Any current/future new fundraising through debt or equity?

The company expects a total equity infusion of Rs. 775 crore for the current year, with Rs. 425 crore to be infused in the remaining 9 months of FY ‘25 and the balance in FY ‘26 and FY ‘27 (Page 8). Equity requirement for 10 HAM projects totals Rs. 1,461 crore; Rs. 728 crore already infused as of June 2024 (Page 5). Debt position: consolidated gross debt is approximately Rs. 2,015 crore as of Q1 FY ‘25 with expectations that gross debt will remain around Rs. 500 crore to Rs. 600 crore replacing higher-interest mobilization advances with term loans at lower rates (Pages 14, 5, 8). CapEx guid

Any current/future capex/capital investment/strategic investment?

FY '25 CapEx guidance is approximately Rs. 75 crore, with Rs. 15 crore already spent in Q1. Equity investment for HAM projects remains at about 15% to 18% of project cost (including GST). For a solar park project (50 to 100 MW for C&I customers), capital commitment expected is around Rs. 40-50 crore. In solar, some projects involve investing Rs. 40-50 crore, with potential additions of Rs. 100 crore in the shorter term. Strategic focus on land aggregation and infrastructure development for solar parks to enable third-party installations. Monetization of five HAM projects is underway,

Future growth expectations in sales/revenue/volumes?

H.G. Infra aims for revenue growth of 17% to 18% in FY ‘25 (Page 6). Target order inflow for FY ‘25 is Rs. 11,000 to 12,000 crore (Page 6, 9). Execution expected at around Rs. 6,000 crore with margins of 15%-16% (Page 6). Solar segment expected to contribute 15%-20% of the order mix with margins around 11%-12% for EPC solar projects (Page 17). Highways to continue to dominate order inflows with about 60%-65% share, railways about 20%, and solar & water making up the rest (Page 14). Completion of solar Rs.1,700 crore order book expected by 1H FY ‘26; Rs. 900 crore revenue execution ex

Future growth expectations in earnings/operating earnings/profits/EPS?

H.G. Infra expects revenue growth of 17% to 18% in FY ‘25, driven by strong order inflow and execution. The company targets EBITDA margins of 15% to 16%, maintaining margin sustainability through strategic project selection. Solar EPC margins are expected around 12%-18%, with overall blended margins around 15%-16% considering roads, railways, and water projects. Equity IRR for solar projects is targeted at approximately 15%, with EPC margins near 18%. Order inflows are anticipated in the range of Rs. 11,000 to Rs. 12,000 crores for FY ‘25, with potential upside given an aggressive gove

Current/ Expected Orderbook/ Pending Orders?

As of June 30, 2024, H.G. Infra Engineering's order book stands at Rs. 15,642 crores, up 34% from Q1 FY24. Order book composition: Rs. 11,452 crores from roads and highways, Rs. 2,498 crores from railway and metro, Rs.1,691 crores from solar. Around 28% of the order book is HAM projects and 78% is EPC. The company has bid for approximately Rs. 8,000 crores of railway projects (EPC) and Rs. 9,000 crores of highway projects (mainly HAM). Expected order inflow for FY25 is Rs. 11,000 to Rs. 12,000 crores, with 60%-65% from highways (mostly HAM), about 20% from railways (EPC), plus some from water

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H.G. Infra Engineering LtdQ2 FY24Construction

H.G. Infra Engineering Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹564P/E: 10.2Market Cap: ₹3.9K CrSector: Construction

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→H.G. Infra aims for revenue growth of 17% to 18% in FY ‘25 (Page 6).
→Target order inflow for FY ‘25 is Rs. 11,000 to 12,000 crore (Page 6, 9).
→Execution expected at around Rs. 6,000 crore with margins of 15%-16% (Page 6).
→Solar segment expected to contribute 15%-20% of the order mix with margins around 11%-12% for EPC solar projects (Page 17).
→Highways to continue to dominate order inflows with about 60%-65% share, railways about 20%, and solar & water making up the rest (Page 14).
→Completion of solar Rs.1,700 crore order book expected by 1H FY ‘26; Rs. 900 crore revenue execution expected in FY ‘25 (Page 22).
→The company is optimistic about substantial opportunities post-election with increased infrastructure awarding (Page 3).

