Shares of PNC Infratech Ltd. have witnessed a sharp decline over the past two trading sessions, losing nearly 30% of their value. The company's stock fell 20% on Monday, followed by another 8% drop on Tuesday, leading to a market capitalisation erosion of ₹3,200 crore. The stock has now fallen for four consecutive trading sessions and is currently trading at ₹336.6, down 41% from its recent peak of ₹574.
The significant drop in PNC Infratech's share price comes after the company, along with its two subsidiaries – PNC Khajuraho Highways Pvt. Ltd. and PNC Bundelkhand Highways Pvt. Ltd. – was disqualified by the Ministry of Road Transport & Highways from participating in any tender process. The disqualification follows an FIR and charge sheet filed by the Central Bureau of Investigation (CBI) earlier this year.
PNC Infratech was asked to appear before the ministry for a personal hearing on October 18 to address the allegations. Despite the setback, the company has stated that the ongoing development, construction, and operations & maintenance activities will not be impacted. However, the overall effect on other business activities is still being evaluated.
Despite the stock's sharp fall, a majority of analysts covering PNC Infratech continue to hold a positive outlook. Out of the 19 analysts tracking the stock, 14 still have a "buy" rating, three recommend a "hold," and two have a "sell" rating.
Brokerage firm HDFC Securities has reduced its price target for PNC Infratech from ₹600 to ₹471, while also cutting the company's Earnings Per Share (EPS) estimates by 9.6%, 19.6%, and 22.4% for the fiscal years 2025, 2026, and 2027, respectively. The brokerage has maintained its "buy" recommendation, citing a strong order book, a robust balance sheet, and a low probability of asset monetisation issues. However, they acknowledge that the current situation will continue to weigh on the stock until more clarity emerges.
Meanwhile, Nuvama has put its rating for PNC Infratech "under review" and expects the stock to remain under pressure in the near term due to the negative impact of the ministry's order.
The recent disqualification by the Ministry of Road Transport & Highways has triggered a significant market reaction, with PNC Infratech’s market cap plummeting by ₹3,200 crore in just two days. While the company has assured stakeholders that core business activities remain unaffected, the uncertainty surrounding the disqualification is expected to keep the stock under pressure for the foreseeable future.
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