RESULTS REVIEW 1QFY19 09 AUG 2018

PNC Infratech
BUY
INDUSTRY INFRASTRUCTURE On road to re-rating
CMP (as on 9 Aug 2018) Rs 165 PNCL delivered robust 1QFY19 revenues of Rs 7.1bn Highlights of the Quarter
with APAT beat of 9.7%. The run-rate translates to Rs
Target Price Rs 322  Moving to big league with Rs 150bn of order backlog:
28bn revenue for FY19E. Currently execution is going PNCL has Rs 66.2bn of order book currently under
Nifty 11,470 on Rs 66.2bn backlog and with Rs 84bn of new orders execution and Rs 84bn of orders will start revenue
Sensex 38,024 moving into execution from Oct-18E, PNCL is well contribution from 2HFY19E. Current revenue run-rate
KEY STOCK DATA poised to surprise street positively. is Rs7bn/qtr and new orders may add Rs 7-8bn/qtr on
Bloomberg PNCL IN full potential, taking quarterly revenue to Rs 15bn/qtr
Chakeri-Allahabad, Aligarh-Kanpur projects are in by 1QFY20E. PNCL conservative guidance of Rs
No. of Shares (mn) 257 advance stages of FC, expected in 2QFY19E. Mumbai 26/32bn revenue in FY19/20E doesn’t factor Rs 84bn
MCap (Rs bn) / ($ mn) 42/617 and UP State Highways EPC projects will start new order.
6m avg traded value (Rs mn) 48 contributing to revenue from Oct-18E. We estimate  Standalone B/S strong, net D/E < 0.12x, NWC day
STOCK PERFORMANCE (%) PNCL will outperform its Rs 26/32bn revenue improving: PNCL current net debt is Rs 2.4bn and NWC
52 Week high / low Rs 228/129 guidance for FY19/20E by 21/52%. days is 91 vs 113days in FY18. The debtors are 9bn of
3M 6M 12M which HAM SPV debtors is Rs 2.1bn and GST Rs 1.5bn.
PNCL earned Rs 253mn of early completion bonus
PNCL expects debtor days to come down from 113 to
Absolute (%) (1.3) (4.3) 18.2 during 1QFY19. With a strong balance sheet and 90days over next few months.
Relative (%) (8.9) (16.1) (1.4) likely monetization of existing BOT assets (3 projects
in advance stages, Rs 3.3bn of equity invested), there
 Near-term outlook: With most projects now having
SHAREHOLDING PATTERN (%) >85% land except for recent Karnataka HAM with 50%
Promoters 56.07 is enough headroom for funding the required HAM land, execution is key trigger for further re-rating. Any
FIs & Local MFs 21.84 equity of Rs 7bn. We maintain BUY with SOTP based progress on BOT monetization can lead to further
FPIs 6.16
TP of Rs 322/sh. upsides.
Public & Others 15.93 Financial Summary (Standalone)
Source : BSE Year Ending March (Rs mn) 1QFY19 1QFY18 YoY (%) 4QFY18 QoQ (%) FY17 FY18 FY19E FY20E
Net Sales 7,102 3,515 102.1 6,989 1.6 16,891 17,966 31,408 48,720
Parikshit D Kandpal EBITDA 1,041 468 122.6 1,009 3.2 2,210 2,588 4,587 7,355
[email protected] APAT 772 246 214.0 713 8.2 1,169 1,054 2,297 3,713
+91-22-6171-7317 Diluted EPS (Rs) 3.0 1.0 214.0 2.8 8.2 4.6 4.1 9.0 14.5
P/E (x) 36.2 40.2 18.4 11.4
Kunal Bhandari EV / EBITDA (x) 19.8 16.4 10.4 6.8
[email protected] RoE (%) 7.9 6.2 11.9 16.5
+91-22-6639-3035 Source: Company, HDFC sec Inst Research

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
 PNC INFRATECH : RESULTS REVIEW 1QFY19

