Emkay Global Financial's research report on HG Infra Engineering
HGIEL‘s makeover from a small subcontractor into a diversified infra play offers best-in-class operating & financial metrics and has supported swift, stress-free growth. HGIEL‘s mainstay (roads) saw order slow-down in FY24 in the run up to the elections and due to restrictions on MoRTH-NHAI (cost overrun in Bharatmala, NHAI issues, aggressive past). But the GoI‘s new Vision India@2047 plan in a post-election cycle is expected to revive awarding (mgmt. guides to Rs120bn total inflows in FY25 vs Rs45bn in FY24). HGIEL is also expanding into Railways where focus on high-speed corridors, freight, & station upgrade should support mid-term growth. Solar and Water are other prospects, with Rs13bn worth orders already secured under solar scheme Kusum.
Outlook
We re-initiate coverage on HG Infra (HGIEL) with a BUY and SOTP-based TP of Rs2,100/sh.
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