RESULTS REVIEW 4QFY16

31 MAY 2016

PNC Infratech
BUY
INDUSTRY

INFRASTRUCTURE

CMP (as on 31 May 16)

Rs 568

Target Price

Rs 660

Nifty

8,160

Sensex

26,668

KEY STOCK DATA

Bloomberg

PNCL IN

No. of Shares (mn)

51

MCap (Rs bn) / ($ mn)

29/434

6m avg traded value (Rs mn)

16

STOCK PERFORMANCE (%)

52 Week high / low

Rs 613/352
3M

6M

12M

Absolute (%)

19.1

7.0

42.1

Relative (%)

3.2

5.0

46.2

SHAREHOLDING PATTERN (%)

Promoters

56.07

FIs & Local MFs

15.70

FIIs

13.01

Public & Others

15.22

Source : BSE

Parikshit D Kandpal
[Link]@[Link]
+91-22-6171-7317
Prabhat Anantharaman
[Link]@[Link]
+91-22-6171-7319

Robust execution
PNC Infratech (PNC) reported strong 4QFY16
numbers, led by 12.9% higher-than-expected
revenue. Adjusting for multiple one-offs/exceptional
items, APAT grew 122% YoY.
PNCs cumulative FY16, NHAI/MORTH EPC order
inflow value is 2.2% higher than the NHAIs project
cost. For the sector as a whole, FY16 order inflow
value is 7.9% lower than the NHAI/MORTH cost. PNC
stacks amongst top players in the list, with the
highest positive difference vs. project cost. This gives
us comfort on EBIDTA margin guidance of 13-13.5%.
The early-completion bonus for the Agra-Lucknow
Expressway may add Rs 1bn to PBT in FY18E.
PNC bagged new orders of Rs 39.7bn during FY16 and
guided for Rs 50bn of inflows in FY17E. With a strong
state/NHAI roads pipeline, PNC is well placed to
achieve this guidance. Maintain BUY. Increase TP to
Rs 660/sh (vs. Rs 625/sh earlier).

Highlights of the Quarter

Strong balance sheet, net D/E at -0.07x: Despite

an uptick in the execution cycle, FY16 debtors

reduced to 68days (vs. 86 in FY15) and inventory
to 43 days vs. 52 in FY15. This resulted in a cash
conversion cycle of 135 days for FY16 vs. 153 as of
end-FY15. The balance sheet was healthy with net
D/E of -0.07x end-FY16 and net cash of Rs 910mn.
Robust BOT traffic growth, value at 1.6x P/BV:
PNCs FY16 BOT toll collections grew 42% YoY in
the Gwalior-Bhind project and 20% YoY in the
Kanpur-Ayodhya OMT project. We have upgraded
the value of BOTs to Rs 146/sh (vs. Rs 130/sh).
This is largely on account of high traffic growth.
Near-term outlook: With (1) A strong ordering
potential in its home location, (2) Ramp-up in BOT
traffic, (3) A healthy B/S, and (4) Better-than-peers
EBIDTA margins, PNC is well placed to ride the
cyclical recovery. We remain positive.

Financial Summary (Standalone)

Year Ending March (Rs mn)
Net Sales
EBITDA
APAT
Diluted EPS (Rs)
P/E (x)
EV / EBITDA (x)
RoE (%)

4QFY16
5,887
768
728
14.2

4QFY15
4,643
611
328
6.4

YoY (%)
26.8
25.7
121.9
121.9

3QFY16
5,215
679
325
6.3

QoQ (%)
12.9
13.1
124.3
124.3

FY15
15,610
2,166
954
18.6
30.5
15.0
14.2

FY16
20,142
2,660
1,618
31.5
18.0
10.6
15.6

FY17E
22,692
3,014
1,596
31.1
18.3
9.9
11.1

FY18E
27,798
3,661
1,760
34.3
16.6
8.6
11.0

Source: Company, HDFC sec Inst Research

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

PNC INFRATECH : RESULTS REVIEW 4QFY16

Standalone Quarterly Financial

PNC 4QFY16 net
revenues/EBITDA/APAT was
12.9/9.7/124% above our
estimates
APAT was aided by MAT
reversal and higher other
income (profit through sale
of Jaora Nayagaon - ~Rs
97.3mn)
EBITDA margins remained
stable at ~13%
FY16 order inflows stood at
Rs 39.7bn and FY16-end
order book is Rs 55.4bn
excluding L1 of Rs 2.6bn

On a standalone basis, PNC

has become net debt-free
with gross debt of Rs 60mn
and cash of Rs 9.7bn

Particulars (Rs mn)

Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Depreciation
EBIT
Other Income (Incl EO Items)
Interest Cost
PBT
Tax
Reported PAT
EO Items
APAT

