PNC Infratech stated that its business operations, along with those of its subsidiaries, would continue as usual. The company added that it would disclose any financial implications arising from the matter, if applicable, in due course.
NHAI action
The development follows action initiated by the NHAI in August, when it issued a notice proposing to classify PNC Infratech as a “non-performer”. Such a classification would make the company ineligible to bid for future NHAI projects. The authority also issued a show-cause notice to the company.
Subsequently, PNC Infratech was barred from participating in projects tendered by the NHAI and the Ministry of Road Transport and Highways for three years. The latest court order provides interim relief by staying the debarment orders.
PNC Infratech's Q1 performance
Separately, PNC Infratech reported a steady performance in the first quarter, with earnings before interest, tax, depreciation and amortisation (EBITDA) rising 42.6% year-on-year. Its EBITDA margin also expanded by more than 500 basis points compared with the corresponding period last year.
In its post-results commentary, the company said proceedings relating to the show-cause notice over the Kanpur-Lucknow Expressway project were still pending. It also highlighted an improvement in execution across newly awarded highway projects.
Investors will now track further developments in the legal proceedings and their potential implications for the company's eligibility to participate in future highway projects.
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