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Buy H G Infra Engineering; target of Rs 311: Anand Rathi

Anand Rathi is bullish on H G Infra Engineering has recommended buy rating on the stock with a target price of Rs 311 in its research report dated June 29, 2020.
Jun 30, 2020 / 12:01 PM IST
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Anand Rathi 's research report on H G Infra Engineering

Despite being subject to the covid disruption, H G Infra’s Q4 revenue performance was comforting. Coupled with strong inflows augmenting the backlog, the company seems to have delivered on two key fronts. Slow-reduction in debt and high working capital remain key monitorables, but management expects these to be addressed in FY21. With a large chunk of its order backlog yet-to-get moving, the company not only has enough to fuel an execution ramp-up but is also insulated from any short-term awarding lull. Healthy execution capabilities, scope for a further execution ramp-up and a de-leveraging roadmap lead us to retain our Buy rating.


Adjusting for the pandemic impact, FY21e earnings are ~36% lower (~15% for FY22). Our sum-of-parts-based TP is revised from `404 to `311, derived using 8x FY22 construction EPS and investments at 0.8x of invested value. At the CMP, the stock (excl. investments) trades at 5.2x FY22e EPS.

For all recommendations report, click here

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first published: Jun 30, 2020 12:01 pm

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