PNC Infratech stock soars 7% after subsidiary receives Rs 391 crore from NHAI in settlement agreement

Nuvama has a 'buy' rating on PNC Infratech stock with a target price of Rs 669, up from Rs 525 earlier.

Share of PNC Infratech climbed over 7 percent on June 3 after the infrastructure company said its subsidiary, PNC Kanpur Highways Ltd, has received a payment of Rs 390.62 crore from the National Highways Authority of India (NHAI) as part of a settlement agreement.

PNC Infratech said this payment, made under the Government of India's 'Vivad Se Vishwas II (Contractual Disputes)' Scheme, was executed on May 9, 2024.

The total settlement amount agreed upon was Rs 398.60 crore, from which tax deductions at source (TDS) were applied, resulting in the net receipt of Rs 390.62 crore, PNC Infratech said.

This agreement falls under Section 73(2) of the Arbitration and Conciliation Act 1996. The settlement was finalised on May 31, 2024, marking a significant resolution of contractual disputes between NHAI and PNC Kanpur Highways Ltd.

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PNC specialises in executing large-scale EPC contracts with special focus on North and Central India. A conservative bidding strategy centred on ‘cluster-based’ project location, strong asset base and lean working capital have reinforced its credentials, according to Nuvama Institutional Equities.

In order to insulate itself from any slowdown in the roads sector and expand growth opportunities, PNC is steadily venturing into segments such as airport runways and water supply.

A measured approach to sectoral diversification and gradual entry in Build-Operate-Transfer (BOT)/Hybrid Annuity Model (HAM) projects place PNC in a sweet spot to capture large upcoming opportunities in the infra space, the brokerage said.

Nuvama retained 'buy' rating on PNC Infratech stock with a revised target price of Rs 669, up from Rs 525 earlier, while rolling over the valuation to Q4FY26E.

At 11:21 am, PNC Infratech shares were trading 5.3 percent higher at Rs 545.45 apiece on the National Stock Exchange (NSE). So far this year, the stock has rallied 55 percent, outperforming benchmark Nifty 50, which rose nearly 7 percent during this period.

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