% – 13.75% in FY22.
Strong order book and a comfortable balance sheet we reiterate Buy rating on the stock with a TP of Rs370 based on a P/E of 15x on FY23E EPS and BOT/HAM projects at 0.5xP/B.
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