Stock Overview: CMP, Target Price, Yields, Potential Gains, 52-Week Low and High
The current market price (CMP) of PNC Infratech Ltd is Rs 238.20 per share. The stock reached 52-week high of Rs 226.60 per share on May 11, 2022 and 52-week low of Rs 395.90 per share on October 13, 2021 on NSE. The stock is trading near its 52-week low on NSE.
The stock is expected to gain almost 24%, given the estimated target price and the current market price of the stock.
The stock in terms of return on investment does not look good in short-term investments as it has given negative returns over the past year of almost 7.51%. However, it gave positive returns on long-term investment, especially in 3 years and 5 years. It gave 14.59% in 3 years and 61.63% in 5 years, respectively.
Overview of returns and analysis by segment
PNC Infratech Ltd’s consolidated revenue in the fourth quarter of FY22 was Rs 2,226 Crore, up 19.40% YoY and 29.26% QoQ. Operating profit for Q4FY22 was Rs 480 Crore, up 14.28% YoY and 47.69% QoQ. Operating margins for Q4FY22 were 22%, -100 bps YoY and +300 bps QoQ. The PAT for Q4FY22 stood at Rs 247 Crore, up 64.66% YoY and 197.5% QoQ.
Breakdown of T4FY22 revenue: contract revenue represents 81% and tolls/annuities constitute 19% of overall revenue.
Management has given a revenue forecast of 15% for FY23. They are confident to maintain EBITDA margins in the range of 13% to 13.5% on a stand-alone basis for FY23. Management gave indications of order book of 8,000 to 10,000 crore for FY23. Order inflow for FY22 stands at Rs. 2022 amount to Rs. 14,663 crores. Of the total backlog, road and highway projects contribute about 65% and water and irrigation projects about 35%.
Why is this a good buy?
In Mar-22, the company received a bonus of Rs. 82.68 crore for Purvanchal Expressway, Package -5 for 132 days early completion. In Apr-22, the company received Rs. 37.02 crore bonus for Purvanchal Expressway Package – 6 to 97 days early completion. The company aims to invest Rs 100-120 crore in capex in FY23 and working capital days are expected to remain around 95 days. The company has been declared an L-1 bidder in 7 new HAM projects awarded by NHAI with a BPC of Rs. 8,446 crores.
Other Business Updates
The company has a total of 18 HAM projects and the total equity requirement is around Rs. 2,390 crore, on which they have already invested 915 crore till March 2022. company to register a turnover of around Rs. 8,000 to 10,000 crores.
Brokerage reviews and opinions, suggests buying for a target price of Rs 294
“We believe the company will continue to deliver strong results in the coming quarters driven by robust tendering activity. The company’s unexecuted backlog provides revenue visibility for the 2-3 next few years. They have significantly reduced debt on a stand-alone basis. Additionally, the company has a good track record of finishing projects ahead of the scheduled completion date. Construction space is seeing robust growth as NHAI expects to construct 25,000 km of national highway in FY23, increasing to 50 km per day We give a “BUY” rating on the stock and value the stock at 10x the earnings of FY24E to arrive at a target price of Rs. 294,” the brokerage said.
Company Overview – PNC Infratech Ltd
PNC Infratech Ltd is one of India’s premier infrastructure construction, development and management companies in the country, with extensive experience and proven expertise in delivering major infrastructure projects including highways, bridges, flyovers, power transmission lines, airport runways, industrial estate development and other infrastructure activities with an established track record of successfully delivering projects across all industries and geographies.
The Company provides end-to-end infrastructure implementation solutions that include engineering, procurement and construction (“EPC”) services on a fixed-price, turnkey basis as well as on an outsourcing basis. one price per item. The company also executes and implements projects on a “Design-Build-Finance-Operate-Transfer” (“DBFOT”), Operate-Maintain-Transfer (“OMT”) and other PPP formats.