Broker’s call: PNC Infratech (Hold)

Goal: ₹339

CMP: ₹301.10

PNC Infratech (PNCL) Q2-FY25 operational outcomes had been decrease than consensus estimates. Numbers had been impacted from weak execution as adjusted income declined by 58 per cent y-o-y. The decline in income was resulting from delay in appointed date in sure initiatives and resulting from peak monsoon in some areas.

The corporate has lowered their income steerage to -15 per cent to -20 per cent (earlier -10 per cent) for FY25 as firm is now disqualified for 1 12 months from bidding in MORTH and NHAI tenders. PNCL guides EBITDA margins round 12-12.5 per cent.

It has began the 12 months with robust set of order influx and is L1 for orders of ₹6,600 crore. Order e book at ₹19,900 crore equals to 2.8x TTM Income with 70 per cent from highway sector and remaining is from irrigation and water.

We retain Maintain score on the inventory with & lowered our goal worth to ₹339, TP implies valuation of 10x FY26E EPS.

Inventory catalyst is order win, from totally different state authorities and segments other than NHAI/MORTH. Firm has bidded in eight tender of Railways, space improvement initiatives & airport improvement initiatives.