In its research report dated September 03, 2023, Geojit has expressed a bullish outlook on PNC Infratech and has recommended a “buy” rating on the stock, setting a target price of Rs 438.
PNC Infratech Ltd. (PNC) is an infrastructure construction, development, and management company with expertise in executing a wide range of projects, including highways, bridges, flyovers, airport runways, industrial areas, and transmission lines. Notably, the company currently boasts an order book worth Rs 19,000 crore, equivalent to 2.7 times its trailing twelve months (TTM) revenue, which augurs well for revenue visibility in the upcoming quarters.
PNC has set an ambitious target for topline growth of 15% year-on-year in FY24, inclusive of revenue exceeding Rs 2,000 crore from the water segment. Furthermore, the company aims to maintain an EBITDA margin in the range of 13% to 13.5%. Order inflows are expected to gain momentum in the second half of FY24, following the Ministry of Road Transport and Highways (MoRTH) revising the road construction target from 12,500 kilometers to 14,000 kilometers for the fiscal year. PNC aims to secure approximately Rs 10,000 crore in order inflows in FY24, with 70% coming from road projects and 30% from non-road projects.
In the first quarter of FY24, PNC reported a 6% year-on-year growth in revenue, slightly below expectations due to execution delays. However, with an expanding bidding pipeline and a robust order book, Geojit maintains its “BUY” rating on the stock. They have set a target price of Rs 438, based on a Price-to-Earnings (P/E) multiple of 12x on FY25 estimated earnings per share (EPS) for the EPC business and a Price-to-Book (P/B) basis for BOT (Build-Operate-Transfer) and HAM (Hybrid Annuity Model) projects.
Investors seeking investment opportunities in the infrastructure sector may find Geojit’s recommendation on PNC Infratech worth considering as they make their investment decisions.