HG Infra Shares Soar 5% on New Order Win Worth ₹763 Crore

HG Infra Engineering has taken the spotlight in the financial markets, with its shares surging over 5% to ₹1,532 in morning trade on December 11, 2024. The rally follows the company’s announcement of securing a significant ₹763 crore order from the Ministry of Road Transport and Highways (MoRTH) for a transformative infrastructure project in Uttar Pradesh. This development further solidifies HG Infra’s position as a leading player in the infrastructure sector.

HG Infra Shares Soar 5% on New Order

What led to HG Infra’s recent stock market rally? The announcement of a letter of acceptance from MoRTH for upgrading the NH-227B stretch between Bahuvan Madar Majha and Jagarnathpur, widely recognized as the 84 Kosi Parikrama Marg, has been a game-changer. This project, awarded under the hybrid annuity mode (HAM), involves developing 63.84 kilometers into two lanes with paved shoulders.

Details of the ₹763 Crore Project

The project, valued at ₹763.11 crore, is a vital component of the region’s infrastructure development. While MoRTH estimated the project at ₹898.5 crore, HG Infra’s competitive bid secured the deal. Construction is expected to be completed within two years, making it a highly anticipated initiative for both investors and stakeholders.

What is the Hybrid Annuity Mode (HAM)?

The hybrid annuity model, or HAM, is a public-private partnership framework designed to reduce financial risk for private players. In this model, the government and private companies share project costs, making it attractive for infrastructure giants like HG Infra.

Why is the 84 Kosi Parikrama Marg Significant?

This highway stretch holds both cultural and logistical importance. Connecting prominent pilgrimage sites, the road upgrade will enhance connectivity and boost regional economic activity.

HG Infra's Recent Milestones

This is HG Infra’s second major order in less than a month. On November 25, 2024, the company received a ₹1,110 crore contract from NTPC Vidyut Vyapar Nigam to procure and install 500 MW/1000 MWh standalone battery energy storage systems (BESS) across India.

Breaking Down the NTPC Order

• Contract Value: ₹1,110 crore
• Scope: Battery energy storage systems
• Impact: Strengthens HG Infra’s foothold in the renewable energy sector

Performance Metrics for Q2 FY25

Despite a revenue dip, HG Infra demonstrated resilience in its operating performance:

How Did the Market Respond?

At 9:20 am on December 11, 2024, HG Infra’s shares were trading at ₹1,514, up 4.1% from the previous close on the NSE. This marks an impressive 72% growth since the beginning of the year, reflecting robust investor confidence.

What Sets HG Infra Apart?

Innovative Bidding Strategies

HG Infra’s ability to submit competitive bids while maintaining profitability is a key factor behind its success.

Diverse Project Portfolio

From highways to renewable energy systems, HG Infra is diversifying its expertise across multiple domains.

FAQs

1. Why did HG Infra shares rally by 5%?

The surge was fueled by a new ₹763 crore order win from MoRTH for upgrading the NH-227B stretch.

2. What is the scope of the ₹763 crore project?

The project involves developing a 63.84-km stretch into two lanes with paved shoulders under the hybrid annuity mode.

3. How does the hybrid annuity model benefit HG Infra?

HAM reduces financial risks by sharing costs between the government and private companies, ensuring profitability.

4. What other major projects has HG Infra secured recently?

HG Infra won a ₹1,110 crore contract from NTPC for installing battery energy storage systems across India.

5. How did HG Infra perform in Q2 FY25?

While net profit declined by 16% YoY, the EBITDA margin improved to 24.3%, showcasing operational resilience.

6. Is HG Infra a good investment option?

With its robust order book, innovative strategies, and diversified portfolio, HG Infra remains a promising player in the infrastructure sector.

Conclusion

The rally in HG Infra shares highlights the company’s growing stature in India’s infrastructure landscape. With significant project wins, a resilient financial performance, and an ever-expanding portfolio, HG Infra is well-positioned for sustained growth. Investors and stakeholders will undoubtedly keep a close eye on the company’s next moves.