PNCL has been awarded arbitration claims of Rs 1.4 bn against the National Highway Authority of India (NHAI) and Rs 0.31bn from a state road project.
These claims to accrue in FY-20 and will directly flow upwards to the EBITDA level.
There will be receipt of Rs.140 m as early completion bonus for the Aligarh Moradabad project. In addition to the above, which includes the P&L impact, there are receipts of Rs 0.85 bn as repayment of debt by the Narela subsidiary following the favourable arbitration ruling against Delhi and Rs 3.0 bn from the sale of the Ghaziabad Aligarh Expressway (GAEPL).
These account for Rs 5.7 bn in cash inflows, which, according to reports, largely suffice for the Rs 6.0 bn equity commitment for HAM assets over the next 24 months.
Management expects OCF generation of Rs16 bn over the next three years.
It was observed that historically PNCL has generated 6% OCF to sales and even with an improved assumption of ~10% OCF to sales we estimate that this will entail Rs 160 bn of revenues over the next three years (or average annual execution of Rs 50bn+).
PNCL is entering into a phase of strong multi-year revenue growth. Further, with Rs 6.0bn equity committed for existing HAM projects and capex of Rs 4.0 bn (based on management’s guidance of Rs 1.25bn in annual capex) for the next three years.