4QFY16
5,887
(4,176)
(214)
(729)
768
(144)
625
924
(89)
1,460
77
1,537
(810)
728

4QFY15
4,643
(3,420)
(236)
(375)
611
(106)
505
76
(109)
471
(143)
328
328

YoY (%)
26.8
22.1
(9.6)
94.2
25.7
35.4
23.7
1,120.2
(19.1)
209.8
(153.9)
368.8
121.9

3QFY16
5,215
(3,861)
(219)
(456)
679
(139)
540
35
(81)
495
(170)
325
325

QoQ (%)
12.9
8.2
(2.5)
60.0
13.1
3.5
15.6
2,504.1
9.5
195.0
(145.3)
373.7
124.3

FY16
20,142
(14,683)
(836)
(1,963)
2,660
(525)
2,135
1,011
(332)
2,814
(386)
2,427
(810)
1,618

FY15
15,610
(11,355)
(737)
(1,352)
2,166
(364)
1,803
138
(462)
1,478
(475)
1,004
(49)
954

YoY (%)
29.0
29.3
13.4
45.2
22.8
44.3
18.4
631.6
(28.1)
90.3
(18.6)
141.9
69.5

Source: Company, HDFC sec Inst Research

Margin Analysis
Material Expenses % Net Sales
Employee Expenses % Net Sales
Other Operating Expenses % Net
Sales
EBITDA Margin (%)
Tax Rate (%)
APAT Margin (%)

4QFY16
70.9
3.6

4QFY15 YoY (bps)

73.7
(272)
5.1
(146)

3QFY16 QoQ (bps)

74.0
(310)
4.2
(57)

FY16
72.9
4.1

FY15 YoY (bps)

72.7
16
4.7
(57)

12.4

8.1

430

8.7

365

9.7

8.7

109

13.0
(5.3)
12.4

13.2
30.4
7.1

(11)
(3,571)
530

13.0
34.4
6.2

3
(3,972)
614

13.2
13.7
8.0

13.9
32.1
6.1

(67)
(1,839)
192

Source: Company, HDFC sec Inst Research

Page | 2

PNC INFRATECH : RESULTS REVIEW 4QFY16

8.0
6.0
4.0
2.0

Source: Company, HDFC sec Inst Research

Source: Company, HDFC sec Inst Research

Expect FY18E Net D/E Ratio Of 0.13x

Expect FY18E NWC Cycle Of 163 days

Net Debt (Rs mn)

Cash flow from operations - LHS

Net D/E Ratio (x) - RHS

FY18E

FY17E

FY16

FY15

FY18E

FY17E

FY16

FY15

FY14

FY13

FY12

5,000

10.0

FY14

12.0

FY13

25,000

Rs mn

FY12

PAT Margins (%) - RHS

14.0

FY11

45,000

16.0

FY10

NWC Cycle - RHS

Rs mn

0.60

2,500

0.50

2,000

160

0.40

1,500

140

2,500

0.30

1,000

2,000

0.20

500

0.10
-

Source: Company, HDFC sec Inst Research

60

-500

40
0

FY18E

-1,500

FY17E

20

(0.20)

FY16

-1,000

FY15

(0.10)

FY14

FY18E

FY17E

FY16

FY15

500

100

FY13

1,000

180

80

FY12

1,500

Rs mn

120

FY11

3,000

FY10

3,500

FY14

Expect FY18E net working

capital cycle of 163 days and
cash flow from operations to
improve to Rs 343mn

65,000

FY13

Expect PNC to add debt over

FY16-18E to fund its HAM
portfolio. However, FY18Eend net debt is estimated at
Rs 2.3bn and net D/E ratio of
0.13x

FY12

EBITDA and PAT margins to

remain at 13-13.5% and 66.5% over FY16-18E

EBITDA Margins (%)

Rs mn

FY11

The management has

guided for Rs 50bn order
intake in FY17E

EBIDTA Margins To Remains Stable At 13.2%

Revenues (Rs mn)

Book-to-bill ratio (x) - RHS

FY11

PNC is looking to bid for Rs

80bn HAM, Rs 200bn EPC in
FY17E

Order book (Rs mn)

FY10

Roads EPC and HAM will be

the key drivers for orderbook growth

Order Book To Multiply 2x Over FY16-18E

FY10

We expect PNCs order book

to multiply 2x over FY16-18E

Source: Company, HDFC sec Inst Research

Page | 3

PNC INFRATECH : RESULTS REVIEW 4QFY16

PNC has achieved Rs 3.8bn

toll revenue for FY16 vs. our
estimate of Rs 3.6bn
The Aligarh-Ghaziabad
project toll collection has
been sharply lower (Rs 4mn)
vs. estimates (Rs 9mn). Postoverloading charge
collection and achievement
of full COD, toll collection
may improve to Rs
6.5mn/day by Jul-16E

There is no pending equity

to be invested in the
projects. Total equity
invested is Rs 4.6bn (PNC
share)
PNC has monetized 8.5%
stake in Jaora Nayagaon for
a consideration of Rs
341.5mn. PNC recorded Rs
97.3mn PBT during 4QFY16

PNCs total asset portfolio is

valued at Rs 146/sh (vs.
earlier value of Rs 130/sh)

Strong BOT portfolio Value BOTs at Rs 146/sh (1.6x P/BV)

PNCs FY16 BOT toll collections grew 42% YoY in

the Gwalior-Bhind project and 20% YoY in the

Kanpur-Ayodhya OMT project. PNC has recorded
FY16 toll revenue of Rs 3.8bn vs. our estimate of
Rs 3.6bn.

