PNC Infratech (PNC) reported a better-than-expected performance in Q2FY21. Topline, adjusted for one-off Rs. 109.5 crore as arbitration claim for Hapur-Moradabad project in the base quarter, de-grew merely by 1.6% YoY to Rs. 1,053.5 crore. The performance was resilient, given the heavy monsoon period and disruptions caused by Covid-19 pandemic. Operating profit came in at Rs. 142.1 crore, down ~44.8% YoY. Here also, adjusted for the one-off element in the base quarter, the operating profit decline was merely ~3.8% YoY. The consequent margin, was at 13.5% (down 30 bps YoY, on adjusted basis). Reported PAT of Rs. 69.3 crore (down 66.5% YoY) was a beat led by superior operating performance. On adjusted basis, PAT was up ~12% YoY.
Valuation & Outlook
PNC remains our preferred pick in the EPC space given its robust order book, healthy return ratios and lean balance sheet. Notwithstanding its asset monetisation plan fructification, sufficient internal accruals from current order book is enough for equity infusion. We maintain our BUY rating with a revised SoTP target price of Rs. 210/share. We value its construction business at Rs. 169/share (at 5x FY22E EV/EBITDA implying ~10x FY22 EPS).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Narayana_Q2FY21.pdfhttps://www.icicidirect.com/mailimages/IDirect_PNCInfra_Q2FY21.pdf
Shares of PNC Infratech Ltd was last trading in BSE at Rs.168.75 as compared to the previous close of Rs. 165.7. The total number of shares traded during the day was 5698 in over 469 trades.
The stock hit an intraday high of Rs. 171.5 and intraday low of 163.55. The net turnover during the day was Rs. 956109.