Buy PNC Infratech; target of Rs 400: Sharekhan

Sharekhan's research report on PNC Infratech

Adjusted standalone revenues, OPM and net profit lagged estimates due to a delay in the receipt of appointed dates, heavy monsoons, and lower JJM project execution. Management has trimmed standalone revenue guidance, estimating a 15-20% y-o-y dip as against 10% y-o-y dip while retaining OPM guidance of 12-12.5% for FY2025. Company expects more than 30% y-o-y standalone revenue growth in FY2026. The company has retained its order inflow target of Rs. 13,000-15,000 crore for FY2025 pursuing Rs. 25000 crore orders ex-MORTH & NHAI.

Outlook

We retain a Buy on PNC Infratech with a revised PT of Rs. 400, factoring downwardly revised estimates and lowering valuation multiple to factor in medium-term uncertainties with respect to its disqualification by MoRTH.