PNCL delivered strong Standalone Quarterly Financial

1QFY19 net revenue of Rs Particulars (Rs mn) 1QFY19 1QFY18 YoY (%) 4QFY18 QoQ (%)
Net Sales 7,102 3,515 102.1 6,989 1.6
7.1bn (+102.1% YoY, +1.6%
Material Expenses (5,002) (2,384) 109.8 (4,895) 2.2
QoQ, 2.8% beat). Currently Employee Expenses (406) (264) 53.6 (376) 7.9
execution is going on Other Operating Expenses (653) (399) 63.7 (709) (7.8)
Rs66.2bn of order book EBITDA 1,041 468 122.6 1,009 3.2
Depreciation (193) (175) 10.2 (217) (11.0)
We expect significant ramp EBIT 848 293 190.0 793 7.1
up from 2HFY19E as work Other Income 432 55 685.1 666 (35.2)
will start on balance EPC Interest Cost (107) (80) 33.1 (85) 24.8
order book of Rs 84bn PBT 1,174 268 338.6 1,374 (14.6)
Tax (149) (21) 598.2 (258) (42.4)
Reported PAT 1,025 298 244.2 1,115 (8.1)
We have adjusted the
EO Items (253) (52) - (402) -
Rs253mn early completion
APAT 772 246 214.0 713 8.2
bonus and have added the Source: Company, HDFC sec Inst Research
same to 'other income'.
Other income is high due to Margin Analysis
one time machinery sales of MARGIN ANALYSIS 1QFY19 1QFY18 YoY (bps) 4QFY18 QoQ (bps)
Material Expenses % Net Sales 70.4 67.8 261 70.0 38
Rs 125mn profit as well
Employee Expenses % Net Sales 5.7 7.5 (180) 5.4 33
OPEX % Net Sales 9.2 11.4 (216) 10.1 (94)
EBITDA margin came in at
EBITDA Margin (%) 14.7 13.3 135 14.4 22
14.7% (+135 bps YoY,
Tax Rate (%) 12.7 8.0 471 18.8 (611)
+22bps QoQ). This led to
APAT Margin (%) 10.9 7.0 387 10.2 66
inline EBITDA at Rs 1.0bn
Source: Company, HDFC sec Inst Research
(+122.6% YoY, +3.2% QoQ)

Tax rate was 12.7% due to

MAT credit of Rs 94mn

New order wins include Rs

11.6bn of Karnataka HAM.
During July-18, PNCL won 3
EPC State Highways of Rs
46.2bn in UP and
Maharashtra

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 PNC INFRATECH : RESULTS REVIEW 1QFY19

We expect PNC’s order book Order Book To Multiply 1.45x Over FY18-20E EBIDTA Margins To inch up to ~15%
to multiply 1.45x over FY18- Order book (Rs mn) Revenues (Rs mn) EBITDA Margins (%) PAT Margins (%) - RHS
20E Book-to-bill ratio (x) - RHS Rs mn
165,000 8 16.0
Rs mn
14.0
Roads EPC and HAM will be 145,000 7
12.0
key drivers for order-book 125,000 6
10.0
growth 105,000 5
8.0
85,000 4
6.0
65,000 3
4.0
45,000 2
EBITDA margins may 25,000 1
2.0
increase to ~15% 5,000 0
-

FY20E
FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19E
FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19E

FY20E
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Expect FY20E Net D/E Ratio Of 0.3x Expect FY20E NWC Cycle Of 87 days
Expect PNC to add debt over Net Debt (Rs mn) Net D/E Ratio (x) - RHS Cash flow from operations - LHS NWC Cycle - RHS
FY19-20E to fund capex and 8,500 0.50 3,000 Rs mn 180
Rs mn
WC needs as execution pace 7,500 160
0.40 2,500
increases 140
6,500
2,000
0.30 120
5,500
FY20E-end net D/E ratio may 1,500 100
4,500 0.20
inch up to 0.3x 1,000 80
3,500
0.10 60
2,500 500
40
-
Expect net working capital 1,500 0 20
cycle of 87days in FY20E as 500 (0.10) -500 0
share of NHAI projects

FY17E
FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19E

FY20E

FY12

FY13

FY14

FY15

FY16

FY18

FY19E

FY20E
increase in the order book
Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Page | 3
 PNC INFRATECH : RESULTS REVIEW 1QFY19

