'Buy' This Infra Stock For 28% Return, With A Target Price Of Rs. 420: HDFC Securities

Target Price

The Current Market Price (CMP) of PNC Infratech is Rs. 329. The brokerage firm, HDFC Securities has estimated a Target Price for the stock at Rs. 420. Hence the stock is expected to give a 28% return, in a Target Period of 1 year.

Company performance

PNC Infratech (PNC) has reported a strong quarter with revenue/EBITDA/APAT of Rs. 16/2.2/1.4 bn beating HDFC's estimates. Management has maintained its guidance of ~20% topline growth and 13.5-13.7% EBITDA margin. Aligarh asset proceed is likely to flow in by the end of Nov-21; it will be partly used for funding Rs. 8bn of balance equity requirement in 11 HAM assets. HDFC mentioned, "In the water segment, it has Rs. 32bn worth of projects under JJM, and going forward, it expects to retain 25% of the order book (OB) under projects from this scheme."

Comments by HDFC Securities

According to HDFC Securities, the company has shown a "Robust performance. The company's revenue stood at Rs. 16bn (+53%/+29% YoY/QoQ); EBITDA stood at Rs. 2.2bn (+56% YoY, +26% QoQ). PNC expects annual growth of ~20% in FY22 topline, with a margin in the range of 13.5-13.7%. Given a strong OB and a comfortable balance sheet, we maintain BUY with an unchanged TP at Rs. 420 (15x Sep23E)."

About the company

PNC Infratech (PNC) is an Indian infrastructure construction, development, and management company. The company works across the fields of Highway Construction, BOT-(TOLL)/BOT (Annuity)/OMT/HAM Highway Projects, Airport Runway Project, Industrial Area Development, etc.

Disclaimer

The above stock has been picked from the brokerage report of HDFC Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.