Motilal Oswal maintains ‘Buy’ on PTC

MUMBAI: In its result update note, Motilal Oswal has maintained its ���Buy��� call on PTC with a price target of Rs 109 per share.

���During 2QFY10, PTC India reported revenues of Rs 24.6 billion (up 21% YoY), and net profit of Rs 309 million (down 7.4% YoY). 2QFY10 results include rebates of Rs 100-120 million, unclaimed by SEBs due to delay in payments. Adjusted for one-off impact of Rs120 million, EBIDTA for 2QFY10 stands at Rs177 million in-line with our estimate of Rs164 million.

We expect PTC to report net profit of Rs 1.1 billion in FY10E (up 21% YoY) and Rs1.3 billion in FY11E (up 14% YoY). At CMP of Rs91/share, the stock trades at reported PER of 24x FY10E and 21x FY11E.

We arrive at a SOTP based target price of Rs109/share, comprising of Rs38/share for core business (DCF, WACC of 11.3%), Rs 20/share for investment in PTC Financial Services (30% premium to book value), Rs12/share for investment in project SPVs and Rs 39/share of cash on books. Maintain Buy,��� the brokerage said.