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Infra Results: Healthy performance; ordering to kick in

ICICIdirect Research 09 Aug 2024 DISCLAIMER
  • Infra EPC companies in our coverage reported a strong performance in Q1FY25. While NCC saw 23% growth in topline, HG Infra saw 18% YoY topline growth. Margins were largely stable for the companies at 9.3% and 16%, respectively.
  • Both these companies have guided for strong topline guidance of 15% and 18-20%, respectively in FY25. While NCC alluded to ₹ 2 lakh crore of bid potential, NHAI ordering is also likely to kick in with government aiming to award ₹ 3 lakh crore of road orders in FY25, which will boost road players like HG Infra
  • Furthermore, rate cut in H2FY25 will also boost overall EPC players bringing down their interest costs. We have a BUY on both NCC and HG infra for a target price of ₹ 400 and ₹ 1885, respectively
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