Shares of PNC Infratech Ltd surged over 5% on October 10 after the company was declared the lowest bidder for a ₹2,091 crore project by the City & Industrial Development Corporation of Maharashtra Ltd (CIDCO). This significant infrastructure development project is located near the upcoming Navi Mumbai Airport. The stock price rise is notable for investors looking to invest in stocks tied to large-scale infrastructure projects.
Key details of the CIDCO project
PNC Infratech, in a regulatory filing, announced that the ₹2,091 crore project will involve the integrated infrastructure development of roads with widths of 20 metres and above. The project also includes the construction of flyovers, minor bridges, and electrical works, such as street lighting, under the NAINA (Navi Mumbai Airport Influence Notified Area) project. The construction work is expected to be completed over 1,460 days, accounting for the monsoon seasons, making this a long-term commitment.
This win further strengthens PNC Infratech's portfolio and provides a promising avenue for those looking to invest in stocks associated with infrastructure growth.
Stock performance and recent developments
On October 10, at 9:27 am, PNC Infratech's shares were trading 4.7% higher at ₹448.75 on the National Stock Exchange (NSE). This rise follows a broader positive trend for the stock, which has seen an impressive 28% increase so far in 2024, significantly outperforming Nifty's returns of around 15%. Over the past 12 months, the stock has risen by 20%, though this growth has been outpaced by Nifty's 27% rise during the same period.
PNC Infratech has gained attention this year thanks to a series of key contract wins. For investors seeking stable returns through infrastructure stocks, PNC Infratech has become a solid option for those who wish to invest in stocks that show consistent performance.
Other recent contract wins
This latest CIDCO project win follows a series of recent successes for PNC Infratech. In August, the company was declared the lowest bidder for a highway and bridge construction project worth ₹380 crore in Uttar Pradesh and Bihar. This follows a series of contract awards highlighting PNC's expertise in delivering large-scale infrastructure projects.
Earlier in May, the company's subsidiary, PNC Kanpur Highways Ltd, received a significant payment of ₹390.62 crore from the National Highways Authority of India (NHAI). This payment was part of a settlement under the Government of India's Vivad Se Vishwas II (Contractual Disputes) Scheme and reflects the company's success in resolving long-standing disputes with government agencies. These developments signal that PNC Infratech is a well-positioned player for investors looking to invest in stocks within the Indian infrastructure sector.
Financial performance
PNC Infratech has shown strong financial performance despite some fluctuations in revenue. For the quarter ended June 2024, the company reported a remarkable 168% year-on-year increase in net profit, rising to ₹421 crore. However, its revenue from operations dipped to ₹1,744 crore, down from ₹1,861 crore in the same quarter of the previous year. This mixed result highlights the company's ability to deliver profit growth, even amidst varying operational revenue figures.
For those looking to invest in stocks, PNC Infratech's track record of profitability and its steady stream of new contracts make it a compelling choice.
Conclusion
PNC Infratech's recent win of the ₹2,091 crore CIDCO project near the Navi Mumbai Airport, coupled with its strong financial results, makes it an attractive stock for investors. With consistent contract wins and strategic payments from government bodies, PNC Infratech continues to show resilience and growth potential. For investors who are looking to invest in stocks within the infrastructure sector, PNC Infratech is a stock to watch closely.
Investing in infrastructure-focused companies like PNC Infratech offers opportunities for long-term growth and stability, especially in India's rapidly developing economy.
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