Aligarh-Ghaziabad project has been one of the

key pain points in PNCs BOT portfolio. Against Rs
9mn/day of tolling estimate, the actual 4QFY16
collection stood at Rs 0.4mn/day. The shortfall in
is expected to contract after the installation of the
Weigh Bridge. Collection of overloading charges,
expected to start by mid-June-16, would add
about another Rs 0.8mn/day.

Full COD (currently tolling is for 103/126km) is

expected by Jul-16E, which is likely to add another

Rs 1.2mn/day in collection. This will take the total
collection/day to Rs 6-6.5mn/day. Breakeven
interest cost is Rs 5mn/day collections.

Project

PNC Stake
(%)

WACC (%)

100.0
100.0
100.0
35.0
100.0
100.0
100.0

13.5
13.5
13.5
13.5
13.5
13.5
13.5

Bareilly-Almora-Bagheshwar
Kanpur-Kabrai
Gwalior Bhind
Aligarh-Ghaziabad
Raebareli-Jaunpur
Narela Industrial Estate
Kanpur-Ayodhya
Total

Raebareli-Jaunpur annuity project: PNC received

COD for the Raebareli-Jaunpur BOT project on

March 8, 2016. The project has achieved COD
three months ahead of the June-16E deadline. The
management expects to receive three months
partial semi-annuity of Rs 340mn as bonus by Dec16E, along with semi annuity.

Bareli-Almora project: Tolling started in 3QFY16.

At present, the collection is Rs 1.1mn/day vs. Rs
1.4mn/day estimates. PNC expects to charge
overloading and traffic leakage by 2QFY17E. This
may result in collections reaching Rs 1.4mn/day.

Other BOTs: The collections at PNCs other BOTs

Kanpur-Kabrai, Kanpur-Ayodhya and GwaliorBhind - are higher than estimates. We have

valued PNCs BOT portfolio at Rs 146/share
(previous Rs 130/share). The increase is on
account of a valuation upgrade for the above
projects.

PNC Equity
Invested
(INR mn)
750
675
780
679
1,395
350
4,629

Project
Value (Rs
mn)
1,038
2,238
1,134
1,645
646
789
1,056
8,546

NPV (PNCL
Share) INR
mn
1,038
2,238
1,134
576
646
789
1,056
7,477

Per share
Implied P/B
value
(x)
(Rs/sh)
20
1.4
44
3.3
22
1.5
11
0.8
13
0.5
15
2.3
21
146
1.6

Source: Company, HDFC sec Inst Research

Page | 4

PNC INFRATECH : RESULTS REVIEW 4QFY16

We expect 40.8% FY16-18E

order backlog CAGR

FY16-18E revenue CAGR

17.5%, EBIDTA CAGR 17.3%

EBIDTA margins to be
maintained in the 13-14%
range

Key Assumptions And Estimates (Standalone)

Key Assumptions (Rs mn)

FY15

FY16E

FY17E

Closing Order Book

35,642

55,370

79,833

Order Book Growth (%)

New Order Booking
Book-to-bill Ratio

27.5
18,490
2.3

55.4
39,720
2.7

44.2
47,156
3.5

Total Revenue

15,610

20,142

22,692

Growth (%)
EBIDTA
EBIDTA Margin (%)
Depreciation
Financial Charges
Other Income (inc EO)

35.5
2,166
13.9
364
462
138

29.0
2,660
13.2
525
332
1,011

12.7
3,014
13.3
589
407
135

PBT

1,478

2,814

2,152

PBT Margin (%)

Tax

9.5
475

14.0
386

9.5
517

Tax Rate (%)

32.1

13.7

24.0

APAT
Net margin (%)
Gross Block Turnover

954
6.1
4.7

1,618
8.0
4.9

1,596
7.0
4.7

86

68

90

632

517

(235)

(1,648)

(904)

(1,050)

FCF - a+b
(1,016)
CFF c
229
Total Change In Cash (788)
a+b+c
Source : HDFC sec Inst Research

