CMP (NSE) 15:59, 21 Sep
Last updated on
05 Jul, 2021
Increase in Government spending on Infrastructure: India is expected to become the third largest construction market by 2022. Only 24% of the National Highway network in India is four-lane and therefore presents and immense scope for improvement. The Government plans to invest about ₹ 102 lakh crore on infrastructure projects by 2024-2025. In Budget 2021, the Government of India announced the allocation of ₹ 1.18 lakh crore towards road transport and highway sector. Further, 84% of the total revenue of PNC Infratech is from EPC projects and 89% of the order-book is constituted by Road EPC Projects as on FY21.
Revenue growth driven by healthy order book: PNC Infratech saw a revenue growth of 42% yoy in Q4FY21. Even with lockdowns in most parts of the country, the company was able to grow its revenue marginally driven by large order execution. PNC Infratech’s under execution order book stood at ₹ 116.5bn (2.3X book to bill), which goes up to ₹ 16.6bn (3X book to bill) if accounted for the two EPC road project and seven EPC water projects. The management expects order inflow of ₹ 80-90bn in FY22 wherein bids for eleven EPC projects and three HAM projects are already submitted, which are worth ₹ 45bn and ₹ 35bn respectively. PCOD was received of 4 HAM projects of which 3 were received in June 2021; PCOD for another 2 HAM projects are expected in FY22.