There is no pending equity to be Strong BOT Portfolio – Value BOTs At Rs 33.4/sh (1.5x P/BV)
invested in the completed
projects. Total equity invested is  Aligarh-Ghaziabad project has been one of the key  BOT Monetization in advances stages: PNC is
pain points in PNC’s BOT portfolio. The toll negotiating with potential buyers on monetization
Rs 5.8bn (PNC share) including Rs
collection has improved to Rs 524mn in 1QFY19 of Raebareli, MP Highway & Bareli-Almora project.
1.2bn of loss funding to Aligarh-
(flat QoQ). This translates into a Rs 5.9mn/day run The total equity invested in these projects is Rs
Ghaziabad project
rate. PNCL is in advance stages of exiting the 3.3bn and debt of Rs 13bn. The same can be
project as negotiation are going on (likely in utilized for funding balance equity requirement of
PNC is looking to monetize 2HFY19E). In worst case PNCL may have to further Rs 7bn in HAM projects (Rs 600mn invested in
projects - Raebareli-Jaunpur, fund Rs 350mn towards loan repayment. Current 1QFY19 already).
Bareilly-Almora and Gwalior toll revenues are sufficient for servicing interest.
Bhind which could happen by  Toll collections have been better than expected in
4QFY19E  Raebareli-Jaunpur annuity project: PNC received Kanpur Ayodhya, Kanpur Kabrai and Aligarh
COD for the Raebareli-Jaunpur BOT project on Ghaziabad project. MP Highway was lower due to
March 8, 2016. The project had achieved COD partial shutdown of Narmada bridge (not part of
Narela project arbitration in
three months ahead of the June-16 deadline. The PNCL). The damage has been corrected and traffic
advance stages final outcome is
subsidiary has received Rs 337mn as bonus in has now improved. We have valued PNC’s BOT
expected by Sep-18E
1QFY19 (PNC’s share Rs 253mn). portfolio at Rs 33.4/sh (1.5x P/BV).

PNC Equity Project NPV (PNCL Per share

PNC Stake Implied P/B
Project WACC (%) Invested Value (Rs Share) INR value
Rs 7bn is the pending equity to (%) (x)
(INR mn) mn) mn (Rs/sh)
be invested in the HAM portfolio Bareilly-Almora-Bagheshwar 100.0 13.5 750 567 567 2.2 0.8
over next 2-3yrs Kanpur-Kabrai 100.0 13.5 675 3,038 3,038 11.8 4.5
Gwalior Bhind 100.0 13.5 780 1,728 1,728 6.7 2.2
PNC’s total asset portfolio is Aligarh-Ghaziabad 35.0 13.5 1,860 (1,796) (629) (2.5) (0.3)
valued at Rs 33.4/sh Raebareli-Jaunpur 100.0 13.5 1,395 768 768 3.0 0.6
Narela Industrial Estate 100.0 13.5 350 971 971 3.8 2.8
Kanpur-Ayodhya 100.0 13.5 - 2,131 2,131 8.3 -
Total 5,810 7,407 8,574 33.4 1.5
Source: Company, HDFC sec Inst Research

Page | 4
 PNC INFRATECH : RESULTS REVIEW 1QFY19

Key Assumptions And Estimates (Standalone)

