PNC Infratech - Q1FY21 Result Update - ICICI Securities

PNC Infratech's (PNC) Q1FY21 performances, notwithstanding lockdown led execution impact, was better-than-expected. Revenues at Rs. 905.3 crore, were down ~31.5% YoY (better than our estimates of ~51% decline), with the decline attributable to lockdown due to Covid-19 and labour unavailability. EBITDA margin was higher at 13.2% (down 35 bps YoY) but better than estimates of 9% on account of better topline and lower employee expenses. PAT of Rs. 60.1 crore (down 40% YoY) was higher-than-expected led by superior EBITDA, lower depreciation and higher other expenses.

Valuation & Outlook

PNC remains our preferred pick in the EPC space given its robust order book, comfortable working capital cycle, healthy return ratios and lean balance sheet. Notwithstanding near term hiccups on account of Covid-19, PNC is likely to tide over with resilient fundamentals. While monetisation of HAM assets could be delayed in near term, we do not see it as a major issue with sufficient internal accruals from current order book enough for equity infusion. Hence, we maintain our BUY rating on the stock with a revised SoTP target price of Rs. 200/share. We value its construction business at Rs. 159/share (at 5x FY22E EV/EBITDA implying ~10x FY22 EPS).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PNCInfra_Q1FY21.pdf

Shares of PNC Infratech Ltd was last trading in BSE at Rs.170.85 as compared to the previous close of Rs. 172.25. The total number of shares traded during the day was 8221 in over 258 trades.

The stock hit an intraday high of Rs. 176.95 and intraday low of 169.65. The net turnover during the day was Rs. 1419274.

Source : Equity Bulls

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