PNC Infratech shares surge over 6% on bagging new hybrid annuity road project
Shares of PNC Infratech, an infrastructure company, climbed 6.12% to 364 apiece during Tuesday’s intraday trade after the company secured a new Hybrid Annuity Highway Project of MPRDC for a ‘Bid Project Cost’ of ₹1,174 crore.
In an exchange filing on Monday, the company announced that it had secured the position of the lowest (L1) bidder for the “Construction of Western Bhopal Bypass as 4-lane with paved shoulders along with a service road starting from km 424.0 of Jabalpur-Bhopal Road (NH-46) and ending at km 21.0 of Bhopal-Dewas Road (SH-28) with a design length of 40.90 km in the State of Madhya Pradesh on Hybrid Annuity Mode (HAM)” of MPRDC (Madhya Pradesh Road Development Corporation). The project will be constructed in 24 months and operated for 15 years post-construction.
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The company shares this year so far have delivered a healthy return of 21.73%, and at current levels, the shares are trading 11.13% away from reaching their all-time high of ₹395.90 apiece.
In Q2 FY24, the company posted a 12.12% YoY rise in its consolidated net profit to ₹148 crore as compared to ₹132 crore in the year-ago quarter. The revenue from operations increased by 6.46% YoY to ₹1,911 crore in Q2 FY24 from ₹1,795 crore in Q2 FY23.
The operating profit surged to ₹400 crore from ₹326 crore in Q2 FY24, a growth of 23% YoY, while the operating profit margin came in at 21%, an expansion of 300 bps YoY.
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Following PNC’s Q2FY24 performance, HDFC Securities maintained a ‘buy’ rating on the stock, setting a target price of ₹452 apiece. The brokerage highlighted the company’s robust balance sheet and improved margins.
As of September 2023, PNC reported a net debt position of ₹2 billion, down from ₹3 billion in June 2023, with a cash balance of ₹2 billion and a gross debt of ₹4 billion. Notably, the net working capital (NWC) days improved from 87 in March 2023 to 79, the brokerage said.
Out of the total of ₹29.4 billion, PNC has already infused ₹18.5 billion as of September 2023, leaving a residual equity requirement of ₹11 billion for all Hybrid Annuity Model (HAM) projects in the portfolio. The company plans to invest ₹1.0, 4.5, and 4.3 billion in H2FY24, 25 and 26.
Also Read: PNC Infratech, NCC among top infrastructure stock picks by Phillip Capital
Despite a capex of ₹0.3 billion in H1FY24, PNC’s FY24 guidance remains unchanged at ₹1.2 billion. The due diligence for 11 HAM and 1 BOT project is complete, and monetization is expected to be concluded by the end of FY24, according to the brokerage.
At 11:30 AM, the stock was trading with a gain of 2.02% at ₹349.90 apiece.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 19 Dec 2023, 11:39 AM IST
