HG Infra Engineering: Why is Emkay Global bullish on this stock?
HG Infra Engineering is at a price level which is close to the 52-week low of Rs 928.55. It's 52-week high is Rs 1,665.20 and Emkay Global, a domestic financial services company, has projected that the scrip could reach a price level significantly above the 52-week high in the next one year.
Kolkata: Jaipur-based HG Infra Engineering specialises in the construction of roads, highways, railways and renewable energy projects. It offers EPC (engineering, procurement, construction) services and has a pan-Indian presence. Before midday, HG Infra Engineering was trading at Rs 974.40, down 1.40 (or 0.14%). Emkay Global has projected that the infrastructure stock can reach Rs 1,900 mark in a year.
Just before midday on August 19, HG Infra Engineering was trading at Rs 974.80, down Re −1.00 (or 0.10%). The stock is likely to reach the Rs 1,900 mark (target price) in a year, thinks Emkay Global. This represents a nearly 95% upside compared to the price mentioned above and far higher than the 52-week high. The stock has jumped The stock has 404% in the past five years.
High volatility
The HG Infra Engineering stock has a beta of 1.3 which signal high volatility. It also has a Relative Strength Index, or RSI, of 33.3. Incidentally, if RSI is lower than 30, it signals that the stock is in an oversold position (which also could warrant a potential Buy signal). So it is neither in the oversold or overbought position.
Order book position
The guidance issued by the company has indicated an order book position for the current financial year at Rs 11,000 crore. Three-fourths of these are from railways and roadways. The rest are from other sectors. This year (FY26), the company could monetise five HAM or hybrid annuity model projects. These are a category of PPP model (mostly n the road sector), where the government provides funding less than 50%, while the bigger amount is poured in by the private sector partner.
"We keep our TP unchanged at Rs 1,900; retain BUY, given the incremental wins, steady execution progress, and the potential HAM monetization being key near-term triggers," said Emkay Global.
Q1 FY26 financial results
Significantly, Emkay Global did not change its opinion even after a less than flattering Q1 FY26 financial performance. It registered a 39% drop in net profit for the April-June period. PAT was Rs 162.5 crore in Q1FY25 but it dipped to Rs 98.8 crore in Q1FY26. Revenue, however, fell by a far lower extent -- by 3%. It reached Rs 1,482 crore in Q1FY26 compared to Rs 1,528 crore in Q1FY25. Operating profit (EBITDA) dipped 17.5% to touch Rs 260 crore in Q1FY26 compared to Rs 315.7 in the corresponding period last year.
For the current financial year, HG Infra Engineering management has given a revenue guidance of Rs 7,000 crore with an EBITDA margin of 15-16% in FY26.
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