After an already robust FY18
order book we estimate >Rs Key Assumptions FY19E FY20E Comments
~73bn of annual inflows of Closing order book 148,635 154,892 After an already robust FY18 order book we estimate >Rs ~55bn of annual inflows
which PNCL has already Order book growth (%) 39.2 4.2
received Rs 55bn and New order booking 73,303 54,977
balance Rs 20-25bn is Book to bill ratio 4.7 3.2 Book to bill to reduce as execution improves
expected in 9MFY19E FY18-20E revenue CAGR 64.7% led by major projects moving into execution and
Total Revenue 31,408 48,720
land acquisition issues ironed out
Growth (%) 74.8 55.1
FY18-20E revenue CAGR
EBIDTA 4,587 7,355 FY18-20E EBIDTA CAGR of 68.6% with margin improvement
64.7% led by major projects
EBIDTA margin (%) 14.6 15.1 Margins to increase to 15% due to project mix and operating leverage
moving into execution and
Depreciation 981 1,188
land acquisition issues Borrowing cost to grow at 82.8% FY18-20E CAGR to meet working capital demand
ironed out Financial Charges 571 1,026
as execution improves
Higher in FY19E due to Rs 253mn of bonus in Raebareli project and Rs 125mn of
Other Income (Including EO Items) 661 241
profit on sale of old machinery
EBITDA margins to increase PBT 3,696 5,382
to 15% due to project mix PBT margin (%) 11.8 11.0 PBT margins to decline on back of higher finance cost
Tax savings to reduce on account of MAT credit reduction and no tax holiday on
and operating leverage Tax 665 1,238
new projects won
Tax rate (%) 18.0 23.0 Tax rate as per PNCL guidance
We have also factored in RPAT 3,030 4,144
31% tax impact so difference We have also factored in 31% tax impact so difference in P&L tax provisioning is
in P&L tax provisioning is EO Items (incld. MAT savings) (734) (431)
factored here to arrive at adjusted PAT at 31% tax rate
factored here to arrive at APAT 2,297 3,713 APAT after adjusting for full tax rate
adjusted PAT at 31% tax Net margin (%) 7.3 7.6
rate Gross Block Turnover 3.7 4.7 Improvement on account of new orders inflow
Debtor days 106 100 May improve as NHAI share increase in order book
Capex spend may increase CFO - a 133 2,639
Higher revenue growth, robust client advance to result in higher positive cash flow
to Rs 2.3bn on account of from operations in FY20E
CFI - b (4,109) (4,159)
the recently won packages
FCF - a+b (3,976) (1,519)
in UP and Maharashtra
CFF - c 3,327 1,232
Total change in cash - a+b+c (649) (287)
We expect >Rs 5.5bn
Source : HDFC sec Inst Research
investments in HAM over
FY19-20E

Page | 5
 PNC INFRATECH : RESULTS REVIEW 1QFY19

We value PNC on 10x one Outlook and valuation

year forward EV/EBIDTA in Maintain BUY with a TP of Rs 322/sh
line with the implied 10x  We value PNC on 10x one year forward EV/EBIDTA in project cost) leading to EBIDTA margin expansion, (3)
multiple for peers line with the implied 10x multiple for peers. Our likely support from the captive order book in lieu of
rationale for the same is (1) a robust order book of Rs any contraction in future roads EPC orders and (4) PNC
157.5bn incl. Purvanchal and Mumbai Nagpur packages is looking to monetize current BOT portfolio (Rs 5.8bn
We value standalone EPC (5), (2) A strong balance sheet (FY18 standalone net of invested equity) this may part fund Rs 7.5bn of HAM
business at Rs 266/sh D/E <0.1x), and (3) high share of NHAI HAM roads in equity requirement
the order book will result in lower working capital
 We have valued PNC’s toll projects using 13.5%
demand, as these projects have provision of
discount rate for arriving at NPV of the projects. We
mobilization advances.
value the BOT business at Rs 33/sh (1.5x of PNC
We value PNC’s BOT  A faster than expected pace of recent projects moving
invested equity).
portfolio at Rs 33/share into execution may result in further stock re-rating as
(1.5x invested equity) PNC has (1) a diversified presence in roads and  We maintain BUY with a SOTP based TP of Rs 322/sh.
dedicated freight corridor, and a key beneficiary of We value the (1) Standalone EPC business at Rs
upcoming Rs 2tn of roads awards in UP over next 4- 266/share (10x one-year forward Mar-20E EBIDTA),
5yrs, (2) strong execution capability, which provides (2) BOT projects at Rs 33/share and (3) HAM
scope for earning early completion bonus (3-6% of cumulative equity investment till FY20E at Rs 23/sh.
We value HAM projects at
1x P/BV of cumulative
equity investment till FY20E SOTP Valuation
Valuation Mar-20E Multiple Valuation Value per
Segment Comment
Methodology EBIDTA (x) (INR mn) Share (INR)
Mar-20E EV/ We have reduced FY19E
Standalone construction - EPC 7,355 10 68,173 266
EBIDTA standalone net debt
We maintain BUY with a TP BOT Value FCFE Mar-20E 8,574 33
of Rs 322/sh 1x P/BV cumulative equity
HAM Equity investment 5,800 23
investment till FY20E
SOTP Value 82,548 322
Source: HDFC sec Inst Research

