PNC Infratech sees brisk buying, hits day’s high, on tactical bets ahead of Union Budget

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January 12, 2023
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There is an expectation that the upcoming Union Budget will also be growth-oriented and the government will continue its infra-push. This has made investors confident of taking bets in the infrastructure space.

Project delays are highest in roads, railways and ports. (Representational image)

Shares of PNC Infratech rose as much as 4 percent to the day’s high of Rs 327 on January 12, on likely buying ahead of the Budget.

There is an expectation that the Union Budget will be growth-oriented and the government will continue its infra-push. This has made investors confident of taking bets in the infrastructure space.

At 11:21am, the shares of the road company were trading 3.1 percent higher at Rs 325.10 on the BSE. The stock has gained 12 percent in a month and is up 22 percent in the past three months.

“In the infrastructure space, we expect strong net earnings growth from both KNR and PNC Infratech supported by healthy execution,” said Sharekhan.

It expects the company’s operating margin to improve and report strong net earnings growth of 75.2 percent YoY.

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The company is on Nomura’s ‘buy’ list in the infra sector, as it has been consistently generating operating cash flow and reducing debt. It also likes PNC Infratech because the company has succeeded in turning its net debt to net cash.

Some other positives of the company are healthy order book of about Rs 193 billion for the second quarter, stellar execution pace and most projects getting completed within stipulated time, along with stable operating margins of 13?14 percent and low debt?equity.

For the September quarter, the company’s consolidated sales fell 0.2 percent to Rs 1,795.07 from Rs 1,797.69 crore a year ago. Its net profit came in flat at Rs 132.12 crore in the September quarter.

PNC Infratech is an Indian infrastructure investment, development, construction, operation and management company with wide experience and proven expertise in execution of projects in core infrastructure sectors including expressways, highways, bridges, flyovers, airport runways, water supply, industrial area development and other infrastructure activities with an established track record of successful execution of projects across geographies.

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