Buy HG Infra; target of Rs 337: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on HG Infra

HG Infra reported revenue at Rs 3bn (7% miss). However, APAT was nearly 3x our estimate on better than expected EBITDA margin and lower interest expense. Labour availability has improved to 85% of the required labour force. While HG did not secure any orders during the quarter, it aims to win Rs 30-40bn during FY21. Order backlog is robust at Rs 68bn (3.1x FY20 revenue). Standalone net debt increased to Rs 2.7bn from Rs 2.5bn on Mar-20 as working capital nearly doubled to Rs 1.4bn from Rs 0.7bn on Mar-20. Realization of receivables from Rajasthan project key for reduction in debt.

Outlook

We maintain BUY on HG with a SOTP based target price of Rs 337/sh, valuing the EPC business at 10x FY22E EPS. Key risks: (1) slowdown in NHAI ordering and (2) delays in receipt of pending dues from the Rajasthan project.

For all recommendations report, click here

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