ICICI Direct's research report on PNC Infratech
PNC Infratech’s (PNC) revenues grew significantly by 79.7% YoY to Rs 1,321.8 crore in Q1FY20 led by strong execution well ahead of our expectation of Rs 1,029.0 crore. PNC received bonus worth Rs 25 crore in Q1FY19. Adjusting for this base effect, EBITDA margins contracted 60 bps YoY to 13.6% but were broadly in line with our estimate of 13.8%. RPAT de-grew 2.3% YoY to Rs 100.2 crore in Q1FY20 on account of bonus receipts in Q1FY19 and higher tax rate in Q1FY20 (30.8% tax rate in Q1FY20 vs. 12.7% in Q1FY19). Adjusting for bonus receipts in Q1FY19, PNC reported strong PBT growth of 56.6% YoY to Rs 144.7 crore in Q1FY20.
Outlook
Hence, we maintain our BUY rating on the stock with a target price of Rs 255/share. We value its construction business at Rs 207/share (at 8x FY21E EV/EBITDA implying 15.2x FY21 EPS).
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