Buy HG Infra Engineering, target price Rs 1904: HDFC Securities

HDFC Securities has a buy call on HG Infra Engineering Ltd. with a target price of Rs 1904. The current market price of HG Infra Engineering Ltd. is Rs 1192.9. HG Infra Engineering, incorporated in 2003, is a Small Cap company with a market cap of Rs 7872.02 Crore) operating in Infrastructure sector.

HG Infra's key Products/Revenue Segments include Contract Revenue, Sale of services and Scrap for the year ending 31-Mar-2024.



Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 906.11 crore, down -40.85% from last quarter Total Income of Rs 1531.79 crore and down -5.38% from last year same quarter Total Income of Rs 957.67 crore. The company has reported net profit after tax of Rs 80.40 crore in latest quarter.

Investment RationaleHG Infra recently made a pivotal shift in its OB inflows from road to railways indicating its robust diversification strategy, and it further expects to diversify in the water segment by securing new orders. Equity infusion guidance for H2FY25/26/27 stands at Rs 3.7/ 1.7/1.31 billion. The standalone gross/net debt as of Sep?24 stood at Rs .8/7.7 billion vs. Rs 6.2/5.1 billion, as of Jun?24. Given robust OB, likely pick-up in project execution and a healthy balance sheet, HDFC Securities maintains BUY on HG, with a target price of Rs 1,904 (16x 1-year forward).

Promoter/FII Holdings
Promoters held 71.78 per cent stake in the company as of 30-Sep-2024, while FIIs owned 2.6 per cent, DIIs 12.7 per cent.