Stocks of HG Infra Engineering (NSE: HGINFRA) increased 5% to Rs 1,574 in the early trading today.
The main reason for this rally in the stock is the order of Rs 716 crore received by the company from Central Railways on Thursday.
HG Infra Engineering specializes in the development, construction, design, and handling of diverse infrastructure projects.
In the company’s filing, the LoA is to lay the new line of broad gauge connecting Dhule and Nardana.
Which covers around 49.45 kilometers under the contract for engineering and procurement mode.
The second major contract of HG Infra after a contract with a value of 781 crores by the Ministry of Road Transport and Highways on Monday to improve the road to six lanes located in Gujarat.
In August the company also landed an order for work worth 883 crore from MoRTH for the elevation of an existing six-lane highway.
The creation of an elevated roadway that runs between Narol Junction and Sarkhej Junction on NH-47 in Gujarat in the hybrid annuity mode.
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Rain Of orders
The company is raining orders. At the end of June’s quarter, the total order book was worth Rs15,642 crore, equivalent to three times FY24’s revenue.
91% of these projects are funded by the government of India and the remaining 9% are from private industry.
The company is expanding its portfolio apart from road and railway projects. On March 24, it secured its first solar project, costing Rs 1,307 crore from JDVVNL in Rajasthan.
This project has been a cooperative venture where HGEIL owns a 65 % stake.
In addition, the company would like to secure contracts in the water sector to further diversify its business portfolio.
Domestic brokerage firm said in its latest note that the company can benefit from strategic diversification. The company expects orders of 10,000-2,000 crore for FY25.
The company expects orders of 10,000-2,000 crore for FY25.
It is expected to increase the amount by 8000 crores from highway projects, Rs 2,000 crore from railway projects, and Rs 1,000 crore from water and solar projects.
The management of the company expects 35-40 percent of its orders book to be from projects that are not road-related in the next 2 to 3 years..
In April, the stock posted its biggest monthly profit in three years, rising 30 percent.
This boom continued in the next two months with a 27 percent rise in May and 17 percent in July.
Investors Got Strong Returns
The company has seen its shares rise 147 percent in less than two years and an astonishing 727 percent in just 5 years.
The stock has yielded an 83 percent return on its stockholders. The company’s revenue increased 18 percent over the year to reach Rs 1.506 crore.
The company posted a revenue of Rs 243 crore, up 19 percent year-on-year, and an EBITDA of Rs 140 crore, up 18 percent year-on-year.
Quick Fact
| Company name | HG Infra Engineering |
|---|---|
| Specialization | Development, construction, design of infrastructure projects |
| Recent stock increase | 5% rise to ₹1,574 |
| Recent major order | ₹716 crore from Central Railways |
| Project details | New broad gauge line between Dhule and Nardana (49.45 km) |
| Mode of contract | Engineering and procurement |
| Previous order | ₹781 crore contract for six-lane road in Gujarat (MoRTH) |
| August 2023 order | ₹883 crore contract for NH-47 road elevation (Narol to Sarkhej Junction, Gujarat) |
| Total order book (June 2024) | ₹15,642 crore |
| Government-funded projects | 91% of orders funded by the government |
| Private sector projects | 9% of orders from private industry |
| Solar project | First solar project worth ₹1,307 crore from JDVVNL in Rajasthan |
| Company stake in solar project | 65% |
| Future diversification | Focus on securing contracts in the water sector |
| Expected FY25 orders | ₹10,000-₹12,000 crore |
| Highway project target | ₹8,000 crore |
| Railway project target | ₹2,000 crore |
| Water and solar project target | ₹1,000 crore |
| Non-road projects projection | 35-40% of order book in next 2-3 years |
| Stock rise (April 2023) | 30% |
| Stock rise (May 2023) | 27% |
| Stock rise (July 2023) | 17% |
| Stock performance in 2 years | 147% increase |
| Stock performance in 5 years | 727% increase |
| Return to shareholders | 83% |
| FY24 revenue growth | 18% (₹1,506 crore) |
| EBITDA growth | 18% (₹140 crore) |
| Revenue growth YoY | 19% (₹243 crore) |
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