H.G. Infra Engineering shares surge 5.5% following a ₹780 crore order boost

In Tuesday's stock market trading, H.G. Infra Engineering Ltd experienced a significant 5.5% rise in its share price, propelled by the announcement of a ₹780 crore order from the Ministry of Road Transport & Highways (MoRTH). This uptick illustrates a vivid example of how infrastructure developments can influence share market investment decisions, providing a timely opportunity for investors.

Robust order boosts share price

The share opened at ₹1526.40 on the Bombay Stock Exchange (BSE), climbing from a previous close of ₹1461.50. This initial 4% jump was followed by a further increase, with shares reaching an intraday high of ₹1542. This rally reflects the market's positive reception to the company's latest project win and highlights the potential returns of share market investment in infrastructure-focused companies.

Details of the new ₹780 crore project

H.G. Infra Engineering has secured a substantial project for upgrading a 6-lane road, including an elevated corridor from km 0/00 to km 10/170 on NH 47 in Gujarat, under a Hybrid Annuity Mode. With a project bid cost of ₹781.11 crore and a construction timeline of 2.5 years, this contract marks a significant milestone in the company's portfolio and offers a promising outlook for those interested in share market investment.

Why H.G. Infra Engineering is a top pick?

Axis Securities has highlighted H.G. Infra Engineering as their 'pick of the week,' setting a target price of ₹1645, which suggests potential gains of over 8%. This endorsement is supported by four key factors that are particularly relevant for investors considering share market investment:

1. Healthy order book: As of June 30, 2024, the company's order book was ₹15,642 crore—approximately three times its FY24 revenue.
2. Portfolio diversification: Beyond traditional road and railway projects, H.G. Infra has ventured into the solar energy sector, securing a ₹1,307 crore project in Rajasthan, signalling a broader scope for share market investment opportunities.
3. Strong order inflow expectations: The company expects significant order inflows totalling ₹10,000-12,000 crore in FY25, diversified across highways, railways, solar, and water projects.
4. Positive financial outlook: Axis Securities projects a robust growth in revenue, EBITDA, and net profit for H.G. Infra Engineering, estimating CAGRs of 16%, 14%, and 19%, respectively, from FY24 to FY26.

A strategic opportunity for share market investors

The substantial order win and the positive outlook provided by Axis Securities underscore H.G. Infra Engineering as a compelling choice for share market investment. The company's diversified project portfolio, coupled with its strong financial projections, make it a prime candidate for investors looking to capitalise on infrastructure growth. For those actively investing in the stock market, H.G. Infra Engineering offers both a dynamic growth story and an attractive valuation, making it a noteworthy addition to investment portfolios.