HG Infra Engineering Ltd: A Multibagger Stock with Potential for Further Growth
Shares of HG Infra Engineering Ltd, a multibagger in the infrastructure sector, continue to attract investor attention with their impressive long-term performance. Having delivered substantial returns over the years, this stock appears poised for another rally in 2025, as predicted by brokerage firm YES Securities. According to the brokerage’s estimates, HG Infra shares are expected to climb another 26% to reach Rs 1,783 by the end of 2025. Here’s a detailed analysis of the stock’s past performance, current standing, and future prospects.
Outstanding Past Performance
Over the last few years, HG Infra Engineering Ltd has demonstrated remarkable growth:
- Two-year gain: The stock has surged by 120%.
- Three-year gain: Investors have witnessed a 142% increase in value.
- Five-year gain: The stock has skyrocketed by an impressive 463%.
This consistent performance underscores the company’s ability to deliver value to its shareholders over the long term.
Current Market Position
In the current trading session on the Bombay Stock Exchange (BSE), HG Infra shares are priced at Rs 1,457.70. The company’s market capitalization stands at Rs 9,499 crore. The stock opened the day flat at Rs 1,465, with a modest turnover of Rs 1.62 lakh as 111 shares changed hands during early deals.
Volatility and Technical Indicators
The stock exhibits a beta value of 1.3, suggesting high volatility compared to the market average. Despite this, the stock is neither overbought nor oversold, as indicated by a Relative Strength Index (RSI) of 50.8. The stock’s trading patterns reveal mixed signals:
- Below: 5-day, 10-day, and 20-day moving averages.
- Above: 30-day, 50-day, 100-day, 150-day, and 200-day moving averages.
A Robust Order Book Drives Optimism
YES Securities attributes its bullish outlook on HG Infra to the company’s strong and diversified order book. The details of the order book are as follows:
- Total value: Rs 166.2 billion.
- Roads and highways: Rs 123.2 billion (75% of the total).
- Railways and metro projects: Rs 23.8 billion (14%).
- Solar projects: Rs 19.1 billion (11%).
The company has set an ambitious target for order inflows, aiming for Rs 110-120 billion in the current fiscal year. So far, it has already secured approximately Rs 55 billion in highway projects and Rs 7.8 billion in solar sector projects. Additionally, HG Infra has submitted bids for projects worth Rs 300 billion and is awaiting results.
Key Investment Highlights
HG Infra Engineering Ltd presents a compelling investment opportunity due to several factors:
- Diversified Portfolio: The company’s order book spans high-growth infrastructure segments, including roads, railways, and renewable energy projects. This diversification reduces risk and ensures steady revenue streams.
- Proven Execution Capabilities: HG Infra has a strong track record of successfully delivering complex infrastructure projects, bolstering its reputation and attracting new business opportunities.
- Presence in Growth Sectors: The company’s focus on infrastructure areas with significant growth potential, such as highways, railways, and renewable energy, positions it well for sustained success.
Financial Performance
Despite the optimistic growth prospects, HG Infra’s recent financial performance has been mixed. In the second quarter of FY25, the company reported a 16% year-on-year (YoY) decline in net profit:
- Net profit: Rs 80.7 crore, down from Rs 96.1 crore in the same quarter last year.
- Revenue: Fell by 5.5% YoY to Rs 902.4 crore, compared to Rs 954.5 crore in Q2 FY24.
- EBITDA: Marginally declined by 0.3% to Rs 219.5 crore from Rs 220.1 crore in Q2 FY24.
While these figures reflect short-term challenges, the company’s robust order book and strategic focus on high-growth sectors suggest that it is well-positioned to overcome these hurdles and deliver long-term value.
Business Overview
HG Infra Engineering Ltd operates in the engineering, procurement, and construction (EPC) space, specializing in the maintenance and development of roads, bridges, flyovers, and other infrastructure projects. The company’s expertise and experience in handling complex infrastructure projects make it a preferred partner for both government and private sector clients.
Conclusion
HG Infra Engineering Ltd’s strong order book, proven execution capabilities, and focus on high-growth infrastructure segments make it an attractive investment opportunity. While recent financial performance reflects some short-term challenges, the company’s strategic initiatives and diversified portfolio position it well for sustained growth. As YES Securities predicts a potential 26% upside in 2025, HG Infra continues to be a promising player in India’s booming infrastructure sector.
Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.