Views on PNC Infratech 2QFY2016 Result: Angel Broking

Views of Mr. Santosh Yellapu (Sr. Research Analyst - Infrastructure, Angel Broking) on PNC Infratech 2QFY2016 Results:

PNC Infratech reports strong 2QFY2016 performance

"PNC Infratech (PNC) has reported a strong set of numbers for 2QFY2016. The performance was mainly driven by strong execution of captive BOT as well as other EPC road projects, which in our view, contributed to the strong 45.1% YoY increase in top-line to INR 463cr (ahead of our expectation of INR 378cr). The strong execution led the company to report a strong EBITDA of INR 54cr. The EBITDA margin declined by 50bp YoY to 11.7%, which we believe, could be due to higher dependency on sub-contracting, during the quarter. On the same lines, lower interest expenses helped the company to report a strong quarterly PAT of INR 30cr, which is again ahead of our estimates. The Reported PAT margin for the quarter stood at 6.6%, which is flat on a YoY basis.

Our estimation suggests PNC having drawn order inflows of INR 1,743cr year till date, which is ahead of FY2015's order inflows of INR 1,618cr. We estimate PNC to be sitting on an order book of INR 3,648cr (order book to LTM sales ratio at 2.2x). On the back of order book growth, we expect earnings to gain further traction going forward. Strong earnings performance has led us to revise our estimates upwards. After a more detailed analysis of the company's 2QFY2016 performance, we would likely raise our price target on the stock. We maintain our positive view on the stock."

Source : Equity Bulls

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