Page | 6
 PNC INFRATECH : RESULTS REVIEW 1QFY19

Peer Set Comparison: Core EPC

MCap CMP TP Adj. EPS (Rs/sh) P/E (x) EV/EBITDA (x) ROE (%)
COMPANY RECO
(Rs bn) (Rs) (Rs) FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E
Dilip Buildcon 112.8 825 BUY 1,434 46.5 63.1 68.5 16.9 12.4 11.5 9.6 7.8 6.2 14.6 14.4 14.6
IRB Infra Developers 70.1 200 BUY 328 22.6 29.1 26.7 3.7 4.4 3.4 3.7 3.8 3.1 30.3 25.3 30.9
NCC 60.1 100 BUY 159 5.2 5.8 7.7 17.4 15.4 11.6 8.6 8.0 6.7 4.2 3.5 3.8
Sadbhav Engineering 47.8 279 BUY 438 12.9 15.4 16.6 10.4 8.7 8.0 9.1 7.0 5.5 11.8 12.5 12.0
PNC Infratech 42.4 165 BUY 322 4.1 8.7 10.5 26.6 11.0 7.4 10.9 7.3 4.9 6.2 13.2 16.9
Ashoka Buildcon 40.4 144 BUY 348 (5.9) 6.5 7.4 7.9 7.7 7.6 6.4 6.2 5.8 12.8 12.3 11.1
KNR Constructions 33.2 236 BUY 385 13.6 11.5 13.8 12.5 14.8 11.2 6.6 6.8 5.3 18.7 12.8 14.4
ITD Cementation* 24.2 141 BUY 211 6.1 10.8 12.3 23.0 15.6 12.0 10.3 7.2 6.1 16.2 17.9 16.8
Ahluwalia Contracts 21.6 322 BUY 486 17.3 22.2 25.3 17.9 13.9 12.2 9.0 7.3 6.2 20.5 21.4 19.9
J. Kumar Infraprojects 17.8 236 BUY 415 18.1 22.2 27.7 13.1 10.6 8.5 7.1 5.4 4.8 9.4 10.7 12.2
JMC Projects 18.3 545 BUY 844 31.6 33.4 39.9 13.3 12.6 10.5 7.0 6.6 5.6 14.4 13.3 14.0
PSP Projects 17.3 482 BUY 639 18.0 27.7 35.5 26.7 17.4 13.6 14.9 9.8 7.3 31.7 28.4 28.2
HG Infra 15.9 245 NR NR 12.9 19.6 24.7 18.9 12.5 9.9 8.8 5.7 4.7 23.5 21.1 21.5
Average (Core EPC) 15.6 21.2 24.4 16.0 12.1 9.8 8.6 6.8 5.5 16.5 15.9 16.6
th
Source: Company, HDFC sec Inst Research *ITD Cementation FY19E/FY20E should be read as 15MFY19E/FY20E, 8 August 2018 Prices

We have increased FY19E

capex from Rs 1.5bn earlier Change in estimates (Standalone)
to Rs 2.2bn on account of FY19E FY19E FY20E FY20E
Rs mn % Change % Change
the recent state EPC wins in New Old New Old
UP and Maharashtra.. Revenues 31,408 31,408 (0.0) 48,720 48,720 -
As a result APAT for EBIDTA 4,587 4,587 (0.0) 7,355 7,355 -
FY19/20E has been revised EBIDTA Margins (%) 14.6 14.6 (0.0) 15.1 15.1 -
downwards to factor in the APAT 2,297 2,549 (9.9) 3,713 3,769 (1.5)
increased depreciation. Source: HDFC sec Inst Research

Page | 7
 PNC INFRATECH : RESULTS REVIEW 1QFY19

Income Statement (Standalone) Balance Sheet (Standalone)

