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H.G. Infra Engineering Ltd.

BSE: 541019 Sector: Infrastructure
NSE: HGINFRA ISIN Code: INE926X01010
BSE 00:00 | 16 Apr 266.10 -0.40
(-0.15%)
OPEN

267.60

HIGH

267.60

LOW

254.20

NSE 00:00 | 16 Apr 265.65 -1.15
(-0.43%)
OPEN

266.80

HIGH

267.80

LOW

254.50

OPEN 267.60
PREVIOUS CLOSE 266.50
VOLUME 3295
52-Week high 330.45
52-Week low 150.65
P/E 10.54
Mkt Cap.(Rs cr) 1,734
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 267.60
CLOSE 266.50
VOLUME 3295
52-Week high 330.45
52-Week low 150.65
P/E 10.54
Mkt Cap.(Rs cr) 1,734
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

H.G. Infra Engineering Ltd. (HGINFRA) - Chairman Speech

Company chairman speech

We continued to profit from our operating discipline in 2018-19 growing faster thanthe sectoral average Company last year following our In the first annual report ofourinitial public offer we had indicated an annual revenue growth of 30% which we laterrevised upward. I am pleased to report that we achieved our guidance with Rs. 2010 crorerevenue a 44% growth in 2018-19. The Company reported profitable growth for the year withpercentage growth in bottom-line of 47% being higher than the percentage increase in ourtopline. This was achieved through our established culture of operational discipline ourcompetitiveness in an exciting segment and our desire to grow into one of the mostsuccessful companies in India’s infrastructure sector. At HG Infra we areattractively placed to carve out larger projects. In the last five years we strengthenedour project qualification eligibility from Rs. 1120 crore to Rs. 1750 crore (as onMarcRs. 31 2019). Besides our net worth strengthened from Rs.541 crore to Rs.659 crore.

To most it will appear as if our 2018-19 performance was derived from smooth sailing ata time of unprecedented sectoral growth. I must apprise our stakeholders that the realitywas far more challenging than what may appear - for some good reasons.

One the increase in concurrent multi-locational projects and larger size projectspresented us with the challenge to manage this growth in a controlled manner. Twowe needed to complete projects on schedule generate cash flows and reinvest in thebusiness with the objective of enhancing multi-year business sustainability. Threethere was a challenge of growing our order book that would sustain our prospective growthand profitability. During the course of the year the Company practiced what it had alwaysprofessed – the need to be disciplined across market cycles contract sizes andprojects. As a result of our bidding discipline that we demonstrated during the year underreview order inflows were slow during the initial part of the financial year underreview. However we were convinced that what we were doing was absolutely right from theperspective of long-term business success and sustainability.

I am happy to communicate that our discipline was vindicated. The Company receivedRs.3891 crore orders during the year at its desired IRR strengthening its overall orderbook from Rs.4607 crore as on MarcRs. 31 2018 to Rs.6222 crore as on MarcRs. 31 2019.We ended the financial year under review with the integrity of our Balance Sheet intactour receivables cycle virtually unchanged and our gearing at 0.57 (compared witRs. 0.75 inthe previous financial year) which indicate that the Company is attractively placed togenerate sustainable growth from this point onwards. At HG Infra we are engaged inbuilding more than just roads highways and infrastructure projects. We are engaged inbuilding an institution across the long-term.

At the core of our commitment lies the strength of our governance process. At ourcompany the word ‘governance’ carries an over-riding connotation: the positionand respect to be completely trusted by all stakeholders at all times. I am pleased tocommunicate that the Company deepened its governance commitment during the course of theyear under review. This commitment was most visible in the strengthening of the Board ofDirectors and people competencies. The Company strengthened its Board through theappointment of a retired member of Indian Administrative Service. The execution team wasalso strengthened over the last few years with professionals joining across teams andfunctions including a new COO. Besides the Company added over 670 employees through theyear connecting order book throughput at one level with an enhanced ground-level abilityto deliver at the other. We believe that by plugging the various managerial and competencegaps we are creating a well-rounded organization that is more attractively placed todayto capitalize on sectoral opportunities than ever.

We reinforced our commitment to deliver projects on schedule through a sustainedinvestment in cutting-edge technologies and equipment. The Company invested proactively inSAP the benefits of which were reflected during the last financial year. The SAPinvestment did not just help moderate costs; it also strengthened project control across33 operating sites in seven States. Besides the Company continued to invest in capitalequipment making it possible to reduce the external hiring of equipment (and relatedrentals) enhance equipment availability rotate our equipment faster and completeprojects on schedule. Our discipline has been validated across the last number of yearsmaking us one of the fastest growing medium-sized road building companies in India. Wehave grown at a CAGR of 39% over the last three years with profit growth of 52%.

Our order book has grown 4x during the last four-year period. Our order book at theclose of 2018-19 provided a revenue visibility across 2-3 years. To defray the risks thatcould possibly arise from an excessive dependence on the road sector the Company extendedinto adjacent business spaces like aviation infrastructure and water supply projects.Through this validated discipline the Company expects to sustain its ongoing growthenhancing respect across our business eco-system and increasing value in the hands of allthose associated with our company.

Harendra Singh

Chairman and Managing Director

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