HG Infra revenue shrinks 47%, broker sets target at Rs 535

HG Infra Engineering reported a weak quarter with revenue shrinking 47% year-on-year to Rs 900 crore, due to delays in appointed dates, supply chain issues and project-specific hurdles, according to a broker's note from The Hindu Business Line. EBITDA declined 67% to Rs 77 crore as margins shrank 530 basis points to 8.5%. The company posted an adjusted loss of Rs 1.8 crore against an adjusted profit of Rs 130 crore a year ago. It booked a one-off profit of Rs 30.1 crore from the sale of three HAM assets.

The company's order book stood at Rs 14,500 crore, driven by strong inflows from the highway sector. However, the executable order book was only Rs 8,000 crore due to land acquisition delays and project-level hurdles. The management trimmed its FY27 revenue guidance to Rs 6,000-6,500 crore from an earlier Rs 7,000 crore, citing slower execution ramp-up. It maintained margin guidance at 13.5-14% and order inflow guidance at Rs 11,000-12,000 crore.

The broker maintained a Hold rating on the stock with a sum-of-the-parts based revised target price of Rs 535, down from Rs 610, baking in a slower pace of execution than the guidance implies due to execution risk from a smaller executable order book.