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H.G. Infra Engineering Ltd.

BSE: 541019 Sector: Infrastructure
NSE: HGINFRA ISIN Code: INE926X01010
BSE 00:00 | 28 Jan 266.25 -11.50
(-4.14%)
OPEN

275.30

HIGH

275.30

LOW

265.00

NSE 00:00 | 28 Jan 266.95 -11.00
(-3.96%)
OPEN

274.95

HIGH

277.75

LOW

265.00

OPEN 275.30
PREVIOUS CLOSE 277.75
VOLUME 6059
52-Week high 307.00
52-Week low 172.70
P/E 11.97
Mkt Cap.(Rs cr) 1,735
Buy Price 260.00
Buy Qty 151.00
Sell Price 273.00
Sell Qty 1.00
OPEN 275.30
CLOSE 277.75
VOLUME 6059
52-Week high 307.00
52-Week low 172.70
P/E 11.97
Mkt Cap.(Rs cr) 1,735
Buy Price 260.00
Buy Qty 151.00
Sell Price 273.00
Sell Qty 1.00

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 of ourinitial public offerwe had indicated an annual revenue growth of 30% which we later revised upward. I ampleased to report that we achieved our guidance with H2010 crore revenue a 44% growth in2018-19. The Company reported profitable growth for the year with percentage growth inbottom-line of 47% being higher than the percentage increase in our topline. This wasachieved through our established culture of operational discipline our competitiveness inan exciting segment and our desire to grow into one of the most successful companies inIndia’s infrastructure sector. At HG Infra we are attractively placed to carve outlarger projects. In the last five years we strengthened our project qualificationeligibility from H1120 crore to H1750 crore (as on March 31 2019). Besides our networth strengthened from H541 crore to H659 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 receivedH3891 crore orders during the year at its desired IRR strengthening its overall orderbook from H4607 crore as on March 31 2018 to H6222 crore as on March 31 2019. We endedthe financial year under review with the integrity of our Balance Sheet intact ourreceivables cycle virtually unchanged and our gearing at 0.57 (compared with 0.75 in theprevious 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 thestrength of our governance process. At our company the word ‘governance’carries an over-riding connotation: the position and respect to be completely trusted byall stakeholders at all times. I am pleased to communicate that the Company deepened itsgovernance commitment during the course of the year under review. This commitment was mostvisible in the strengthening of the Board of Directors and people competencies. TheCompany strengthened its Board through the appointment of a retired member of IndianAdministrative Service. The execution team was also strengthened over the last few yearswith professionals joining across teams and functions including a new COO. Besides theCompany added over 670 employees through the year connecting order book throughput at onelevel with an enhanced ground-level ability to deliver at the other. We believe that byplugging the various managerial and competence gaps we are creating a well-roundedorganization that is more attractively placed today to capitalize on sectoralopportunities than ever. We reinforced our commitment to deliver projects on schedulethrough a sustained investment in cutting-edge technologies and equipment. The Companyinvested proactively in SAP the benefits of which were reflected during the lastfinancial year. The SAP investment did not just help moderate costs; it also strengthenedproject control across 33 operating sites in seven States. Besides the Company continuedto invest in capital equipment making it possible to reduce the external hiring ofequipment (and related rentals) enhance equipment availability rotate our equipmentfaster and complete projects on schedule. Our discipline has been validated across thelast number of years making us one of the fastest growing medium-sized road buildingcompanies in India. We have grown at a CAGR of 39% over the last three years with profitgrowth of 52%. Our order book has grown 4x during the last four-year period. Our orderbook at the close of 2018-19 provided a revenue visibility across 2-3 years. To defray therisks that could possibly arise from an excessive dependence on the road sector theCompany extended into adjacent business spaces like aviation infrastructure and watersupply projects. Through this validated discipline the Company expects to sustain itsongoing growth enhancing respect across our business eco-system and increasing value inthe hands of all those associated with our company.

Harendra Singh

Chairman and Managing Director