Broking firm Anand Rathi has a buy call on the stock of HG Infra for potential gains of 75% from the current market price. The stock was trading at Rs 511 and Anand Rathi has set a target price of Rs 896 on the stock.
|Current Market Price||Target Price||Gains Likely|
|Rs 511||Rs 896||75%|
The 52-week high share price of HG Infra was Rs 830.00 and 52-week low price remained at Rs 357.55.
1. Reasons for buying the stock
Anand Rathi, a leading brokerage firm, has specified reason for investment in the stock in its report. The reports states that a slew of orders set to be appointed soon and considerable additions aimed at in the next financial year FY23 led by the mostly closed Ganga Expressway. An encouraging FY22 is projected to by followed by good FY23, added the report. The balancesheet of HG Infra indicates that it will scale new highs. Other factors such as comforting average, continuing healthy execution, and encouraging valuation are some of the positive factors mentioned in the report about HG Infra.
2. Good Cash Flow
The cash flow of HG Infra is more than suffice. The Q4 FY 2022 addition of approximately Rs 8.4 billion and change-in-scope/utility-shifting works balanced Q4 revenue. With notice period issued, the Letter of Authorization for the Rs 40 bn Ganga Expressway project from Adani is expected soon. Approximately Rs 50 to Rs 60 bn additional fund is targeted for FY23.
Anand Rathi has said that with all the recent orders of HG Infra likely to appointed soon and on raised inflow guidance to approximately Rs 90 bn -Rs 100 bn from Rs 60 bn- Rs 65 bn. The revenue for the FY23 is pegged at Rs 50bn. The margin guidance has been pruned to 15.5 to 16% amid inflation and mix change. The capital expenditure guidance was enhanced to Rs 1.1 bn to Rs 1.2 bn on increased inflows and revenue guidance.
Amid the combination of increased inflow guidance because of progress with Ganga Expressway order and pruned margin guidance, the earnings for FY23 have been surged to approximately 8% and FY 24 earnings are expected to remain 19% higher. However, there is a risk of delayed appointed dates.