Stock Tips: There is a golden chance of earning 26 percent profit by investing in a giant company working on projects related to road-bridge and water life mission.
PNC Infratech Outlook: Shares of construction sector giant PNC Infratech have lost 17 per cent this year. According to market experts, the current level is a better buying opportunity and up to 26 percent profit can be earned on investment. This giant takes up infra projects like highways, bridges, flyovers, power transmission lines and airport runway development. Apart from this, it also works on water supply projects under the Jal Jeevan Mission. Considering its trading position, brokerage firm Hem Securities has given a buy rating for investing in it and has set a target price of Rs 294.
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- According to the brokerage firm, the company’s better results will continue in the coming quarters due to the spurt in tender activity. The company’s consolidated revenue grew by 19.40 percent on a year-on-year basis and 29.26 percent on a quarterly basis to reach Rs 2226 crore in the March 2022 quarter. Talking about the profit, it jumped 14.28 percent on a yearly basis and 47.69 percent on a quarterly basis to reach Rs 480 crore in January-March 2022.
- The company already has orders worth Rs 21 thousand crore, which is more than three times the revenue of FY 2022. This will see an increase in its revenue in the next two to three years.
- The company has a good track record in terms of timely completion of projects.
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- Construction is picking up speed. NHAI (National Highway Authority of India) has set a target of constructing 25 thousand km of national highway at the rate of 50 km per day in the current financial year 2022-23.
- Its shares are currently at 10.7x P/E while the industry average is 37.6x, that is, the stock is getting cheap.
- The company has a strong presence in Uttar Pradesh and the company will benefit from infra development and project tendering.
- The company aims to achieve projects worth Rs 8 thousand-10 thousand crore under the Jal Jeevan Mission in the current financial year.
- For all these reasons, Hem Securities has given investment advice and buy rating.
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Shares available at 41% discount
The shares of PNC Infratech were at a price of Rs 395.55 on the BSE on October 13 in 2021 last year, which is a record price of 52 weeks. Today (June 16) at a price of Rs 233.95, that is, shares are being received at a discount of about 41 percent from the record price. Last month, on May 11, its shares had slipped to a 52-week low of 226.90 and now it has recovered only 3 percent. However, now market experts believe that by investing in it at the current price, a profit of 26 percent can be earned.
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)