The Hindu Business Line
PNC Infratech (Buy)
CMP: ₹105.05 Target: ₹127 PNC Infratech Ltd (PNC) is an Infrastructure construction, development and management company. It has expertise in execution of projects including highways, bridges, flyovers, airport runways, industrial areas and transmission lines. Keytakeaways: a) Q2FY17 revenue de-grew by 23 per cent y-o-y impacted by delay in execution of major projects due to heavy rains and land acquisition problems. b) Order book remains robust at ₹5,339 crore (2.7x TTM revenue) provides strong revenue visibility for next 2–3 years. c) EBITDA margin declined by 13 bps y-o-y while the benefit of cheap raw material cost (31 per cent y-o-y) was offset by higher employee cost and other expenses. d) We reduced our revenue and PAT estimate by 15 per cent and 7 per cent for FY17 on the back of disruptions in execution. e) Strong order book is keeping the positive outlook intact; we value standalone business at a PE of 13x (earlier 14x) FY18E EPS and BOT projects at 1xP/B.