Buy HG Infra; target of Rs 408: 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 of Rs 7.3bn, 10.5% beat to our estimate and 28% YoY growth. The company also surprised positively on margins (16.1% vs 15% estimated), leading to 39% beat on APAT. While HG did not secure any orders during 9MFY21, it aims to win Rs 30-40bn during FY21. Order backlog is robust at Rs 59.7bn (~3x FY20 Rev). Standalone net debt reduced to Rs 1.1bn from Rs 1.7bn in Dec-20.

Outlook

We increase our FY21 estimates to factor in robust quarter and maintain BUY with an SOTP-based TP of Rs 408/Sh, valuing the EPC business at 10x Dec22E EPS. With concerns over Rajasthan receivables receding, high competitive intensity in NHAI ordering remains a key risk.

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