Shares of HG Infra Engineering surged as much as 6.86% to reach an intraday high of ₹1,363.70 on Monday, November 25, 2024. The rally comes after the construction and engineering company announced a significant project win, boosting investor confidence.
New project secured
The sharp rise in HG Infra’s share price followed the company’s announcement of a Letter of Award (LoA) from NTPC Vidyut Vyapar Nigam Limited (NVVN).
In an official exchange filing, HG Infra Engineering stated:
“We are pleased to inform you that H.G. Infra Engineering Limited (the ‘Company’ or ‘HGINFRA’) has received the Letter of Award from the NTPC Vidyut Vyapar Nigam Limited.”
The contract entails the setup of 500 MW/1000 MWh standalone battery energy storage systems (BESS) across India. The initiative will be supported by viability gap funding, a mechanism aimed at making projects financially feasible through government support.
Key project details
- Size of the Order: The first phase of the project covers 185 MW/370 MWh.
- Tariff Rate: The tariff has been set at ₹2,38,000 per MW per month.
- Timeline: The project is expected to be completed within 1.5 years.
This project marks a significant milestone for HG Infra as it diversifies into renewable and energy storage solutions, a growing sector with immense future potential.
Financial Performance
The company’s strong fundamentals have also contributed to the optimism around its stock:
Q1 FY25 Highlights
- Revenue Growth: HG Infra reported a 13% year-on-year (YoY) increase in revenue, reaching ₹1,528 crore, compared to ₹1,351 crore in Q1 FY24.
- Net Profit: The company’s net profit grew by over 8% YoY, standing at ₹162.6 crore for the June quarter of FY25, up from ₹150.4 crore in the same period last year.
This consistent financial performance reflects the company’s ability to execute large-scale projects efficiently while maintaining profitability.
Market metrics
HG Infra Engineering’s market capitalisation currently stands at ₹8,709.47 crore, placing it in the SmallCap category on the Bombay Stock Exchange (BSE).
Share Performance
- 52-Week High: ₹1,880
- 52-Week Low: ₹806
As of 9:34 AM, the company’s shares were trading 4.72% higher at ₹1,336.40 on the BSE, while the BSE Sensex was up 1.61%, trading at 80,387.21 levels.
Industry outlook
HG Infra’s entry into battery energy storage solutions aligns with the government’s focus on renewable energy and grid stability. The project not only reinforces its presence in the infrastructure domain but also marks a strategic pivot towards sustainable energy solutions.
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Battery energy storage systems are becoming a crucial part of the renewable energy ecosystem, providing grid stability and ensuring a reliable energy supply. By securing this project, HG Infra positions itself as a key player in India’s clean energy transition.
Share price trends
HG Infra Engineering’s stock has shown resilience and growth over the past year, driven by robust project execution and a healthy order book. Investors have been particularly bullish on companies involved in infrastructure and energy, sectors that are seeing substantial government investment.
Future prospects
The successful execution of this project is likely to enhance HG Infra’s reputation in the energy infrastructure sector, opening doors to further opportunities in renewable and storage solutions. Additionally, the company’s consistent financial performance provides a solid foundation for future growth.
With a diversified portfolio and a focus on innovation, HG Infra is poised to capitalise on India’s infrastructure development and renewable energy ambitions.
Conclusion
The latest contract win from NVVN has sparked a wave of optimism among investors, reflected in HG Infra’s share price surge. Coupled with its robust financial health and strategic expansion into battery energy storage, the company remains a promising contender in the infrastructure and energy sectors.
