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Centrum Broking Report
PNC Infratech Ltd.'s reported numbers largely in-line with our estimates with 11% revenue growth and 13.3% margins. The management has maintained its FY24 guidance of 10% revenue growth and 13-13.5% margins.
In January 2024, PNC Infratech signed definitive agreement to sell 12 road assets to Highway Infra trust (KKR entity) for total EV of Rs 90 billion (Equity value Rs 29 billion: ~1.67 times return on invested equity).
Though National Highways Authority of India /Ministry of Road Transport & Highways tendering has been sluggish in FY24, PNC Infratech's healthy order book of Rs 174 billion (2.3 times trailing twelve months book-to-bill) provides enough headroom for growth in near term.
Order prospects in other areas like drinking water (JJM) and railways, are being pursued by PNC, which should also aid in achieving its order inflow target in FY25.
We maintain our 'Buy' rating on the stock with a revised target price of Rs 533 (Rs 460 earlier).
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