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Dolat Capital noted that HG Infra Engineering won orders worth Rs 2,180 crore and Rs 4,330 crore during FY 2011 and FY 2012 respectively. The current order book of Rs 7,970 crore provides visibility for 2.2x TTM revenue, it said.
FY13 sees order flows in the range of Rs 9,000-10,000 crore with EBITDA margin in the range of 15.5-16 per cent. He believes the company is well positioned to grow its revenue and profitability going forward.
Besides, the government’s thrust on expansion of national highways and taking the total length of highways to more than 2 lakh km in the next 5 years is likely to create more opportunities for the company.
“With ongoing growth across the entire infra space, a strong and diversified order book position, company execution prowess, asset monetization plan and a lean balance sheet, we expect it to generate revenue, EBITDA, APAT of 24%, 26% and 33% CAGR, respectively, over FY21-24E,” Axis Securities said.
It has marinated a ‘Buy’ rating on HG Infra as it values ​​the EPC business at 9x FY24E EPS and HAM portfolio at 1x book value to reach a target price of Rs 850 per share.
“We expect net working capital (excluding cash) at a comfortable level of 84 days for FY12, 115 in FY 2012E, FY 2013E and FY 24E respectively and 91 in FY11 and 91 in FY11. We expect revenues to remain the same in the year 2011. APAT 25.7 per cent and 25.8 per cent, respectively, as compared to FY22-24E,” said analysts at Dolat Capital.
Despite stock prices up 79 percent year-on-year, brokerage finds
Attractive at 6x/4.5x FY23E/ FY24E core construction EPS. It has maintained ‘Buy’ on the stock with SOTP of Rs 1,139.
Amid bullish views, analysts
Securities have flagged raw material pressure as a concern and hence cut EPS estimates by 5.1 and 7 per cent for FY 2013E and 24E. That said, its target price of Rs 932 suggests an increase of over 60 per cent over the previous close.
Emkay Global also maintained a ‘Buy’ call on HG Infra Engineering with a target price of Rs 820.
The company reported a nearly 6 per cent decline in consolidated profit after tax at Rs 103.9 crore for the fourth quarter ended March 2022. It had reported profit after tax of Rs 111 crore a year ago. The total income stood at Rs 1067.26 crore, an increase of 11.14 per cent over the previous quarter and 0.35 per cent higher than the corresponding quarter last year.
Promoters held 74.53 per cent stake in the company as on March 31, 2022, while FIIs held 0.74 per cent and DIIs held 14.07 per cent.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)
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