PNC Infratech - Robust Order Book, Segment Diversification To Drive Future Growth: Axis Securities

Axis Securities Report

Over the years, PNC Infratech Ltd. has developed itself as one of the premier engineering, procurement and construction players in the road sector and has also diversified its revenue stream to other segments including water supply and irrigation.

The company has a robust order book, better execution credentials, a crystal clear focus on the road segment, and a lean balance sheet. This along with the government’s thrust on developing highways and expressways, and an asset monetisation plan, we expect PNC Infra to report revenues/Ebitda/adjusted profit after tax growth of 12%11%/13/% compound annual growth rate respectively over FY23-25E.

We maintain a 'Buy' rating on PNC Infra and value its EPC business at 11.5 times FY25E EPS and hybrid annuity model portfolio at one time book value to arrive at a target price of Rs 435/share, implying an upside of 18% from the current market price.

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