Shares of HG Infra Engineering surged 6.5% to hit an intraday high of ₹1,363 on 25th November, following the announcement of a significant contract win from NTPC Vidyut Vyapar Nigam Ltd. This development has sparked investor interest, pushing the stock higher amidst mixed quarterly financials.
HG Infra secures ₹1,110 crore contract from NTPC Vidyut
HG Infra Engineering received a Letter of Award (LoA) from NTPC Vidyut Vyapar Nigam Ltd for the procurement and installation of standalone battery energy storage systems (BESS) across India. The contract is valued at ₹1,110 crore and includes a total capacity of 500 MW/1000 MWh. HG Infra will oversee the development of 185 MW/370 MWh at a tariff rate of ₹2,38,000 per MW/month, with viability gap funding aiding the project’s feasibility.
This project underscores HG Infra's strategic shift towards sustainable infrastructure, aligning with India’s growing focus on renewable energy.
Share market performance and year-to-date gains
At 10:50 AM, shares of HG Infra were trading 5% higher at ₹1,338, reflecting strong market sentiment. Year-to-date, the stock has delivered a robust 23% return, outperforming the Nifty 50 index, which has gained 12% in the same period.
Despite these gains, the stock has faced challenges, recording negative monthly returns since June. Investors in share market investment may see this contract win as a potential catalyst for a turnaround in the company’s performance.
Q2FY25 results: A mixed bag
HG Infra reported a 16% year-on-year decline in net profit for Q2FY25, falling to ₹80.7 crore from ₹96.1 crore in the same quarter last year. Revenue from operations also dipped by 5.5% to ₹902.4 crore compared to ₹954.5 crore in Q2FY24.
However, the company's EBITDA showed resilience, with only a marginal decline of 0.3% to ₹219.5 crore. The EBITDA margin improved to 24.3% from 23% in the previous year, highlighting improved operational efficiency.
Implications for share market investment
This ₹1,110 crore contract is expected to bolster HG Infra's order book and could positively influence future revenue and profit margins. The strategic focus on renewable energy projects positions the company well in the evolving infrastructure sector, offering potential opportunities for long-term investors considering share market investment.
Outlook for HG Infra
With the NTPC Vidyut project marking a significant milestone, HG Infra is poised to strengthen its position in the infrastructure and renewable energy space. While recent financials reflect short-term challenges, this contract win could provide the momentum needed for sustained growth, making it an appealing consideration for investors focused on share market investment opportunities.
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