(386)
592

(1,285)
2,385

206

1,100

Debtor Days
CFO a
CFI b

FY18E Comments
We expect 40.8% FY16-18E order backlog CAGR on back of strong
109,808
NHAI & State EPC roads/irrigation pipeline
37.5
57,773
4.0 Book-to-bill ratio to improve on new orders wins
Strong order book accretion to result in FY16-18E revenue CAGR of
27,798
17.5%
22.5
3,661 FY16-18E EBIDTA CAGR of 17.3%
13.2 Margins to remain in the 13-13.5% range
695
428 Borrowing cost to grow in line with revenue at 13.5% FY16-18E CAGR
143
FY16-18E PBT CAGR of -2.4%. This de-growth on account of higher
2,681
other income during FY16
9.6 PBT margins to remain stable
884.6
PNC to move to full taxation from FY18E as MAT benefit expires for
33.0
projects won after 1 April 2017
1,760 FY16-18E APAT CAGR of 4.3%
6.3 Net margins to remain stable
4.8 Improvement on account of new order inflow
May marginally deteriorate on account of NHAI new orders being
90
milestone payment based
343
We have assumed PNC to take one hybrid annuity project of Rs 10bn
(1,500) in FY17E. Total outgo on equity will be Rs 1.8bn, cumulative can be
met by internal accruals
(1,157)
122
(1,035) Net cash position doesnt change debt materially

Page | 5

PNC INFRATECH : RESULTS REVIEW 4QFY16

FY16-18E revenue CAGR of

19.4%

This will be driven by toll

revenue CAGR of 28.8% and
EPC revenue CAGR of 17.5%

FY16-18E EBIDTA CAGR of

32.1% largely driven by toll
EBIDTA CAGR of 56.2% and
EPC EBIDTA CAGR of 17.3%

With most of the BOT

projects turning profitable
from FY18E, FY16-18E net
profit is expected to multiply
1.5x

Net cash position to remain

strong

Key Assumptions And Estimates (Consolidated)

Key Assumptions (Rs mn)
Income

FY15

FY16P

FY17E

Toll Revenue

2,394

3,808

5,668

Construction Revenue

16,215

20,138

22,692

Total Revenue
Growth (%)
EBIDTA (Toll)
EBIDTA (Construction)
EBIDTA Margin Toll (%)
EBIDTA Margin Construction
(%)
Total EBIDTA
EBIDTA Margin
Depreciation
Financial Charges
PBT
PBT Margin (%)
Tax
Tax Rate (%)
Minority/Profit from Asso/EO.
APAT
Net Margin (%)

18,609
36.8
633
2,166
26.4

23,946
28.7
1,414
2,660
37.1

28,360
18.4
3,051
3,014
53.8

13.4

13.2

13.3

2,799.0
15.0
603
925
1,392
7.5
479
34.4
0.0
913
4.9

4,073.4
17.0
1,091
1,287
2,676
11.2
384
14.3
(944.7)
1,347
5.6

FY18E Comments
Toll revenue excludes Aligarh-Ghaziabad. Full-year revenue impact of
6,314 toll & annuity projects to reflect from FY17E, with all the projects
being operational. FY16-18E CAGR of 28.8%
Expect execution to materially pick up during FY16-18E, with revenue
27,798
CAGR of 17.5%
34,112 Overall FY16-18E revenue CAGR of 19.4%
20.3
3,449 FY16-18E Toll EBIDTA CAGR of 56.2%
3,661 FY16-18E EBIDTA CAGR of 17.3%
54.6 BOT margins to improve as traffic volume pick up
13.2

6,065.3 7,109.9 Overall FY16-18E EBIDTA CAGR of 32.1%

21.4
20.8 Improvement owing to higher toll revenue
1,773 2,047 Growth in line with BOT assets capitilisation
2,293 2,264 Interest expense largely driven by BOT projects
2,134 2,942 FY16-18E PBT CAGR of 4.9%
7.5
8.6 Expansion owing to faster toll revenue growth
590
988
27.6
33.6
(22.8)
45.4
1,522 2,000 FY16-18E PAT CAGR of 21.8%
5.4
5.9
Impacted by BOT project capitilisation. Since these are concession
Gross Block Turnover
2.2
1.4
1.0
1.1 projects, the asset turn is low as revenue is realised over the life of
the project
Debtor Days
52
63
79
79 Stable debtor days
Higher revenue growth and full impact of high margin BOTs to result
CFO a
2,468
799
3,167 4,744
in higher positive cash flow from operations
No incremental BOT project requirement. Capex to be largely
CFI b
(9,749) (2,334) (3,445) (850)
standalone business driven
FCF - a+b
(7,281) (1,535)
(278) 3,894
CFF c
6,536
2,430
(15) (2,673)
Total change in cash - a+b+c
(745)
895
(294) 1,222 Net cash position to remain strong
Source : HDFC sec Inst Research, P Project segment EBIDTA
Page | 6

PNC INFRATECH : RESULTS REVIEW 4QFY16

With improvement in order

intake we have upgraded
our FY18E EPS by 3.8%.
FY17E upgrade of 12% on
account of lower taxes
(MAT)

