#SALES #GROWTH 5 Year CAGR 18.0%

In FY24, the sales grew by 9% YoY to ₹8,650 cr (v/s ₹7,956 cr in FY23). FY23 sales include ₹37.02 cr early completion bonus (early completion of Purvanchal Expressway in the state of Uttar Pradesh). The YoY sales growth was mainly driven by strong execution of water projects (Jal Jeevan Mission project). In Q1 FY25, sales grew by 4% YoY to ₹2,168 cr (v/s ₹2,092 cr in Q1 FY24). This includes ₹56.4 cr received as early bonus for early completion of one of the EPC projects in Maharashtra. It also includes ₹515.8 cr worth of arbitration claim received for two SPVs namely PNC Raebareli Highways Pvt Ltd and PNC Kanpur Highways Ltd in regard to the “Vivad se Vishwas II” scheme of Government of India. Excluding the bonus and claim, the sales during the quarter stood at ₹1,595 cr, and de-grew by 24% YoY.

#EBITDA #GROWTH 5 Year CAGR 14.8%

In FY24, the EBITDA grew by 25% YoY to ₹2,005 cr. The EBITDA growth was mainly led by decline in other expenses. Segment wise, all business segment reported doubledigit EBIT growth YoY. In Q1 FY25, the EBITDA increased by 122% YoY to ₹969 cr. It included the bonus for early completion and arbitration claim. Excluding bonus and claim, EBITDA de-grew by 9% YoY to ₹397cr.

#PAT #GROWTH 5 Year CAGR 21.0%

In FY24, the PAT increased by 38% YoY to ₹909 cr (v/s ₹658 cr in FY23). The finance cost increased by 41% YoY to ₹660 cr because of increase in borrowings. The timely execution of projects by company plays a crucial role in securing profitability. In Q1 FY25, the PAT grew by 218% YoY to ₹575 cr. The finance cost increased during the quarter. Excluding bonus and claim, the PAT de-grew by ~25% YoY and stood at ~₹136 cr.

#EBITDA #MARGIN

In FY24, the EBITDA margin expanded by 306 bps YoY to 23.2%. Segment wise, the road business EBIT margin expanded by 454 bps YoY to 15.3%, however the water business margin contracted by 161 bps YoY to 15.6%. Toll/Annuity business EBIT margin expanded to 68.5% from 46.5% in FY23. The company’s cost of material consumed/contract paid constitutes ~84% of the total expenses followed by other expenses ~10% and employee benefit expenses ~6%. In Q1 FY25, the EBITDA margin stood at 44.7% (v/s 20.9% in Q1 FY24). Excluding bonus and claim, EBITDA margin expanded by 400 bps YoY to 24.9%. PNC Infratech avoids projects below a minimum profitability threshold, which enables it to sustain its operating margins.

#PAT #MARGIN

In FY24, the PAT margin expanded by 224 bps YoY to 10.5%. In Q1 FY25, the PAT margin stood at 26.5% (v/s 8.6% in Q1 FY24). Excluding bonus and claim, the PAT margin contracted by 10 bps YoY and stood at ~8.5%.

#ROCE

In FY24, the ROCE improved to 16.07% led by high increase in PBIT. Over the past two decades, the company has been able to successfully execute several infrastructure projects in several states, which has helped in building strong client relations. Strong client relations would help in increasing order book and the company’s selection of projects above a minimum profitability threshold, strong execution and timely completion of projects will help in improving the operating profit and return ratios.

#COMPANIES #POTENTIAL

• National Infrastructure Pipeline (NIP) projected investments to the tune of ₹111 lakh cr during the FY20-25. The report mentioned that 18% of the targeted investment is expected to be made in the road sector. • The government has allocated ₹70,163 cr to provide tap water connections to households in FY25 under the Jal Jeevan Mission. There is an assured funding of ~₹1.42 lakh crore for this project up to FY26. Road sector: • India has the second-largest road network globally with a total road network of ~67 lakh km of which, national highways and expressways comprised 1,46,145 km (~2%) and state highways 1,79,535 km (~3%). Major district roads and rural roads accounted for the remaining ~63 lakh km (~95%). There is just 15% (~21,150 km) private sector participation in national highways. • About 1,820 projects comprising ~89,300 km have been identified to be implemented in 2020-25. The total capex for these projects by the centre is estimated at ₹19.35 lakh cr over FY20-25. • It includes the development of overall 60,000 km of national highways including 2,500 km of expressways, 9,000 km of economic corridors, 2,000 km of coastal and port connectivity, bypasses for 45 towns and enhanced connectivity for 100 tourist destinations by 2024. These projects include the construction of new expressways such as Delhi-Mumbai Expressway, Bengaluru-Chennai Expressway, etc. • In the interim budget held in July 2024, the government allocated ~₹1.68 lakh cr to NHAI and ₹2.78 lakh cr to MoRTH for FY25. • In FY25, the road sector is expected to produce sluggish results on account of delayed project awarding from the government due to the general election, delays in land acquisition, rising competitive pressure, prolonged period between announcement and appointment dates of projects, etc. Moreover, the execution of the HAM projects has also been delayed on the back of above reasons.

