Top takeaways from Q1FY17 : Strong 19% yoy growth in topline – was inline with our and consensus estimates.  EBITDA margins at 13% (flat qoq) – along expectations.  EBITDA at Rs 671mn (+12% yoy) – was bang inline with our estimate (Rs 670mn). Other income was boosted by Rs 140mn exceptional income on loan to subsidiary. PAT was boosted by higher other income and MAT credit – adjusted PAT was inline with estimates. Orderbook was Rs 51bn (2.4x book-to-sales); 3.1x including L1 of Rs 13.7bn. Standalone debt at Rs 150mn (down from Rs 3.5bn in FY15) on repayment using IPO cash proceeds. Cash reserves at Rs 1.3bn, making it net cash company (from leverage of 0.5x in March 2015). Debtor days reduced to 54 from 68 in March 2016. It expects these to be at 80-90 going forward. Net WC days decreased to 87 from 92 in March 2016 – expected to be 115-120 days going forward.

Valuation: Phillip Capital have made minor revision to FY17-18 estimates. They continue to value PNC using SoTP – EPC business at 15x FY18 P/E (inline with peers) and BOT at 1x P/BV. Also note that DCF value of PNC’s BOT portfolio is 20% higher than the book-value – hence providing further upside potential, over and above our price target. They maintain BUY rating with price target of Rs 140 (unchanged).