Shares of PNC Infratech, an infrastructure company, surged 4.24% to ₹298.60 apiece on Friday, after the company secured two new hybrid annuity road projects worth ₹2,004.43 crore from the National Highways Authority of India.
In an exchange filing on Thursday, the company announced that it had been designated as the L1 (lowest) bidder for two NHAI highway projects.
The first project is the construction of a six-lane greenfield Varanasi-Ranchi-Kolkata highway. This project is worth Rs. 891 crore and will cover a length of 27 kms from the junction with the Chandauli-Chainpur road near Khainti village to the junction with the Bhabhua-Adhaura road.
The second project is also for the construction of a six-lane greenfield Varanasi-Ranchi-Kolkata highway. This project is worth ₹1,113.43 crore and will cover a length of 36 kmss from the junction with Bhabhua - Adhaura Road in Bhairopur village to Konki village.
Both the projects are to be constructed in 24 months and operated for 15 years post construction, the company said. In last month, the company bagged a ₹771.46 crore railway project from the Haryana Orbital Rail Corporation Ltd.
In Q3 FY23, the company posted a 59.25% YoY rise in its standalone net profit to ₹129 crore as compared to ₹81 crore in the year-ago quarter. The revenue from operations increased by 6.89% YoY to ₹1,627 crore in Q3 FY23 from ₹1,522 crore in Q3 FY22.
The operating profit surged to ₹208 crore from ₹165 crore in Q3 FY23, a growth of 26% YoY, while the operating profit margin came in at 13%, an expansion of 200 bps YoY.
In 9MFY23, the company has not received any orders; however, the company remains confident of achieving ₹8,000 crore to ₹10,000 crore of new orders in Q4FY23, said Geojit Financial Services.
The current order book remains strong at ₹17,842 crore, which is 2.6 times TTM revenue and provides strong revenue visibility in the coming years, the brokerage added.
The brokerage has reiterated its "buy" call on the stock with a target price of ₹328 apiece, citing the company's robust order book and strong execution capabilities as factors that will maintain the outlook.
Similarly, another brokerage firm, HDFC Securities, also maintained its "buy" rating on the stock with a revised target price of ₹426, on the back of the company's strong order book and comfortable balance sheet.
As of December 2022, PNC had a cash balance of ₹3.7 billion and standalone gross debt of ₹1.5 billion, resulting in a net cash balance of ₹2.2 billion, compared to ₹2.4 billion in September 2022, it added.
According to the brokerage, PNC has received the appointed dates (AD) for five of its seven new HAM projects, and the ADs for the remaining two projects are expected to be received by the end of FY23.
16 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
