Buy HG Infra Engineering, target price Rs 820: Emkay Global

Emkay Global has buy call on HG Infra Engineering with a target price of Rs 820. The current market price of HG Infra Engineering is Rs 609.95. Time period given by analyst is one year when HG Infra Engineering Ltd. price can reach defined target.

HG Infra Engineering Ltd., incorporated in the year 2003, is a Small Cap company (having a market cap of Rs 4006.72 Crore) operating in Infrastructure sector.

HG Infra Engineering Ltd. key Products/Revenue Segments include Contract Revenue and Sale of services for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 960.25 Crore, up 22.09 % from last quarter Total Income of Rs 786.52 Crore and up 27.32 % from last year same quarter Total Income of Rs 754.18 Crore. Company reported net profit after tax of Rs 100.56 Crore in latest quarter.

Investment Rationale
The brokerage has cut FY23E/FY24E EPS by ~6% each, factoring in 75bps cut in margin and 0-3% cut in revenue. It has estimated EBITDAM of 15.4%/15.3% for FY23E/FY24E on increased commodity price. Its FY23E/FY24E EPS stand at Rs52.74/Rs59.72. The stock trades at ~9.5x FY24E EPS.

Promoter/FII Holdings
Promoters held 74.53 per cent stake in the company as of 31-Dec-2021, while FIIs owned 1.26 per cent, DIIs 13.93 per cent.