PNC Infra Q2 Results Review - Diversification Is The Key: IDBI Capital

IDBI Capital Report

PNC Infratech Ltd.'s Q2 FY25 operational results were lower than consensus estimates. Numbers were impacted from weak execution as adj. revenue declined by 58% YoY. The decline in revenue was due to delay in appointed date in certain projects and due to peak monsoon in some areas.

Company has lowered their revenue guidance to -15% to -20% (earlier -10%) for FY25 as company is now disqualified for one year from bidding in MORTH & NHAI tenders.

PNC Infra guides Ebitda margins around 12-12.5%. Company has started the year with strong set of order inflow and is level-one for orders of Rs 66 billion. Order book at Rs 199 billion equals to 2.8 times trailing twelve months revenue with 70% from road sector and remaining is from irrigation and water.

We retain Hold rating on the stock with and lowered our target price to Rs 339, target price implies valuation of 10 times FY26E EPS. Stock catalyst is order win, from different state authorities and segments apart from NHAI/MORTH.

Company has bidded in eight tender of railways, area development projects and airport development projects.

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