HG Infra extends gain after winning EPC project in Rajasthan

The stock was trading 2% higher at Rs 302, extending its past two days 10% surge on the BSE in otherwise weak market.

HG Infra Engineering (HGIEL) was trading 2% higher at Rs 302, extending its 10% rise in past two sessions on the BSE, after the company said it has been declared lowest bidder (L-1) for a new EPC project under Ministry of Road Transportation & Highway (MORTH) for upgradation to two lanes with paved shoulder configuration of the Kundal-Jhadol section of NH-58E in Rajasthan. 

The completion period for the project is 18 months, it said.

The stock hit an intra-day high of Rs 311, its highest level since listing on March 9, 2018. A combined 338,041 equity shares changed hands on the counter on the BSE and NSE. On comparison, the S&P BSE Sensex was trading 0.35% lower at 33,061 at 11:42 am.

HGIEL is a road infrastructure construction company, mainly involved into the execution of EPC contracts. In the last five years, it has completed 13 projects in the roads & highways sector aggregating to a total contract value of Rs 16,749 million.

On financial performance front, HGIEL has demonstrated solid and impressive results over FY14-17. During the period with the execution of the projects, the company has reported a 30.8% and 33.2% CAGR rise in the operating revenue and EBITDA (Earnings before interest, tax, depreciation and amortised expenses). EBITDA margin expanded by 60bps over FY14-17 to 11.4% in FY17. Reported profit after tax (PAT) increased by 69.8% CAGR with expansion in PAT margin by over 2.7 ppts over FY14-17 to 5.1% in FY17. Average RoIC and RoE stood at 28.5% and 19.6%, respectively, over FY14-17,” the brokerage firm Choice Broking said in IPO note.