Year ending March (Rs mn) FY16 FY17 FY18 FY19E FY20E As at March (Rs mn) FY16 FY17 FY18 FY19E FY20E
Net Revenues 20,142 16,891 17,966 31,408 48,720 SOURCES OF FUNDS
Growth (%) 29.0 (16.1) 6.4 74.8 55.1 Share Capital - Equity 513 513 513 513 513
Material Expenses 15,387 12,408 12,242 21,996 34,347 Reserves 13,271 15,209 17,554 20,101 23,762
Employee Expenses 836 1,003 1,240 1,653 2,000 Total Shareholders Funds 13,784 15,722 18,067 20,614 24,275
Other Operating Expenses 1,260 1,270 1,896 3,172 5,018 Long Term Debt 60 576 1,286 794 794
EBITDA 2,660 2,210 2,588 4,587 7,355 Short Term Debt 59 1,115 414 5,286 7,786
EBITDA Margin (%) 13.2 13.1 14.4 14.6 15.1 Total Debt 119 1,691 1,700 6,080 8,580
EBITDA Growth (%) 22.8 (16.9) 17.1 77.2 60.3 Net Deferred Taxes (30) (23) (20) (23) (23)
Depreciation 570 533 772 981 1,188 Long Term Provisions & Others 1,596 1,675 1,699 1,515 1,441
EBIT 2,089 1,677 1,816 3,606 6,167 TOTAL SOURCES OF FUNDS 15,469 19,065 21,445 28,187 34,274
Other Income (Including EO Items) 253 466 830 661 241 APPLICATION OF FUNDS
Interest 399 203 307 571 1,026 Net Block 2,125 3,479 4,064 5,326 5,538
PBT 1,943 1,939 2,339 3,696 5,382 CWIP 19 78 111 111 111
Tax (Incl Deferred) (402) (158) (171) 665 1,238 Investments 4,644 4,676 4,948 7,476 10,476
RPAT 2,345 2,097 2,510 3,030 4,144 Other Non-current Assets 2,397 4,297 4,663 5,860 5,953
EO Items (incld. MAT savings) (810) (927) (1,457) (734) (431) Total Non-current Assets 9,185 12,530 13,786 18,773 22,078
APAT 1,535 1,169 1,054 2,297 3,713 Inventories 2,364 1,535 1,758 3,012 4,672
APAT Growth (%) 60.9 (23.9) (9.9) 117.9 61.7 Debtors 3,763 6,309 6,900 9,121 13,348
Adjusted EPS (Rs) 6.0 4.6 4.1 9.0 14.5 Other Current Assets 2,589 3,187 3,927 5,665 8,590
EPS Growth (%) 60.9 (23.9) (9.9) 117.9 61.7 Cash & Equivalents 971 355 1,473 823 536
Source: Company, HDFC sec Inst Research Total Current Assets 9,686 11,385 14,057 18,621 27,145
Creditors 942 2,369 4,628 4,733 8,009
Other Current Liabilities & Provns 2,460 2,480 1,771 4,475 6,941
Total Current Liabilities 3,402 4,849 6,399 9,207 14,950
Net Current Assets 6,284 6,536 7,658 9,414 12,195
TOTAL APPLICATION OF FUNDS 15,469 19,065 21,445 28,187 34,274
Source: Company, HDFC sec Inst Research

Page | 8
 PNC INFRATECH : RESULTS REVIEW 1QFY19

Cash Flow (Standalone) Key Ratios (Standalone)

