According to Emkay Global Research, HG Infra Engineering Ltd.’s « top-notch » financial and operating indicators and positive order flow outlook post-election will drive growth.
The brokerage firm has re-initiated coverage on the company with a ‘buy’ rating and a price target of Rs 2,100 per share, implying a 24% upside from Tuesday’s closing price.
HG Infra Engineering’s transformation from a small subcontractor to a diversified infrastructure segment with good operational and financial metrics has supported rapid and stress-free growth, Emkay Global said in a note on Tuesday.
The company is managing its supply chain and inventory efficiently. Its digitalization initiatives are “top-notch,” as is its deft working capital management, the note said. HG Infra Engineering’s balance sheet has also remained stable.
The infrastructure company has seen a slowdown in orders in fiscal 2024 due to general elections and restrictions imposed on the National Highways Authority of India, Emkay Global said.
The research firm expects an increase in project awards in the coming months under the ‘India@2047’ vision. Further announcements on road network development may take place.
Emkay Global Research has forecast a 22%, 20% and 21% decline in revenue, EBITDA and APAT during FY24-27 as order intake will increase in the road infrastructure segment, the brokerage said.
HG Infra Engineering also expects rapid growth in its rail and solar portfolio, the brokerage said.