Buy HG Infra Engineering, target price Rs 870: Emkay Global

Emkay Global has buy call on HG Infra Engineering with a target price of Rs 870. The current market price of HG Infra Engineering is Rs 652.25. 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 4235.47 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 raises FY22E sales/PAT by 8%/11%, factoring in strong execution and inflows. The brokerage increases FY23/FY24E EPS by 2-4%. It believes the trajectory of inflows has moved from Rs20-40bn to Rs50-60bn in the last two years. With a strong balance sheet, RoE profile and diversification in the medium term, the stock is a good candidate for further re-rating. It maintains Buy with a TP of Rs870 (Mar'23E), based on 13x FY24E EPS and 1x the investment in HAMs.

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.