PNC Infratech Ltd has experienced a significant decline in its stock price after the Ministry of Road Transport & Highways (MoRTH) barred the company and its two subsidiaries from participating in tender processes for one year, effective from October 18, 2024. This decision follows an FIR and charge sheet filed by the CBI earlier this year, leading MoRTH to take action. The company’s share price plummeted nearly 20%, hitting the lower circuit, and has seen a sharp drop of 18.71% in the last week and 27% in the past three months. Currently, PNC Infratech shares are priced at Rs 366.70, with a market capitalization of Rs 9,407.29 crore.
Despite this setback, PNC Infratech has stated that its ongoing development, construction, and operations and maintenance (O&M) activities will not be immediately affected by the order. However, the company will assess and provide further details on the long-term impact. Over the last six months, the company’s shares have dropped over 15%, while its 52-week range shows a high of Rs 574.50 (as of May 2024) and a low of Rs 310.05 (as of November 2023).
Financially, the company posted strong results for Q1FY25, reporting net sales of Rs 1,744.42 crore, a slight decline from Rs 1,861.43 crore in the same period last year. However, net profit surged 168.91% year-on-year to Rs 421.09 crore, while EBITDA rose by 138.14% to Rs 602.10 crore, indicating solid operational performance despite the recent challenges.
Brokerage firm Nuvama has put the stock ‘under review,’ noting that it will likely face pressure in the near term due to the restriction on order inflows from MoRTH. While the company will be unable to bid for road projects from MoRTH for the next year, it may still be eligible to bid for tenders from other central and state government agencies. PNC’s current order inflow for FY25 stands at approximately Rs 61 billion, with a gross order book exceeding Rs 210 billion, providing the company with revenue visibility for the next 2 to 2.5 years.
PNC Infratech has built a strong reputation in the road and water infrastructure segments, known for its end-to-end infrastructure solutions including design, engineering, procurement, construction, and O&M services. Its capabilities span various models like EPC, DBFOT, toll, annuity, hybrid annuity, and more. Despite the challenges, the company remains a key player in infrastructure development.
Disclaimer:
The information provided in this article is for informational purposes only and does not constitute financial or investment advice. Investors are advised to conduct their own research or consult with a professional financial advisor before making any investment decisions. The stock market is subject to risks, and past performance is not indicative of future results. Neither the author nor the publisher is responsible for any losses incurred based on the information provided.
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