- 09 Nov 2021
- ICICIdirect Research
HG Infra continues to report robust performanceHGINFRA - 771 Change: 20.70 (2.76 %)
News: HG Infra posted a strong set of numbers during Q2FY22 with standalone revenue improving 60.4% YoY to Rs. 749.6 crore, largely driven by its strong order book position, pick-up in execution post second-wave disruptions, and receipt of appointed date in most of its projects. EBITDA margin remains at an elevated level of 16.3% (down 21 bps). Margin beat is likely backed by better project mix and lower contribution by sub-contracting projects. Effectively, EBITDA at Rs.121.8 crore, was up 58.3% YoY. At net level, robust operating performance translated into 113.8% YoY growth in PAT (to Rs.69.8 crore).
Views: We have a positive outlook on HG Infra mainly on account of a) its comfortable order book position, b) better revenue visibility, c) healthy operating margin of 16%+, d) comfortable balance sheet position, e) controlled working capital cycle (driven by apt mix of private/government projects coupled with efficient project management) and f) healthy return ratios.