Shares of PNC Infratech, an infrastructure development, construction and management company, has been gaining steadily in the last few days, after the company had posted healthy July-September quarter results on November 14.
In the last one week, the stock gained about 6 per cent and on Wednesday closed flat at ₹154.95 on the NSE. The counter witnessed a trading volume of about 15,000 shares, which is more than double the two-week average of 6,817 shares on the BSE.
Besides, the deliverable volume also picked up quite substantially. Of the 2.43 lakh shares traded on the NSE, 83.16 per cent or 2.02 lakh shares were up for delivery, indicating value buying.
Infrastructure firm PNC Infratech last Wednesday said its standalone net profit doubled to ₹35 crore during the quarter ended September 30, 2018, against ₹17 crore reported in Q2 of FY2017. Total income also doubled to ₹559 crore (₹269 crore).
₹14,900-cr order book
PNC Infratech’s revenues jumped even in a seasonally weak quarter as most of its project sites continued to see strong execution ramp-ups.
PNC has a robust order book of ₹14,900 crore (including HAM projects and new EPC projects of ₹8,750 crore) which is over eight times its FY18 revenue. This gives strong revenue growth visibility for the next three to four years, said Kotak Securities.
The company has received appointed date in most of its projects and land acquisition also picked up in its projects. Based on this, revenue is expected to remain strong in H2FY19, it added.
According to Pranav Mehta of Equirus Securities, the outstanding order book backlog, which needs to be completed over the next 2.5 years gives confidence on the company posting a 45 per cent CAGR in revenues over FY18-21E.
Kotak Securities, which maintained its ‘buy’ rating on the stock with a revised price target of ₹197 (against earlier ₹219), said: “We believe that achieving financial closure and adding new orders would not be a challenge for the company based on strong balance sheet.”
PNC Infratech would be able to deliver on the execution front, though more order inflows could hamper management bandwidth and execution deliverance, cautioned Pranav Mehta.