BLOG
HG Infra - A Beneficiary of strong order inflows
HG Infra Engineering Ltd is a Jaipur (Rajasthan) based infrastructure company having primary focus on Roads and along with railways and solar sectors. Additionally, the company is actively looking to diversify itself by targeting into water infra segment. It reported 20.6% revenue CAGR over FY19-24 with sustained operating margin driving ~30.3% earnings CAGR over the same period
Strong order book: The orderbook as of Q1 stood ₹15,642 crore (2.9x TTM book to bill). The company expects order inflows of ~₹ 11000-12000 crore in FY25, with 60% inflows likely from Road and remaining being non road segments. During Q1, the company has won orders worth ~₹ 4905 crore and further ₹ 1600+ crore in Q2.
Healthy Revenue and earnings growth: The company has guided for 18-20% revenue growth in FY25 with stable margins of 15-16%. We have baked in ~18% CAGR in topline over FY24-26E to ₹ 7135 crore. Sustained margins at 15.6-16% would ensure, ~22% CAGR in earnings over FY24-26E
Our view: Considering its executable order book position and robust execution, we expect healthy topline and earnings growth over FY24-26. Additionally, strong balance sheet, return ratios and healthy working capital cycle remain key positives ahead.
We value HG at ₹ 1885 on SoTP basis.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.