Buy PNC Infratech; target of Rs 234: Prabhudas Lilladher

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Guidance intact: Management reiterated FY27/FY28 revenue guidance of INR 60bn/75bn, supported by a strong bidding pipeline of ~80 projects worth INR 1,800bn.
  • Debarment relief: The High Court's interim relief on the debarment order restores PNC's eligibility to bid for NHAI, MoRTH, and NHIDCL projects, removing a key near-term overhang.
  • International expansion: PNC is pursuing opportunities in Kazakhstan, Georgia, Uzbekistan, and the UAE, focusing on non-fund-based EPC projects and multilateral-funded contracts.
  • Order book visibility: The company has an unexecuted order book of over INR 180bn, providing medium-term revenue visibility, with 35-40% execution expected in FY28 and the balance in FY29.

Thesis Validation Checklist

  • Order inflows: Achievement of FY27 order inflow guidance of INR 120-150bn, with INR 42.6bn secured so far.
  • Execution ramp-up: Stronger H2 execution and fresh order wins to support growth.
  • International order wins: Successful bidding and execution of international projects, particularly in Kazakhstan and Georgia.
  • Debarment order outcome: The final outcome of the debarment order, with the next court hearing scheduled for 26 November 2026.
  • Working capital management: Improvement in collections and working-capital conversion, with a focus on reducing debtors and improving cash flows.