Buy PNC Infratech; target of Rs 426: HDFC Securities

HDFC Securities' research report on PNC Infratech

PNC Infratech (PNC) reported Q3FY23 revenue/EBITDA/APAT at INR 16.3/2.1/1.3bn, missing our estimates on all fronts by 5/7.9/10.1%. PNC expects ~90-95% of JJM water projects to be executed by FY25-end. PNC has maintained its revenue growth guidance of 10% YoY and EBITDA margin guidance of 13.3- 13.5% for FY23 and 10-15% revenue growth and 13.3-13.5% EBITDA margins for FY24. With a cash balance of INR 3.7bn and standalone gross debt of INR 1.5bn, PNC has a net cash balance of INR 2.2bn as of Dec’22 vs. INR 2.4bn as of Sep’22. Capex guidance for FY23 is INR 1-1.2bn, with INR 370mn incurred in 9MFY23.

Outlook

Given a strong OB and comfortable balance sheet, we maintain BUY, with an increased TP of INR 426/sh (15x Dec-24E rolled over, 1x P/BV for HAM equity investment).

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PNC Infratech - 16 -02 - 2023 - hdfc