#COMPANY #OUTLOOK

In FY25, the management expects revenue to remain flat or de-growth by ~10% YoY. This will be on account of general election, delayed and prolonged monsoon, heatwave, slow awarding of projects in FY24, etc. Slow awarding of highway projects is a trend seen during election and hence many backlogged projects are expected to be awarded during FY25. Hence it anticipates ~15%-20% revenue growth in FY26. • The company has recently been awarded three new major projects for an aggregate contract value of ₹6,670 cr. Including the value of above three new projects, the company’s gross order book as on date is over ₹21,000 cr. • Out of the unexecuted order book, the highway, expressways & canals projects contributed ~82% and water projects contributed ~18%. • The management anticipates revenue of ~₹1,500 cr from water projects in FY25. • The company anticipates EBITDA margin (standalone) to be ~12%-12.5% for FY25. • Currently, the company has a total of 28 projects in public-private partnership (PPP) format. It comprises 3 build operate transfer (BOT) toll projects, 2 BOT annuity projects and 23 hybrid annuity mode (HAM) projects. The aggregate bid projects cost of all 23 HAM projects is ~₹30,000 cr. Out of 23 HAM projects, the company had achieved commercial operations date (COD) and provisional commercial operation date (PCOD) for 10 projects, 9 projects are under construction, 3 projects achieved financial closure and 1 project has had its concession agreement executed. • In terms of equity investment, the total requirement for the HAM projects which are under construction would be ~₹3,092 cr. Out of this, the company has already infused ~₹2,079 cr till June 2024. The balance equity of ~₹1,013 cr will be invested over the next 2-3 years and will be funded through internal accruals generated during the same period. CASE STUDY • Equity infusion for the rest of FY25 would be ~₹587 cr, for FY26 it is expected at ~₹290 cr and FY27 at ~₹140 cr.

The asset monetization of 12 road projects would be in two phases. In first phase, these are 7 projects and second phase 5 projects. In first phase, the enterprise value of transaction is ₹5,015 cr, debt infused ₹3,559 cr and equity value ~₹999 cr. In second phase, the enterprise value of transaction is ₹3,990 cr, debt ₹2,920 cr and equity value ₹740 cr. The company expects to receive the payment of first tranche by the end of FY25. • Post asset monetization, the company expects the debt-to-equity ratio to come down below 1x. • The company has been barred by the MORTH from participating in any tender process of the Ministry with a period of one year, starting 18th October, 2024.

PNC Infratech Limited 260-320
Expected level 420
Support 205

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💊Best in PHARMA SECTOR

a) Lincoln Pharmaceuticals

b) Cipla

c) Piramal Pharma Ltd

d) Glenmark

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Lincoln Pharmaceuticals Limited report

Lincoln pharma India's leading healthcare Set up in the year 1979, the manufacturing facility of Lincoln is based at Khatraj, Gujarat sharing the same dais as with the international standards. There arecompanies has reported standalone net profit of Rs. 50.03 crore for the half year ended 30th September 2024, growth of 7.55% Y-O-Y as compared to the net profit of Rs. 46.52 crore in H1 FY24. Income from operation for the H1 FY25 was reported at Rs. 308.50 crore, higher by 5.79% Y-O-Y over H1 FY24 income from operation of Rs. 291.61 crore. EBITDA for the H1 FY25 ended September 2024 was reported at Rs. 71.50 crore as compared to Rs. 68.25 crore EBITDA in H1 FY24 registering growth of 4.76% Y-O-Y. EPS for H1 FY25 was reported at Rs. 24.96 per share. Shareholders at the 30th Annual General Meeting (AGM) approved a dividend of Rs. 1.80 per share (18%) for the FY 2023-24. As of September 2024, Foreign Institutional Investors (FIIs) have steadily raised their holding in the company to 5.19% from 2.59% as on September 2023. The company aims to reach a revenue target of Rs. 750 crore by FY26 through focused growth strategies, business expansion into high-value product lines, and entry into new markets. Company is also among a very few companies to achieve a profit growth every single year from FY13 to FY24. Commenting on the results and performance,

Management comments

Mr. Mahendra Patel, Managing Director, Lincoln Pharmaceuticals Limited, said, "We are pleased to report continued strong growth across all business verticals H1 FY25, while maintaining a net debt-free status. Our new product launches in domestic and export markets have strengthened our market presence and accelerated growth, positioning us for even better performance during the second half of the year. Through a combination of robust growth initiatives, high-quality products, geographic expansion, and operational improvements, we are on track to achieve our ambitious Rs. 750 crore revenue target by FY26. Notably, we are among a select group of companies that have consistently achieved profit growth every year from FY13 to FY24."