H.G. Infra Engineering Limited, is an Indian company that specializes in the construction and maintenance of road infrastructure. Their primary focus is on providing Engineering, Procurement and Construction (EPC) services, as well as undertaking contracts for the maintenance of roads, bridges, flyovers and other related infrastructure projects. With a significant presence in 11 states throughout India, HG Infra primarily focuses on the northern region, accounting for approximately 53% of its operations.
HG Infra has received the letter of Award (LOA ) dated May 23, 2023 with a value of Rs 42.5 Cr (including GST), from NTPC Limited (A Govt. of India Enterprise) for the project of “Rate contract for Pond ash transportation from NTPC Simhadri ash dyke to road construction sites in the state of Andhra Pradesh”. The work will start within 15 days upon receiving the Letter of Authorization (LOA). The rate contract will remain valid for a period of 1 year.
Earnings & Stock Performance:
In FY23, HG Infra witnessed robust revenue growth, increasing by 23.21% from Rs 3751 crore to Rs 4622 crore. The company maintained an operating profit margin of 19%. Furthermore, it reported a profit after tax (PAT) of Rs 493 crore, marking a significant increase of 30% compared to the previous year’s figure of Rs 380 crore with a PAT margin of 10%. The stock has PE of 12.1x, while ROE and ROCE 29.4% and 25.4% are respectively.
As of Wednesday, the shares closed at Rs 916.65 on the BSE, reflecting a decline of 1.48% compared to the previous day’s closing price of Rs 930.45. The company currently holds a market capitalization of Rs 5982 crore. Its 52-week price range is Rs 977.60 (highest) and Rs 509 (lowest), with the stock currently trading very close to its all-time high of Rs 977.60. Over the past three years, the stock has demonstrated an impressive CAGR return of 81%. However, in the most recent year, it witnessed a growth of 70%.
The promoter’s shareholding stands at 74.53%, while FII hold 1.34% of the company’s shares. DII holds a stake of 14.01%, and the remaining 10.12% is held by the public shareholders.
HG Infra holds a comparatively lower price-to-earnings (PE) ratio than the industry average, accompanied by impressive ROE and ROCE. The stock exhibits a promising secular trend on charts and is currently trading near its all-time high. The company’s order book has experienced rapid growth, achieving a remarkable 22.6% CAGR return over the past five years. Furthermore, there is significant potential for further expansion in the near future. Hence, it is advisable to closely monitor this stock as it holds considerable potential.