Change Un Estimates (Standalone)

Rs mn

FY17E
New

FY17E
Old

%
Change

FY18E
New

FY18E
Old

Revenues

22,692

22,692

27,798

26,893

3,014

3,014

3,661

3,583

13.3

13.3

13.2

13.3

1,596

1,425

12.0

1,760

1,696

31.1

27.8

12.0

34.3

33.1

FY17E
% Change
New

FY18E
Old

EBIDTA
EBIDTA Margins (%)
APAT

With robust growth in MP

highway, Kanpur OMT and
Kanpur-Kabrai project, we
have upgraded our toll
revenue estimates. This,
along with EPC revenue
upgrade, results in 9% FY18E
EPS upgrade. FY17E upgrade
of 21.1% on account of
lower taxes (MAT)

Adj. EPS (INR)

%
Comments
Change
We have changed the FY18E revenue
3.4 on account of strong book accretion
during FY17-18E
2.2
EBIDTA margins largely stable in the
(15.1)
13-13.5% band
Higher other income and increase in
3.7 revenue estimate to result in higher
APAT
3.7

Source: Company, HDFC sec Inst Research

Change in Estimates (Consolidated)

Rs mn

Revenues

FY17E
Old
28,360

28,249

0.4

34,112

EBIDTA
EBIDTA Margins (%)

6,065
21.4

5,954
21.1

1.9
31.0

7,110
20.8

APAT

1,522

1,256

21.1

2,000

Adj. EPS (INR)

29.66

24.48

21.1

38.98

FY18E
% Change Comments
New
Change in EPC revenue estimate,
coupled with better traffic on MP
33,079
3.1
highway, Kanpur-Kabrai and Kanpur
OMT
6,904
3.0
20.9
(2.8)
Better profitability in BOT assets and
1,834
9.0 upgrade of EPC revenue results in
increase in APAT
35.75
9.0

Source: Company, HDFC sec Inst Research

Page | 7

PNC INFRATECH : RESULTS REVIEW 4QFY16

Outlook and valuation

Target price of Rs 660/sh implies ~16.2% upside
We value standalone EPC
business at Rs 515/share
(15x one-year forward
Mar-18E EPS)
We value PNCs BOT
portfolio at Rs 146/share
(1.6x invested equity)

Our target standalone P/E

multiple is in line with road
EPC peers, such as KNR
Construction and J Kumar
Infra

We have valued PNC standalone on P/E basis

inline with it road EPC peers, namely KNR/J

Kumar/Sadbhav, at 15x one-year forward. Our
rationale is (1) A robust order book with ~2x
increase over the FY16-18E period to Rs 109.9bn,
(2) A strong balance sheet (FY16 standalone net
D/E at -0.07x, (3) Fully invested BOT portfolio, and
(4) High share of NHAI EPC roads in the order book
will result in lower working capital demand, as
these projects have 10% interest-free client
advance. PNC has 68 days (FY16) of debtor - one
of the best in the industry.

Higher-than-estimated order intake may result in

further stock re-rating as PNC has (1) A diversified

presence in roads and a dedicated freight corridor,
the biggest beneficiary of government spending,
(2) Strong execution capability, which provides
scope for earning early completion bonus (3-6% of
project cost) leading to EBIDTA margin expansion,
and (3) Likely support from the captive order book
in lieu of any contraction in future roads EPC
orders.

While the NHAI pipeline remains strong at about

Rs 900bn annually, PNCs home state Uttar

Pradesh is coming up with Rs 250bn of road
projects to be awarded over the next two years. A
strong setup in UP provides strong order intake
tailwinds for the company.
We have valued PNCs toll projects using 13.5%
discount rate for arriving at NPV of the projects.
We value the BOT business at Rs 146/sh (1.6x of
PNC invested equity). We remain cautious on the
traffic pick-up in the Aligarh-Ghaziabad BOT
project, as current collections are about 50%
lower than estimate. Even with overloading and
full COD, the collections may remain ~30% below
estimates.
We rate PNC as a BUY with SOTP of Rs 660/share.
We value the (1) Standalone EPC business at Rs
515/share (15x one-year forward Mar-18 EPS),
and (2) BOT projects at Rs 146/share.

