Geojit Financial Services research report on H.G. Infra Engineering
HG Infra Engineering Ltd. (HG Infra) is one of the emerging EPC players in India, with over two decades of rich experience in road construction. It is primarily engaged in roads and allied sectors like flyovers, bridges, and irrigation. In Q1FY25, HG Infra registered a better than estimated revenue growth of 18% YoY, led by superior execution of projects. The order book grew by 34% YoY to Rs. 15,642cr (~3x TTM revenue), providing revenue visibility for the next 2 to 3 years. Gross margin improved by 175bps YoY to 55.2%, owing to strong execution and cost control measures, while EBITDA margin remains steady at 16.2%. The company maintains an order inflow of Rs 11,000cr to Rs12,000cr in FY25, and we expect the order book to grow at a CAGR of 33% over FY24-FY26E.
Outlook
The order inflow pipeline remains healthy and HG Infra expects traction in highways, railways, water and solar orders in FY25. Therefore, we maintain our Accumulate rating and value the standalone business at a P/E of 17x FY26E and HAM projects at 0.7x P/BV with a TP of Rs.1,788.
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H.G. Infra Engineering - 120824 - geo
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