On Tuesday, October 21, there was still a lot of selling pressure on PNC Infratech shares. Following a notable 20% decline on Monday, October 21, the stock dropped an additional 10% today to its 52-week low of ₹299. The Ministry of Road Transport and Highways (MoRTH) banned the company and its two subsidiaries from bidding on new contracts for a year, which caused the steep drops.
The Central Bureau of Investigation’s (CBI) continuing bribery investigation, which involves four PNC employees accused of bribing National Highways Authority of India (NHAI) officials to obtain project licenses for the Jhansi-Khajuraho highway project, is the reason for the Ministry’s decision.
In an exchange filing on October 21, PNC Infratech disclosed that the business and its two subsidiaries had challenged the MoRTH judgement in three different writ petitions filed with the Delhi High Court.
At 10:07 a.m., the price of PNC Infra’s shares was down 8.41% at ₹335.85 on the BSE. The market valuation of the company is ₹8,615.87 crore. According to the NSE, the price of PNC Infra’s stock reached its 52-week high on May 27, 2024, at ₹574.80.
Nuvama Research reviewed its rating of PNC Infratech in a report published on October 21, 2024, stating that the company’s incapacity to bid for MoRTH projects is likely to keep the stock under pressure shortly. Given that a sizable amount of PNC’s revenue comes from central government road projects, Nuvama emphasised the possible negative effect on the company’s future order book. Ongoing maintenance and building initiatives, however, won’t be impacted.
“We believe the stock shall be under pressure in the near term due to the adverse impact on order accretion from MoRTH,” Nuvama’s report stated. The company can continue toe look for prospects from other government agencies and non-MoRTH central government initiatives, it added.
