HG Infra Engineering shares drop 8% following profit decline

Shares of HG Infra Engineering dropped 8% to ₹1,180 in early morning trade on November 12. This decline came after the company reported a 16% year-on-year fall in its net profit, which stood at ₹80.7 crore, compared to ₹96.1 crore in the same period last year.

For those looking to invest in stocks, HG Infra's recent financial performance highlights potential concerns for investors.

Key financial highlights

HG Infra Engineering's financial results for the recent quarter show a mix of challenges, with a significant drop in profits and a slight dip in operational earnings. Here are the key figures:

1. Net profit down by 16%: HG Infra’s net profit has dropped to ₹80.7 crore from ₹96.1 crore a year earlier.
2. Revenue decline: Revenue from operations fell by 5.5% to ₹902.4 crore from ₹954.5 crore in the previous year.
3. Slight EBITDA dip: Earnings before interest, tax, depreciation, and amortisation (EBITDA) decreased by 0.3% to ₹219.5 crore, compared to ₹220.1 crore in Q2 FY24.
4. EBITDA margin improvement: Despite the dip in EBITDA, the margin improved to 24.3% from 23% a year ago.

Notable developments

In August, HG Infra secured the lowest bid for a road upgrade project in Gujarat. The ₹781.11 crore bid, which was lower than the estimated cost of ₹883.24 crore, involves upgrading a 10.63-km stretch along National Highway 47. The project, to be developed under the hybrid annuity model, is expected to be completed in about 2.5 years.

Company profile

HG Infra Engineering, headquartered in Rajasthan, offers a range of infrastructure services. These include highway and road construction, bridges, civil projects, land development, and water pipeline installations.

Stock performance

By 10:20 AM, HG Infra's shares were trading at ₹1,195, marking a 7% drop from the previous close on the NSE. The company’s stock has faced significant losses recently, slipping 26% over the past three months.

Key takeaways

1. HG Infra’s net profit and revenue have both declined year-on-year.
2. EBITDA showed a slight dip, but margins improved.
3. The company recently secured a significant road upgrade project in Gujarat.
4. HG Infra shares have struggled recently, with a 26% drop over the last three months.

For investors looking to invest in stocks, HG Infra Engineering's performance suggests caution, especially given recent declines in its stock price.