The domestic equity market has been witnessing downfall since the last few sessions. If you are looking to invest in a multibagger stock for a decent return, you can check out this infrastructure stock — HG Infra Engineering. The current market price of HG Infra Engineering is Rs 652.25. HDFC Securities has given a ‘buy’ rating on HG Infra Engineering with a target price of Rs 988. Time period given by analyst is one year when HG Infra Engineering Ltd. price can reach defined target.
ICICI Direct has also maintained the ‘buy’ tag for this HG Infra Engineering and mentioned the target price at Rs 885.
Incorporated in the year 2003, HG Infra Engineering Ltd., operates in Infrastructure sector. It has a market capitalisation of Rs 4,235.47 crore. HG Infra Engineering Ltd. key products or revenue segments include contract revenue and sale of services for the year ending March 31, 2021.
HG Infra’s share price has grown 2.4 x over the past four years — from around Rs 267 in March 2018 to Rs 630 levels in February 2022. All major brokerages has maintained ‘buy’ rating on the multibagger stock, that has rallied over 127 per cent in a year’s period.
“HG is likely to be one of the major recipients of thriving roads, railways and water supply segments, the note stated. Healthy order inflows to aid its order book position. Strong order book position, receipt of appointed date in most of its projects, and execution pick-up to translate into 19.9 per cent topline CAGR over FY21-24E,” HDFC Securities said the report.
HG Infra Engineering Financials
HG Infra Engineering’s profit after tax has increased 35.6 per cent year-on-year to Rs 88.9 crore in the third quarter of financial year 2022. The the company has seen a 24.7 per cent year-on-year jump in the revenue to Rs 915.6 crore in Q3FY22. The earnings before interest, taxes, depreciation, and amortization or EBITDA has jumped 22.9 per cent year-on-year to Rs 145.2 crore during the quarter under review. EBITDA margin stands at 15.9 per cent in Q3FY22.
HG Infra Engineering: Should you Invest?
HG Infra Engineering Ltd. is likely to be one of the major recipients of thriving roads, railways and water supply segments. Healthy order inflows to aid its order book position. Strong order book position, receipt of appointed date in most of its projects, and execution pick-up is likely to translate into 19.9 per cent topline CAGR over FY21-24E, ICICI Direct said.
On December 31, 2021, HG Infra’s order book was at Rs 7,950.2 crore. Besides, it has also secured Neelmangala-Tumkur road project in Karnataka amounting to Rs 844.1 crore on an EPC basis post Q3FY22. The management has guided for
overall order inflows of Rs 6,000 crore during FY22. Out of which, the company has already bagged Rs 4,325.8 crore worth of projects during year-to-date FY22.
On the execution front, the improved momentum is likely to continue with a) its healthy order book position, and b) receipt of appointed date in most of its projects. The current order mix with built-in raw material price variation clauses in most of its contracts will help margin to sustain at 15.5 per cent to 16 per cent. The report added double-digit return ratios and lean balance sheet position are the key triggers for the future price performance.
Promoter/FII Holdings
Promoters held 74.53 per cent stake in HG Infra Engineering Ltd. as of December 31, 2021, while FIIs owned 1.26 per cent, DIIs 13.93 per cent.
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