Buy PNC Infratech; target of Rs 342: Anand Rathi

Anand Rathi's research report on PNC Infratech

Revenue/EBITDA (excluding receipt of holdback from monetisation) stood at ~Rs9.8/1bn in Q2 lower than ARe of ~Rs11.2bn/1.3bn and Ce of ~Rs12.7/1.6bn. Muted execution was due to prolonged monsoon, sizeable orders not entering into execution and slow bidding from NHAI. Inflow momentum regained in H1 with receipt of 5 orders of ~Rs60bn, which is guided to be doubled by FY26-ens. Management has cut revenue growth guidance to 5% (from 15-20% guided earlier) despite fall in H1 in expectation of ramp-up in H2. Its optimism emanates from expansion of executable OB with key projects receiving AD. It monetised 11 assets, while the last HAM is to be concluded in H2.

Outlook

Strong OB and cash-positive BS offer reasonable medium-term visibility. It has placed bids for projects worth ~Rs170bn and identified opportunities of ~Rs1trn. In light of longterm potential, we maintain BUY rating on the stock with a lower TP of Rs342 TP (from Rs378 earlier), valuing its core-EPC at 10x Sep’27e EPS.

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