Margin guidance

Category 3

→H.G. Infra expects revenue growth of 17% to 18% in FY ‘25, driven by strong order inflow and execution.
→The company targets EBITDA margins of 15% to 16%, maintaining margin sustainability through strategic project selection.
→Solar EPC margins are expected around 12%-18%, with overall blended margins around 15%-16% considering roads, railways, and water projects.
→Equity IRR for solar projects is targeted at approximately 15%, with EPC margins near 18%.
→Order inflows are anticipated in the range of Rs. 11,000 to Rs. 12,000 crores for FY ‘25, with potential upside given an aggressive government ordering pipeline.
→Monetization of five HAM projects is planned by March next year, which may improve financial metrics.
→Execution for FY ‘25 is expected at about Rs. 6,000 crores, supporting earnings growth.
→Overall, H.G. Infra aims for steady expansion with focused diversification into solar, railways, and water projects while maintaining healthy margins.

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Fundraise plans

Yes

→The company expects a total equity infusion of Rs. 775 crore for the current year, with Rs. 425 crore to be infused in the remaining 9 months of FY ‘25 and the balance in FY ‘26 and FY ‘27 (Page 8).
→Equity requirement for 10 HAM projects totals Rs. 1,461 crore; Rs. 728 crore already infused as of June 2024 (Page 5).
→Debt position: consolidated gross debt is approximately Rs. 2,015 crore as of Q1 FY ‘25 with expectations that gross debt will remain around Rs. 500 crore to Rs. 600 crore replacing higher-interest mobilization advances with term loans at lower rates (Pages 14, 5, 8).
→CapEx guidance for FY ‘25 is Rs. 75 crore; Rs. 15 crore spent in Q1 FY ‘25 (Page 9).
→No explicit mention of any new equity or debt fundraising beyond planned equity infusion for projects and routine debt management.

Order book

Yes

→As of June 30, 2024, H.G. Infra Engineering's order book stands at Rs. 15,642 crores, up 34% from Q1 FY24.
→Order book composition: Rs. 11,452 crores from roads and highways, Rs. 2,498 crores from railway and metro, Rs.1,691 crores from solar.
→Around 28% of the order book is HAM projects and 78% is EPC.
→The company has bid for approximately Rs. 8,000 crores of railway projects (EPC) and Rs. 9,000 crores of highway projects (mainly HAM).
→Expected order inflow for FY25 is Rs. 11,000 to Rs. 12,000 crores, with 60%-65% from highways (mostly HAM), about 20% from railways (EPC), plus some from water and solar segments.
→Solar order book is around Rs. 1,691 crores; approx. Rs. 900 crores will be executed in FY25; entire solar order revenue expected by 1H FY26.
→Monetization discussions are active for 5 HAM projects; equity infusion and completion expected by FY25 to FY27.

Capex plans

Yes

→FY '25 CapEx guidance is approximately Rs. 75 crore, with Rs. 15 crore already spent in Q1.
→Equity investment for HAM projects remains at about 15% to 18% of project cost (including GST).
→For a solar park project (50 to 100 MW for C&I customers), capital commitment expected is around Rs. 40-50 crore.
→In solar, some projects involve investing Rs. 40-50 crore, with potential additions of Rs. 100 crore in the shorter term.
→Strategic focus on land aggregation and infrastructure development for solar parks to enable third-party installations.
→Monetization of five HAM projects is underway, with expressions of interest from funds, targeting completion and data sharing by October-November 2024.
→No plans for solar module manufacturing or aggressive expansion in international markets or hydrogen sector currently; plans are gradual.

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