Buy PNC Infratech; target of Rs 378: Anand Rathi

Anand Rathi's research report on PNC Infratech

PNC’s ~Rs11.4bn/1.4bn Q1 revenue/EBITDA came below ARe’s ~Rs15.4bn/1.8bn and the consensus’ ~Rs16bn/1.9bn. Muted execution was due to sizeable orders awaiting ADs, and slow moving MSRDC and JJM orders. Management expects ADs for five road assets (~Rs43bn) by end-Q3. With MDO and BESS orders, ytd inflows of ~Rs52bn will be executed from Q4 FY26. Management concluded the long pending monetisation of 11 assets with the last HAM to be done next quarter. It is sanguine of orders of ~Rs120bn-150bn in FY26 with 15 bids placed (incl. one ToT, two mining). Nevertheless, it has emerged stronger and identified non-MoRTH opportunities, planning to diversify its OB to metro-rail, railways, renewables, mining, airports, buildings, etc. The sturdy OB and (net cash positive) BS provide reasonable medium-term assurance, which would further improve on ADs for five road projects.

Outlook

Seeing the long-term potential, we retain our Buy rating with a lower Rs378 TP (earlier Rs403) rolling forward our core-EPC at 10x Sep’27e EPS.