PNC Infratech - Q4 FY21 Result Update - YES Securities

(Rating: BUY, TP: Rs338, Upside: 37%)

- PNC Infratech (PNC) posted revenue growth of 42.0% yoy and 24.3% qoq driven by a sharp pickup in execution.

- Operating margin has also seen an improvement and stood at 14.1% in Q4 FY21, up by 63 bps yoy & qoq. There has not been any major impact of inflation in raw material cost as all its EPC & HAM projects has escalation clause.

- PNC Infratech is currently sitting on a robust order book of Rs. 166 bn with book to bill ratio of ~3.4x.

- Our view: The execution has picked up sharply during the quarter and PNC ended the year with flattish topline growth. The margins have been stable at 13.5%-14.0% levels despite the increase in input costs. The order flows during FY21 has been robust despite pandemic and current order book of Rs.166 bn (>3x FY21 revenues) provides strong growth visibility. The order pipeline is very strong which would aid order inflows during FY22. Asset Monetization is progressing well which would further improve the balance sheet and order intake capacity. We have marginally increased our estimates for FY22 & FY23 to factor in the strong performance and maintain our BUY rating on the stock for target price of Rs.338 (on SOTP basis). We have valued the EPC business at 12x FY23E EPS and Investments in BOT at book value.

Shares of PNC Infratech Ltd was last trading in BSE at Rs.246 as compared to the previous close of Rs. 249.15. The total number of shares traded during the day was 48663 in over 1588 trades.

The stock hit an intraday high of Rs. 254.25 and intraday low of 244.25. The net turnover during the day was Rs. 12102600.

Source : Equity Bulls

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