Big Jolt: Civil Construction Stock Hits 20% Lower Circuit After Latest MoRTH Order

Mid cap company engaged in civil construction industry, PNC Infratech Ltd shares suffered sharp blow today after Ministry of Road Transport & Highways (MoRTH) barred the company and its 2 subsidiaries on October 19, 2024 from participating in any tender process of the Ministry for a period of 1 year beginning from October 18, 2024. Current market price of PNC Infratech shares is Rs 366.70 per share. PNC Infratech shares witnessed steep decline of 18.71% in last 1-week and 27% fall in last 3-months. The company's market capitalisation stood at Rs 9,407.29 crore. Check key details below:

PNC Infratech Ltd Shares Hit Lower Circuit After Road Ministry's Latest Order: As per the exchange filing of PNC, MoRTH asked the company and its subsidiary companies (SPVs) namely PNC Khajuraho Highways Pvt. Ltd. and PNC Bundelkhand Highways Pvt. Ltd. to appear before MoRTH on October 18 with all documents and evidence in their support for personal hearing pertaining to the FIR and the charge sheet filed by the CBI in June and August this year.

Commenting on the issue, PNC Infratech reportedly said there will be no impact on the current development, construction and O&M activities. The company said that the impact of the latest order will be assessed and intimated.

PNC Infratech Shares Performance: The 52-week high price of PNC Infratech shares on BSE is Rs 574.50 per share (as on 27/05/2024) and 52-week low price is Rs 310.05 per share (as on 09/11/2023), respectively. PNC Infratech shares fell over 15% in last 6-months, and gained less than 1% in last 1-year. In last 2-years, PNC Infratech stock surged 43% and gained 114% in last 5-years.

PNC Infratech Financials: The company reported its net sales at Rs 1744.42 crore for the quarter ended June 2024 as against Rs 1861.43 crore in the corresponding quarter of last year. The company declared its net profit at Rs 421.09 crore for the June 2024 quarter, up 168.91% as compared to Rs 156.59 crore declared in June 2023. Its EBITDA for June 2024 quarter stood at Rs 602.10 crore, up 138.14% as against Rs 252.83 crore in June 2023.

Nuvama Views: According to the brokerage firm, "We believe the stock shall be under pressure in the near term due to the adverse impact on order accretion for the company from MoRTH. Pending clarity on the impact of order wins from other government agencies, we put the stock 'UNDER REVIEW'."

While PNC shall be unable to bid for central government road projects for the next year, management believes the company can bid for new tenders from other central government agencies and state government authorities. YTD order inflows stand at ~INR61bn (the company's share) taking its gross order book (excluding the execution in Q2FY25) to over INR210bn, which provides revenue visibility for the next 2-2.5 years, added the analyst.

PNC Infratech About: PNC Infratech has established itself as a strong executor in roads and water infra segments. Additionally, superior execution capabilities via ownership of modern equipment and in-house teams enables PNC to deliver projects on-time. It provides end-to-end infrastructure implementation solutions that include design, engineering, procurement, construction, O&M services on fixed-sum turnkey (EPC), "Design-Build-Finance-Operate-Transfer" (DBFOT) Toll, Annuity, Hybrid Annuity, Operate-Maintain-Transfer and other formats, under one roof, according to its official website.