HG Infra Lands Rs.781 Crore Road Project in Gujarat

HG Infra Engineering Ltd. secured a big project with a Rs.781 crore contract from the Ministry of Road Transport and Highways (MoRTH). Announced recently, this project is all about upgrading a 10.630 km stretch of National Highway 47 (NH-47) in Gujarat, from Narol Junction to Sarkhej Junction. The plan includes adding an elevated corridor, and the whole thing should wrap up in about 2.5 years, using the hybrid annuity model (HAM).

What’s New & How It’s Affecting the Stock

In August, three of HG Infra’s promoters sold a 2.74% stake in the company for Rs.281.36 crore through open market transactions. This news led to a dip in the company’s share price, which ended the day 2.37% lower at Rs.1,456.95 per share. But the mood improved quickly—the shares bounced back with a 4% increase to Rs.1,526 per share on September 10, thanks to the new contract.

HG Infra has been on a roll lately. Last month, they were the lowest bidder for another road upgrade in Gujarat. The estimated cost for that project was Rs.883.24 crore, but HG Infra’s bid came in at Rs.781.11 crore. Based in Rajasthan, HG Infra is known for a range of infrastructure services, from roads and bridges to runways and water pipelines, plus rehab and upgradation projects.

Financials & Performance

The company’s recent financials are looking good. For the June quarter, HG Infra saw a 13% year-on-year revenue increase, hitting Rs.1,528 crore. Net profit climbed over 8% YoY to Rs.162.6 crore. EBITDA grew by 12.1% YoY to Rs.332 crore, with margins ticking up to 19.5%, showing cost control.

The stock has been shooting up this year, jumping around 80% compared to the Nifty 50’s 16% rise. It even hit a 52-week high of Rs.1,880 per share on July 16, 2024. Analysts are mostly bullish, with 13 out of 14 brokerage firms recommending a “buy.”

Conclusion: Wrapping up, HG Infra’s project  highlights their strong position in the infrastructure game. The Rs.781 crore deal for NH-47 is just another feather in their cap, proving they’re on a good growth path. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.