SOTP Valuation
We rate PNC as a BUY with
an SOTP-based target price
of Rs 660/sh

Segment

Valuation
FY18
Methodology Adjusted PAT

Standalone construction - EPC

FY18 P/E
BOT Value
FCFE Mar-17
SOTP Value

1,760

Multiple
15

Valuation (INR
mn)
26,399
7,477
33,876

NEW
Value per Share
(INR)
515
146
660

OLD
Value per Share
(INR)
496
130
625

Source: HDFC sec Inst Research

Page | 8

PNC INFRATECH : RESULTS REVIEW 4QFY16

Income Statement (Standalone)

Year ending March (Rs mn)
Net Revenues
Growth (%)
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
EBITDA Margin (%)
EBITDA Growth (%)
Depreciation
EBIT
Other Income (Including EO Items)
Interest
PBT
Tax (Incl Deferred)
RPAT
EO (Loss) / Profit (Net Of Tax)
APAT
APAT Growth (%)
Adjusted EPS (Rs)
EPS Growth (%)

Balance Sheet (Standalone)

FY14
11,521
(11.6)
3,814
577
5,712
1,418
12.3
(11.7)
248
1,170
106
234
1,042
341
701
(44)
657
(14.9)
12.81
(14.9)

Source: Company, HDFC sec Inst Research

FY15
15,610
35.5
5,717
737
6,990
2,166
13.9
52.7
364
1,803
138
462
1,478
475
1,004
(49)
954
45.3
18.60
45.3

FY16
20,142
29.0
14,683
836
1,963
2,660
13.2
22.8
525
2,135
1,011
332
2,814
386
2,427
(810)
1,618
69.5
31.5
69.5

FY17E
22,692
12.7
8,010
1,071
10,597
3,014
13.3
13.3
589
2,425
135
407
2,152
517
1,636
(39)
1,596
(1.3)
31.1
(1.3)

FY18E
27,798
22.5
9,813
1,231
13,093
3,661
13.2
21.5
695
2,966
143
428
2,681
885
1,796
(36)
1,760
10.2
34.3
10.2

Year ending March (Rs mn)

SOURCES OF FUNDS
Share Capital - Equity
Reserves
Total Shareholders Funds
Long-term Debt
Short-term Debt
Total Debt
Net Deferred Taxes
Long-term Provisions & Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Investments
Total Non-current Assets
Inventories
Debtors
Other Current Assets
Cash & Equivalents
Total Current Assets
Creditors
Other Current Liabilities & Provns
Total Current Liabilities
Net Current Assets
TOTAL APPLICATION OF FUNDS

FY14

FY15

FY16

FY17E

FY18E

398
5,892
6,290
553
2,193
2,747
27
1,775
10,839

398
6,786
7,184
528
3,003
3,530
4
2,499
13,218

513
13,110
13,623
60
60
(30)
1,598
15,251

513
14,653
15,166
60
2,750
2,810
(30)
1,520
19,466

513
16,356
16,869
60
3,250
3,310
(30)
1,445
21,595

1,528
16
3,510
5,054
1,048
3,436
2,262
999
7,745
700
1,261
1,960
5,785
10,839

2,105
70
4,235
6,410
2,225
3,667
3,263
212
9,367
1,081
1,478
2,559
6,808
13,218

2,144
4,644
6,788
2,364
3,763
4,988
971
12,085
1,062
2,560
3,621
8,464
15,251

2,555
4,694
7,249
2,798
5,595
5,609
2,070
16,072
1,243
2,611
3,855
12,217
19,466

2,710
5,344
8,054
3,427
6,854
6,947
1,035
18,263
1,523
3,199
4,722
13,541
21,595

Source: Company, HDFC sec Inst Research

Page | 9

PNC INFRATECH : RESULTS REVIEW 4QFY16

Cash Flow (Standalone)

Year ending March (Rs mn)
Reported PBT
Non-operating & EO items
Interest Expenses
Depreciation
Working Capital Change
Tax Paid
OPERATING CASH FLOW ( a )
Capex
Free cash flow (FCF)
Investments
INVESTING CASH FLOW ( b )
Debt Issuance/(Repaid)
Interest Expenses
FCFE
Share Capital Issuance
Dividend
FINANCING CASH FLOW ( c )
NET CASH FLOW (a+b+c)

Key Ratios (Standalone)

FY14
1,042
8
172
248
514
(331)
1,653
(535)
1,118
(478)
(1,013)
211
(234)
1,095
(23)
617

Source: Company, HDFC sec Inst Research

FY15
1,478
9
373
364
(1,094)
(498)
632
(1,012)
(380)
(636)
(1,648)
784
(462)
(58)
(93)
229
(788)

FY16
2,814
(679)
525
(1,756)
(386)
517
(495)
22
(408)
(904)
(3,470)
(131)
(3,579)
4,347
(154)
592
206

FY17E
2,152
273
589
(2,732)
(517)
(235)
(1,000)
(1,235)
(50)
(1,050)
2,750
(273)
1,242
(0)
(93)
2,385
1,100

FY18E
2,681
285
695
(2,434)
(885)
343
(850)
(507)
(650)
(1,500)
500
(285)
(293)
0
(93)
122
(1,035)

