Shares Of This Mid Cap Infrastructure Stock Can Jump 54% In Near Term, Anand Rathi Says Buy

Anand Rathi has recommended investors to buy PNC Infratech Ltd shares with a target price of Rs 416 apiece. If you buy PNC Infratech Ltd at the current market price of Rs 270 apiece, you will get a potential return of 54%. The mid cap infrastructure company has a market capitalisation of Rs 6,932 crore and was incorporated in 1999. Check key takeaways below:

1. PNC Infratech Stock Outlook & Return

The current market price of the stock is Rs 270 apiece with an intraday surge of 1.16%. The stock's 52-week high is Rs 318 apiece and 52-week low is Rs 219 apiece, respectively. The stock has given a return of 48% in last 5-years, 43% in last 3-years, and declined 10% in last 1-year. It gained 4% in 1-week.

2. PNC Infratech Net-Cash Status Strengthened

Q2 PAT cash of ~Rs1.6bn and the contracted receivables cycle (by six days q/q), together more than sufficed for Q2 equity infused (~Rs0.8bn), higher inventories (~Rs0.9bn q/q), and lower mobilization advances (~Rs0.8bn q/q). Consequently, net cash balance rose ~Rs0.8bn q/q to ~Rs2.4bn, and ammunition for a better scale is upheld.

3. PNC Infratech Monetisation Efforts Continue

A bouquet of six hybrid annuities, a BOTannuity and a BOT-toll with ~Rs9.4bn equity invested (and ~Rs47bn SPV-level debt) is on the block. Open to sell piecemeal to many buyers, due diligence is already underway for three hybrids. Management looks to sign definitive agreements by this year end, and consummation is targeted for FY24.

4. Valuation

According to Anand Rathi, "On slightly softer Q2 revenue, revenue estimates have been pruned a tad. However, earnings are higher (~6% for FY23e, ~5% for FY24e) on efficiently-managed inflation, contained capex, and controlled WC cycle. At the CMP, the stock (excl. investments) is available at PER of 7.3x our newly introduced FY25e. Risk. Considerable delay in appointed dates."

We retain our Buy rating with a higher TP of Rs416 (on rolling forward to FY25e), added Anand Rathi.

5. About PNC Infratech

It is one of the leading infrastructure investment, development, construction, operation and management companies in the country. It has expertise in execution of projects in core infrastructure sectors including expressways, highways, bridges, flyovers, airport runways, water supply, industrial area development and other infrastructure activities, according to its official website. 

Disclaimer

The stock has been picked from the brokerage report of Anand Rathi. 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 check with certified experts before taking any investment decision.