Buy HG Infra; target of Rs 1201: HDFC Securities

HDFC Securities is bullish on HG Infra has recommended buy rating on the stock with a target price of Rs 1201 in its research report dated August 01, 2023.

Broker Research

August 04, 2023 / 11:09 IST

Buy

26 Aug, 2025 12:21

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HDFC Securities' research report on HG Infra

HG Infra (HG) reported a muted quarter, missing our estimates on all fronts by 8.2/6.9/11.1%. The OB as of Jun’23 stood at INR 116.7bn (~2.6x FY23 revenue). It reiterated its FY24 revenue guidance at INR 50-55bn (+ 20-25% YoY) with an EBITDA margin of ~16%. On the order inflow front, it slashed its guidance from INR 80-90bn to INR 70-80bn. The total equity requirement in twelve HAM projects is INR 15.9bn, of which INR 7.6bn is already infused as of Jun’23. HG guided for infusing INR 4.1/2.7/1.6bn in the balance part of FY24/FY25/26. Further, it guided for incurring a capex of INR 1bn for FY24/25 each. The standalone net debt, as of Jun’23, increased to INR 5.5bn.

Outlook

The company expects to receive monetisation proceeds from three out of four HAM projects by Q3FY23. Given strong execution and robust OB, higher level of execution and better EBITDA margin, we maintain BUY, with an increased TP of INR 1,201 (14x Jun-25E EPS rolled over).

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