HG Infra reported a weak quarter, with revenue shrinking 47 per cent year on year to \u20b9900 crore on account of delays in appointed dates, supply chain issues and project specific hurdles. EBITDA declined 67 per cent to \u20b977 crore, as margins shrank 530 bps to 8.5 per cent. Adj. loss stood at \u20b91.8 crore vs APAT of \u20b9130 crore. It has booked a one-off profit of \u20b930.1 crore on account of sale of three HAM assets.<\/p>\n
The company\u2019s order-book stands at \u20b914,500 crore vs \u20b914,700 crore year on year, driven by strong inflows from the highway sector during the quarter. However, executable order-book stands at just \u20b98,000 crore, owing to land acquisition delays and project level hurdles, according to the management. On a positive side, it has won new orders worth \u20b95,300 crore in Q1. The widening gap between order-book and execution remains a key monitorable on account of delays in several projects.<\/p>\n
The management has trimmed its FY27 guidance of revenues to \u20b96,000-6,500 crore, from earlier \u20b97,000 crore, citing slower execution ramp-up while maintaining margin guidance at 13.5-14 per cent and order inflow guidance firm at \u20b911,000-12,000 crore. However, we are baking in a slower pace of execution than the guidance implies, basis execution risk on the back of a smaller executable order-book. We maintain Hold with an SoTP-based revised TP of \u20b9535 (earlier \u20b9610).<\/p>\n
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