HG Infra Engineering witnessed a sharp 5% rise in its share price after securing a significant ₹716 crore order from Central Railway. This is part of a broader trend of strong performance for the company, as HG Infra has gained 83% year-to-date, reflecting growing investor confidence in its business trajectory.
Key details of the ₹716 crore railway order
According to the company's filing, the ₹716 crore order is related to the construction of a new broad gauge (BG) railway line between Dhule (Borvihir) and Nardana. The project spans approximately 49.45 km and falls under the Engineering & Procurement Contract (EPC) mode. This contract represents a significant addition to HG Infra's growing portfolio of infrastructure projects.
Investors looking to buy shares online might consider the ongoing growth trajectory of HG Infra, which is supported by these substantial project wins.
A series of major order wins
This is the second major order secured by HG Infra in the same week. Earlier, the company had been awarded a ₹781 crore contract by the Ministry of Road Transport and Highways (MoRTH) to upgrade a six-lane road in Gujarat. The company's momentum continued in August when it secured another order worth ₹883 crore for the upgradation of a six-lane road between Narol Junction and Sarkhej Junction in Gujarat under the Hybrid Annuity Mode (HAM).
HG Infra's success makes it an attractive choice for those looking to buy shares online, as these contracts highlight its strong position in India's infrastructure sector and potential for future growth.
Order book and financial performance
As of the June 2024 quarter, HG Infra's total order book stood at ₹15,642 crore. This order backlog, equivalent to three times its FY24 revenue, provides strong revenue visibility for the next 2-3 years. Approximately 91% of these orders come from government contracts, with the remaining 9% sourced from the private sector.
The strong order book highlights the company's ability to diversify its portfolio across various infrastructure projects, allowing for consistent growth. Investors keen to buy shares online may see this as a key factor in evaluating the company's long-term financial prospects.
Future growth potential and diversification
HG Infra is looking to expand beyond its core focus on road and railway projects by diversifying into sectors such as solar and water infrastructure. In March 2024, the company secured its first solar project worth ₹1,307 crore in Rajasthan in partnership with JDVVNL. The company holds a 65% stake in this project, marking a bold step toward diversifying its business into renewable energy solutions.
Additionally, HG Infra aims to increase its presence in the water infrastructure segment. Analysts expect the company to achieve an order inflow of ₹10,000–12,000 crore in FY25, with approximately ₹8,000 crore coming from highway projects, ₹2,000 crore from railway projects, and ₹1,000 crore from solar and water projects. The company expects 35-40% of its order book to be composed of non-road projects in the next 2-3 years.
The continuous expansion of its order book and diversification of its project portfolio further strengthen the company's market position. Those looking to buy shares online may see these developments as indicators of the company's future growth potential, especially as it aligns with global trends toward sustainable infrastructure.
Final words
HG Infra Engineering's recent success in securing major contracts, including the ₹716 crore Central Railway order, reflects the company's solid position in India's infrastructure development sector. Its robust order book, consistent financial performance, and diversification into new sectors like solar and water infrastructure make it a noteworthy player for investors.
As the company continues to grow and diversify its portfolio, those looking to buy shares online can track its performance closely, particularly with its strong future growth prospects driven by government and private sector projects alike.
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