PNC Infra rallies 8% on bagging Rs 819 crore highway project

The company has been declared L1 (lowest) bidder for a highway project for Ministry of Road Transport & Highways (MORT&H) with a bid project cost of Rs 819 crore

Shares of PNC Infratech rallied 8 per cent to Rs 286.30 on the BSE in Tuesday’s intra-day trade after the company was declared L1 (lowest) bidder for a highway project for Ministry of Road Transport & Highways (MORT&H) with a bid project cost of Rs 819 crore.

The project is for the construction of four-lane highway from 49.155 km to 74.700 km (Singraur Uphar to Baranpur Kadipur Ichauli) of NH-731A with paved shoulders (i/c Ganga Bridge) in Uttar Pradesh on hybrid annuity mode (Package-III).

PNC Infratech is engaged in diversified construction activities such as construction of highways, bridges, flyovers, airport runways and allied activities.

PNC’s order book (OB) at the end of Q3FY23 was at Rs 17,842 crore, 2.6x book to TTM revenues. The company, over the last three weeks, had also won three packages of highway project and one railway project totalling around Rs 4,000 crore. The above orders will, thus, boost the revenue visibility, ICICI Securities said in a note.

Last month, CARE Ratings revised the long-term rating while reaffirming the short-term rating assigned to the bank facilities of PNC Infratech (PIL). The revision takes into account the growth in the robust scale of PIL’s operations while maintaining healthy operating profitability during FY22 (refer to the period April 1 to March 31) coupled with strong demand prospects expected in medium term led by thrust of the government on infrastructure development, the rating agency said in a rationale.

Furthermore, the rating revision also takes cognisance of increase in the operational portfolio of projects on hybrid annuity mode (HAM) forming a larger proportion of operational special purpose vehicles (SPVs) along with a few annuity/toll based self-sustainable projects which strengthen PIL’s financial flexibility.

CARE Ratings believes that PIL shall monetise certain projects over the next one year thereby freeing up growth capital for future investments with minimal reliance on external debt. As articulated by the company, these monetisation initiatives are at various stages of development.