Dolat Capital is bullish on H.G. Infra Engineering has recommended buy rating on the stock with a target price of Rs 456 in its research report dated May 27, 2019.
Dolat Capital's research report on H.G. Infra Engineering
HGINFRA posted a 15.1% YoY growth in revenue in Q4FY19 (highest quarterly revenue in its history) to `5.8 bn (11.6% below our estimate), due to muted execution. The EBITDA margin was up 46 bps YoY to 16.1% (116 bps above our estimate), primarily due to a lower construction cost at 76.6% of revenue, which was partially offset by higher employee and other expenses. The PAT was up 2.1% YoY to `367 mn (19.5% below our estimate), due to a higher tax rate of 37.6% vs. 21.1% (Q4FY18).
We expect revenue/ Adj. PAT CAGR of 23.9%/ 30.3% over FY19-21E. HGINFRA looks attractive at 11.3x/ 9.1x FY20E/ FY21E EPS, hence we maintain BUY, with a SOTP of `456 (13x FY21E EPS) and 1xFY21E P/B for HAM equity investments.
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