Buy HG Infra Engineering Ltd For Target Rs.947 - Yes Securities
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Our view
H G Infra Engineering Ltd’s (HGINFRA) reported stellar quarterly performance beating our and street estimates owing to robust execution of its under-construction portfolio. Company bagged orders worth Rs6.9bn in Q3 taking the orderbook to Rs111bn (2.8x TTM revenue). Going ahead, given robust bid pipeline and large part of OB under execution management is confident of achieving revenue of Rs45bn in FY23E and has given revenue guidance of Rs55-56bn in FY24E with EBIDTAM in the range of 15-16%.
We remain positive on the company given its 1) comfortable order book (~Rs111bn as on 3QFY23), 2) strong execution capabilities, 3) comfortable working capital cycle, 4) geographical diversification and 5) its transition into full-fledged contractor and focus on asset monetization. Given stellar 3Q performance, we have revised our revenue estimates for FY23E/24E/FY25E upwards by 7%/13%/11%. We expect the company to post revenue/EBIDTA CAGR of 16%/18% over FY22/FY25E. At CMP, the stock trades at a P/E of 11.3x/9.2x on FY23E/FY24E EPS and an EV of 6.8x/5.6x FY23E/FY24E EBITDA. We maintain BUY rating with a revised target price of Rs947/share, implying an upside potential of 38% from the current levels.
Result Highlights
* For Q3FY23, HGInfra reported strong revenue growth of 22.6%YoY to Rs11.3bn (above our/ street estimates of Rs9.8bn) led by strong execution.
* EBITDA came in at Rs1.9bn up 24.5% YoY (above our estimate of Rs1.5bn), with EBITDAM expanding 25bps to 16.7% (above Ysec estimate of 15.7%) on account of lower raw material cost.
* On bottom-line front, adj. PAT came at Rs1.1bn (above our estimates of Rs912mn) driven by better operating performance.
* During 3QFY23, the company has bagged orders worth Rs14bn received AD for Ganga Expressway project, Khammam Devarapalle Pkg-1 and 2.
* At the CMP, the stock trades at a PE of 11.3x FY23E and 9.2x FY24E EPS.
To Read Complete Report & Disclaimer Click Here
Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632
Above views are of the author and not of the website kindly read disclaimer