PROFITABILITY (%)
GPM
EBITDA Margin
APAT Margin
RoE
RoIC (or Core RoCE)
RoCE
EFFICIENCY
Tax Rate (%)
Fixed Asset Turnover (x)
Inventory (days)
Debtors (days)
Other Current Assets (days)
Payables (days)
Other Curr Liab/Provns (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E (x)
Interest Coverage (x)
PER SHARE DATA (Rs)
EPS
CEPS
Dividend
Book Value
VALUATION
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Revenues (x)
OCF/EV (%)
FCF/EV (%)
FCFE/Mkt Cap (%)
Dividend Yield (%)

FY14

FY15

FY16

FY17E

FY18E

66.9
12.3
5.7
11.0
12.4
8.6

63.4
13.9
6.1
14.2
14.0
11.0

27.1
13.2
8.0
15.6
19.1
19.1

64.7
13.3
7.0
11.1
14.5
11.2

64.7
13.2
6.3
11.0
13.1
10.1

32.7
4.0
33.2
108.8
71.7
22.2
41.1
150.4
1.9
0.28
5.0

32.1
4.1
52.0
85.8
76.3
25.3
35.5
153.3
1.6
0.46
3.9

13.7
4.6
42.8
68.2
90.4
19.2
46.9
135.3
0.0
(0.07)
6.4

24.0
4.2
45.0
90.0
90.2
20.0
42.0
163.2
0.9
0.05
6.0

33.0
4.5
45.0
90.0
91.2
20.0
42.0
164.2
0.9
0.13
6.9

12.8
18.5
0.6
122.6

18.6
26.6
1.5
140.0

31.5
57.5
2.5
265.5

31.1
43.4
1.5
295.6

34.3
48.6
1.5
328.8

44.4
4.6
21.8
2.7
5.4
3.6
3.8
0.1

30.5
4.1
15.0
2.1
1.9
(1.2)
(0.2)
0.3

18.0
2.1
10.6
1.4
1.8
0.1
(12.3)
0.4

18.3
1.9
9.9
1.3
(0.8)
(4.1)
4.3
0.3

16.6
1.7
8.6
1.1
1.1
(1.6)
(1.0)
0.3

Source: Company, HDFC sec Inst Research

Page | 10

PNC INFRATECH : RESULTS REVIEW 4QFY16

Income Statement (Consolidated)

Year ending March (Rs mn)
Net Revenues
Growth (%)
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
EBITDA Margin (%)
EBITDA Growth (%)
Depreciation
EBIT
Other Income (Including EO Items)
Interest
PBT
Tax (Incl Deferred)
RPAT
Minority Interest
Profit/Loss from Associates
EO Items
APAT
APAT Growth (%)
Adjusted EPS (Rs)
EPS Growth (%)

FY14
13,600
4.2
4,309
619
6,918
1,754
12.9
12.3
402
1,353
108
609
852
346
506
45
552
(26.1)
10.8
(26.1)

Source: Company, HDFC sec Inst Research

Balance Sheet (Consolidated)

FY15
18,609
36.8
6,174
814
8,823
2,799
15.0
59.5
603
2,196
121
925
1,392
479
913
(0)
913
65.5
17.8
65.5

FY16
23,946
28.7
14,798
953
4,122
4,073
17.0
45.5
1,091
2,983
980
1,287
2,676
384
2,292
0
(131)
(814)
1,347
47.5
26.3
47.5

FY17E
28,360
18.4
10,627
1,071
10,597
6,065
21.4
48.9
1,773
4,293
135
2,293
2,134
590
1,544
(23)
1,522
13.0
29.7
13.0

FY18E
34,112
20.3
12,678
1,231
13,093
7,110
20.8
17.2
2,047
5,063
143
2,264
2,942
988
1,954
45
2,000
31.4
39.0
31.4

Year ending March (Rs mn)

SOURCES OF FUNDS
Share Capital - Equity
Reserves
Total Shareholders Funds
Minority Interest
Long Term Debt
Short Term Debt
Total Debt
Net Deferred Taxes
Long Term Provisions & Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Investments
Total Non-current Assets
Inventories
Debtors
Other Current Assets
Cash & Equivalents
Total Current Assets
Creditors
Other Current Liabilities & Provns
Total Current Liabilities
Net Current Assets
TOTAL APPLICATION OF FUNDS

FY14

FY15

FY16

FY17E

FY18E

398
6,699
7,097
1
7,431
2,819
10,250
31
1,030
18,409

398
8,313
8,711
1
13,066
3,859
16,924
10
2,587
28,232

513
12,584
13,097
1
16,440
60
16,500
(32)
1,612
31,178

513
14,046
14,559
1
15,893
2,810
18,703
(32)
1,909
35,140

513
15,986
16,499
1
14,901
3,310
18,211
(32)
2,297
36,975

6,489
5,926
1,051
13,466
1,048
1,917
2,619
1,156
6,740
875
922
1,797
4,943
18,409

6,833
14,822
938
22,593
2,225
2,644
3,101
411
8,381
1,111
1,631
2,742
5,639
28,232

