ICICI Direct Places Buy On Midcap Infra Stock, Likely To Give 28% Return, Board Recommends Dividend

Leading brokerage firm ICICI Direct has assigned a Buy rating on PNC Infratech Ltd. with a target price of Rs 390/share. Its stock can fetch up to 28% if it is purchased at the current market price considering the assigned target price. PNC Infratech is a Midcap stock operating in the Infrastructure sector. It has a market capitalisation of Rs. 7,862.93 crore.

The company in a Board meeting held on Friday, May 26, 2023, recommended a final dividend of 25% i.e. Rs.0.50/share at face value of Rs. 2/- each for the financial year ended 31st March 2023. The recommended dividend is subject to approval by shareholders at the forthcoming Annual General Meeting (AGM).

Recommended Final Dividend Of 25%

According to a regulatory filing by the Board of Directors of PNC Infratech Ltd., "Recommended a final dividend of 25% i.e. Rs.0.50/- (Fifty Paise) per equity shares at face value of Rs. 2/- each for the financial year ended 31st March, 2023, subject to the approval of the shareholders at the forthcoming Annual General Meeting ("AGM") of the Company, which if approved, shall be paid, within thirty days from the conclusion of the AGM."

Q4FY23 Results

According to ICICI Direct, PNC reported healthy execution during Q4FY23. Standalone revenue during Q4FY23 was up ~10.3% YoY to Rs. 2,115 crore, aided by healthy execution. EBITDA at Rs. 281 crore was up ~25% YoY. EBITDA margin, at 13.3%, was up 157 bps YoY, led by benefits arising from softening in commodity prices. PAT was up ~33.5% YoY at Rs. 184.5 crore.

Buy for a Target Price of Rs. 390/share

According to ICICI Direct, PNC's share price has grown at ~12% CAGR over the past five years (from ~Rs. 176 in May 2018 to Rs. 311 currently). "We maintain our BUY rating on the company. PNC has exhibited healthy execution along with a stable margin trajectory. Medium trigger is asset monetisation, which would free up capital and drive scalability. We value PNC at Rs. 390/share," the brokerage has said.

Stock Outlook

On Monday, the stock of ONC Infratech closed 2.78% down at Rs. 306.50/share. Its 52 week high is Rs. 352/share and 52 week low is Rs. 219/share, respectively. It has fallen 3.89% in the past 1 week. It has given 8.15% positive return in the past 1 month. It has given 27.44% positive return in 3 years. In the past 5 years, it has given 75.14% positive return.

About - PNC Infratech Ltd.

PNC Infratech has established itself as a strong executor in roads, water infra and airport runway segments. Additionally, superior execution capabilities via ownership of modern equipment and in-house teams enables PNC to deliver projects on-time. PNC has executed 84 major infrastructure projects till date. Reported 30.6% revenue CAGR in FY18-23; operating margin was in the range of 13-14%. Proficient execution, robust return ratios (RoCE: ~20%).

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.