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HDFC Securities Institutional Equities
PNC Infratech Ltd. reported a 23.1% compound annual growth rate growth in its top line from FY19 to FY23.
The key takeaways from PNC Infratech's FY23 annual report are:
PNC's order book as of March 2023 stood at Rs 205.3 billion (~2.9 times FY23 standalone revenue; all-time high), which provides revenue visibility in the medium term.
At the standalone level, the company had gross/net debt of Rs 4.5/0.8 billion (gross debt/equity 0.11 times) as of March 203 versus a net cash position of Rs 3.2 billion in March 2022.
The plan to monetize 11/1 hybrid annuity model/built-operate-transfer projects seems to be on track and is expected to be closed by FY24-end.
We expect demand for HAM assets to sustain as multiple Invit platforms are chasing growth strategies, with recent HAM deal valuation exceeding 1.5 times plus price to book value of invested equity.
Given the all-time high order book, comfortable balance sheet, and likely robust inflows from asset monetisation, we maintain 'Buy' on the stock with an increased target price of Rs 452/share (13 times September-25E earnings per share roll-over, HAM assets valued higher at 1.2 P/BV).
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