22,899
656
23,555
2,364
4,121
4,768
1,066
12,319
2,046
2,648
4,695
7,624
31,178

24,571
633
25,204
2,856
6,100
5,768
772
15,496
2,423
3,137
5,560
9,936
35,140

23,374
678
24,052
3,538
7,411
6,668
1,994
19,611
2,915
3,773
6,688
12,923
36,975

Source: Company, HDFC sec Inst Research

Page | 11

PNC INFRATECH : RESULTS REVIEW 4QFY16

Cash Flow (Consolidated)

Year ending March (Rs mn)
Reported PBT
Non-operating & EO items
Interest expenses
Depreciation
Working Capital Change
Tax Paid
OPERATING CASH FLOW ( a )
Capex
Free cash flow (FCF)
Investments
INVESTING CASH FLOW ( b )
Debt Issuance/(Repaid)
Interest Expenses
FCFE
Share Capital Issuance
Dividend
FINANCING CASH FLOW ( c )
NET CASH FLOW (a+b+c)
Closing Cash & Equivalents

Key Ratios (Consolidated)

FY14
852
(58)
609
402
(84)
(333)
1,388
(5,419)
(4,032)
(128)
(5,547)
5,157
(542)
583
(35)
4,580
420
1,156

Source: Company, HDFC sec Inst Research

FY15
1,392
(60)
925
603
107
(500)
2,468
(9,862)
(7,394)
114
(9,749)
7,484
(855)
(766)
(93)
6,536
(745)
411

FY16
2,676
(1,806)
1,287
1,091
(2,304)
(384)
559
(2,334)
(1,775)

FY17E
2,134
(135)
2,293
1,773
(2,309)
(590)
3,167
(3,445)
(278)

FY18E
2,942
(143)
2,264
2,047
(1,378)
(988)
4,744
(850)
3,894

(2,334)
(424)
(1,121)
(3,320)
4,035
(60)
2,430
655
1,066

(3,445)
2,203
(2,158)
(234)
(60)
(15)
(294)
772

(850)
(492)
(2,121)
1,282
(60)
(2,673)
1,222
1,994

PROFITABILITY (%)
GPM
EBITDA Margin
APAT Margin
RoE
RoIC (or Core RoCE)
RoCE
EFFICIENCY
Tax Rate (%)
Fixed Asset Turnover (x)
Inventory (days)
Debtors (days)
Other Current Assets (days)
Payables (days)
Other Curnt Liab & Provns (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E (x)
Interest Coverage (x)
PER SHARE DATA (Rs)
EPS
CEPS
Dividend
Book Value
VALUATION
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Revenues (x)
OCF/EV (%)
FCF/EV (%)
FCFE/Mkt Cap (%)
Dividend Yield (%)

FY14

FY15

FY16

FY17E

FY18E

68.3
12.9
3.7
7.8
5.0
5.7

66.8
15.0
4.9
11.6
5.4
6.5

38.2
17.0
9.6
21.0
8.7
11.4

62.5
21.4
5.4
11.2
9.2
9.7

62.8
20.8
5.7
12.6
9.8
9.6

40.6
1.7
28.1
51.5
70.3
23.5
24.7
101.7
5.8
1.3
2.2

34.4
2.1
43.6
51.9
60.8
21.8
32.0
102.6
6.0
1.9
2.4

14.3
0.9
36.0
62.8
72.7
31.2
40.4
100.0
4.1
1.2
2.3

27.6
1.0
36.8
78.5
74.2
31.2
40.4
117.9
3.1
1.2
1.9

33.6
1.1
37.9
79.3
71.4
31.2
40.4
116.9
2.6
1.0
2.2

10.8
18.6
0.6
138.3

17.8
29.6
1.0
169.8

26.3
47.5
1.0
255.3

29.7
64.2
1.0
283.8

39.0
78.9
1.0
321.6

52.8
4.1
21.8
2.8
3.6
(10.5)
2.0
0.1

31.9
3.3
16.3
2.5
5.4
(16.2)
(2.6)
0.2

21.6
2.2
10.9
1.9
1.3
(4.0)
(11.4)
0.2

19.2
2.0
7.8
1.7
6.7
(0.6)
(0.8)
0.2

14.6
1.8
6.4
1.3
10.5
8.6
4.4
0.2

Source: Company, HDFC sec Inst Research

Page | 12

PNC INFRATECH : RESULTS REVIEW 4QFY16

RECOMMENDATION HISTORY
PNC Infratech

Date
30-Mar-16
31-May-16

TP

700
650

CMP
496
568

Reco
BUY
BUY

Target
625
660

600
550
500
450
400
350

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

300

Rating Definitions
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

Page | 13

PNC INFRATECH : RESULTS REVIEW 4QFY16

Disclosure:
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recommendation(s) or view(s) in this report.
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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
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Page | 14