PNC Infratech Ltd has encountered a significant setback after the Ministry of Road Transport & Highways (MoRTH) barred the company and its two subsidiaries from participating in any tender process for one year, starting from October 18, 2024. As a result, PNC Infratech’s shares plummeted, currently priced at ₹366.70, reflecting an 18.71% decline in the past week and a 27% drop over the last three months. The company’s market capitalization stands at approximately ₹9,407.29 crore.
According to PNC Infratech’s exchange filing, the MoRTH has requested the company and its subsidiaries—PNC Khajuraho Highways Pvt. Ltd. and PNC Bundelkhand Highways Pvt. Ltd.—to present documents and evidence related to an FIR and charge sheet filed by the CBI in June and August of this year.
In response to the recent order, PNC Infratech has stated that its current development, construction, and operational activities will not be impacted. The company is assessing the implications of the order and will provide updates as necessary. Despite being unable to bid for central government road projects for the next year, management believes that they can still pursue tenders from other central government agencies and state authorities.
Financially, PNC Infratech reported net sales of ₹1,744.42 crore for the quarter ending June 2024, compared to ₹1,861.43 crore in the same quarter last year. However, the company’s net profit surged by 168.91% to ₹421.09 crore for the June 2024 quarter, up from ₹156.59 crore in June 2023. Its EBITDA for the same quarter also saw significant growth, reaching ₹602.10 crore, a 138.14% increase year-over-year.
Brokerage firm Nuvama has expressed concerns about the stock’s near-term pressure due to potential adverse impacts on order accretion from MoRTH. They have placed the stock “under review,” pending clarity on order wins from other government agencies. Despite these challenges, PNC’s year-to-date order inflows have been approximately ₹61 billion, resulting in a gross order book exceeding ₹210 billion, which provides revenue visibility for the next 2 to 2.5 years.
Established as a strong executor in the roads and water infrastructure segments, PNC Infratech offers comprehensive infrastructure implementation solutions, including design, engineering, procurement, construction, and operation and maintenance services under various formats.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. The content is based on publicly available information and should not be considered a recommendation to buy or sell any securities. Readers are encouraged to conduct their own research and consult with a qualified financial advisor before making any investment decisions. The author and publisher are not responsible for any losses or damages that may arise from reliance on the information provided herein.
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