PNC Infratech share price rises 11% post Q1 results: Reported net profit rises multifold; Should you Buy, Sell or Hold?

Stock Markey today: PNC Infratech share price gained more than 11% during morning trades on Monday post its results on Friday declared after the market hours. The standalone Net profit reported by PNC Infratech at ₹422 crore grew multifold over ₹157 crore in Q1 last year while Consolidated net profit by PNC Infratech at ₹575 crore also grew significantly over ₹181 Crore in the year ago quarter.

The helped improve investor confidence driving share prices. The PNC Infratech Share price opened at ₹520, more than 11% higher over the previous close of ₹429.75, on the NSE on Monday

Q1 earnings lifted by one time gains

The net profit during Q1 were lifted by certain one time gains . Company's standalone revenues nevertheless at ₹1744 Crore during Q1FY25 declined over ₹1861 crore during Q1FY24. Consolidated revenues at ₹2168 crore was only slightly higher than ₹2092 Crore in the previous quarter.

The company said that contract revenue for quarter ended on June 30, 2024 includes Rs. 378.81 crore towards execution of Settlement Agreement between National Highways Authority of lndia and PNC's two Special Project Vehicles (SPVs) under the 'Vivad Se Vishwas scheme of Government of lndia. lt also includes Rs. 56.39 crore towards bonus received for early completion of one of its EPC project in Maharashtra"

The same led to strong growth in net profit

Analyst positive on Industry outlook

Analysts remain positive on Infrastructure companies at PNC Infratech looking at large opportunities in the road construction and infrastructure space in the country helped by Government impetus. Though competition remains high, Analysts say that the companies will benefit from operating leverage. Those at Nuvama Institutional Equities prior to results had said that they prefer road companies with robust balance sheets such as PNC Infratech

PNC's Order Book or the remaining value of contracts under execution stood at over Rs. 14,100 crore as on 30th June 2024

Adjusted Q1 performance however failed to impress analysts

The Q1 results have not impressed analysts. Analysts at Centrum Broking post Q1 Results have said that PNC Infratech reported extremely weak set of results as adjusted revenue plummeted by 30% on YoY basis and 30% below our estimate. The settlemenst under Vivad Se Vishwas and also Bonus helped.

But adjusted for these gains, standalone revenue came in at Rs1309 crore came lower against Rs2045 Crore in 4Q and 1861 crore in 1QFY24 as per Centrum Broking as Ebitda at Rs158 crore also is down 35% YoY and 41% sequentially while margins came in at 12.1% down 107bps YoY and 104 basis points.

Further there is ongoing CBI investigation against certain company officials and as per Centrum Analysts, the lower execution is probably related to this event though company has mentioned that its operations remained unaffected due to this event.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

(More to come)