Year ending March (Rs mn) FY16 FY17 FY18 FY19E FY20E FY16 FY17 FY18 FY19E FY20E
Reported PBT 2,004 1,939 2,339 3,696 5,382 PROFITABILITY (%)
Non-operating & EO items (100) 26 (830) (661) (241) GPM 23.6 26.5 31.9 30.0 29.5
EBITDA Margin 13.2 13.1 14.4 14.6 15.1
Interest expenses 249 (150) 307 571 785
APAT Margin 7.6 6.9 5.9 7.5 8.5
Depreciation 525 533 772 981 1,188
RoE 14.6 7.9 6.2 12.2 16.6
Working Capital Change (1,467) (2,599) (345) (3,788) (3,236)
RoIC (or Core RoCE) 25.6 12.9 13.0 14.9 20.4
Tax Paid - 164 171 (665) (1,238) RoCE 19.7 13.4 14.0 14.0 15.8
OPERATING CASH FLOW ( a ) 1,210 (86) 2,414 133 2,639 EFFICIENCY
Capex (394) (1,895) (1,390) (2,243) (1,400) Tax Rate (%) (20.7) (8.1) (7.3) 18.0 23.0
Free cash flow (FCF) 817 (1,981) 1,024 (2,109) 1,239 Fixed Asset Turnover (x) 4.7 2.8 2.4 3.3 4.4
Investments (325) 268 (272) (2,528) (3,000) Inventory (days) 43 33 36 35 35
Non operating income - - 830 661 241 Debtors (days) 68 136 140 106 100
INVESTING CASH FLOW ( b ) (719) (1,627) (832) (4,109) (4,159) Other Current Assets (days) 47 69 80 66 64
Payables (days) 17 51 94 55 60
Debt Issuance/(Repaid)/ (3,411) 1,411 9 4,380 2,500
Other Current Liab & Provns
Interest Expenses (332) (153) (307) (571) (785) 45 54 36 52 52
(days)
FCFE (2,927) (722) 726 1,700 2,954 Cash Conversion Cycle (days) 96 134 126 100 87
Share Capital Issuance 4,172 - - 0 0 Debt/EBITDA (x) 0.0 0.8 0.7 1.3 1.2
Dividend (161) (161) (166) (482) (483) Net D/E (x) (0.06) 0.09 0.0 0.3 0.3
FINANCING CASH FLOW ( c ) 267 1,097 (465) 3,327 1,232 Interest Coverage (x) 5.2 8.3 5.9 6.3 6.0
NET CASH FLOW (a+b+c) 759 (616) 1,117 (649) (287) PER SHARE DATA (Rs)
Closing Cash & Equivalents 971 355 1,472 823 536 EPS 6.0 4.6 4.1 9.2 14.5
CEPS 11.4 10.3 12.8 15.5 20.8
Source: Company, HDFC sec Inst Research
Dividend 2.5 0.5 1.5 1.5 1.5
Book Value 53.7 61.3 70.4 80.2 94.5
VALUATION
P/E (x) 27.6 36.2 40.2 18.4 11.4
P/BV (x) 3.1 2.7 2.3 2.1 1.7
EV/EBITDA (x) 15.6 19.8 16.4 10.4 6.8
EV/Revenues (x) 2.1 2.6 2.4 1.5 1.0
OCF/EV (%) 2.9 (0.2) 5.7 0.3 5.2
FCF/EV (%) 2.0 (4.5) 2.4 (4.4) 2.5
FCFE/Mkt Cap (%) (6.9) (1.7) 1.7 4.0 7.0
Dividend Yield (%) 1.5 0.3 0.9 0.9 0.9
Source: Company, HDFC sec Inst Research

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 PNC INFRATECH : RESULTS REVIEW 1QFY19

RECOMMENDATION HISTORY
Date CMP Reco Target
PNC Infratech TP
21-Aug-17 145 BUY 168
330 11-Oct-17 147 BUY 194
16-Nov-17 179 BUY 203
280 12-Jan-18 198 NEU 213
12-Apr-18 178 BUY 248
230
14-Apr-18 176 BUY 248
180 25-May-18 168 BUY 250
10-Jul-18 152 BUY 322
130 9-Aug-18 165 BUY 322

80 Rating Definitions
Apr-18
Sep-17

Feb-18

Jun-18

Jul-18
Mar-18
Dec-17
Oct-17
Aug-17

Aug-18
Nov-17

Jan-18

May-18

BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

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 PNC INFRATECH : RESULTS REVIEW 1QFY19

Disclosure:
We, Parikshit Kandpal, MBA and Kunal Bhandari, ACA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the
subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly
related to the specific recommendation(s) or view(s) in this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have
beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities
Ltd. or its associate does not have any material conflict of interest.
Any holding in stock –No
HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.

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 PNC INFRATECH : RESULTS REVIEW 1QFY19

HDFC securities
Institutional Equities
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Senapati Bapat Marg, Lower Parel, Mumbai - 400 013
Board : +91-22-6171 7330www.hdfcsec.com
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