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Last Updated : Jun 27, 2020 11:58 AM IST | Source: Moneycontrol.com

Buy PNC Infratech; target of Rs 233: Dolat Capital

Dolat Capital is bullish on PNC Infratech has recommended buy rating on the stock with a target price of Rs 233 in its research report dated June 26, 2020.

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Dolat Capital's research report on PNC Infratech


PNC reported revenue in line, EBITDA margin lower and APAT above estimates. PNC posted 7.6%/ 3.4%/ 2.6% YoY growth in revenue/ EBITDA/ Adj. PAT to Rs11.6 bn/ Rs1.6 bn/ Rs761 mn in Q4FY20. The company is facing labour shortage and is currently operating with 75% strength and expects 100% post monsoon. We broadly maintain our revenue and EBITDA margin estimates for FY21E/ FY22E. However, we increase our FY22E APAT estimates due to lower tax as company will adopt the new tax rate from FY22E. We expect healthy revenue/ APAT CAGR of 9.1%/ 8.1% over FY20-22E. Moreover, revenue/ APAT growth significantly slows down to 2.3%/ -10.3% in FY21E due to lockdown impact and jumps back to revenue/ APAT growth of 16.4%/ 30.2% in FY22E driven by stabilization of labour and supply chain issues coupled with execution from 4 HAM projects where AD is expected in Q3FY21E.



Outlook


The current core construction valuations of 11.3x/ 8.7x FY21E/ FY22E EPS are attractive. Thus, we maintain Buy, with SOTP of Rs233 (10x FY22E EPS and 1x FY22E P/B for HAM and BOT investments).




For all recommendations report, click here

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First Published on Jun 27, 2020 11:58 am
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