Target: ₹257

CMP: ₹212.75

After two years of decline in execution, PNC Infratech is likely to witness a gradual recovery from FY27, supported by ramp-up across key hybrid annuity model (HAM) projects, new order-wins and contribution from solar and mining businesses.

Q4FY26 standalone revenue remains flat year on year at ₹1,460 crore, dragged by slower execution in select road, HAM and irrigation projects. PAT fell 17 per cent to ₹100 crore, primarily due to lower operating profitability and absence of one-off gains seen in the base period. The management expects execution momentum to improve over FY27. EBITDA margin guidance remains at about 12 per cent, although near-term profitability could drag given commodity volatility and elevated input cost.

The company is witnessing gradual diversification beyond roads, with mining execution scaling up and solar & BESS projects expected to start contributing from FY27 (combined portfolio of ₹5,000 crore). Following completion of the PNC Challakere, the company has monetised 12 road assets with an equity value of ₹2,520 crore vs ₹1,740 crore invested, implying valuation of 1.4x P/BV.

While order pipeline, healthy balance sheet and new project opportunity landscape remain supportive, near-term execution and margin trajectory depend on timely mobilisation and stabilisation in commodity prices. We cut FY27E earnings by 11 per cent and retain them for FY28. We introduce FY29E. We maintain Accumulate with an unchanged TP of ₹257 on 13x FY28E P/E.

Published on May 25, 2026