Rs 9,626.3 crore order book: This multibagger civil construction company enters into solar energy and green hydrogen energy; details inside
The stock gave multibagger returns of 343 per cent in 3 years whereas BSE Sensex Index is up by 54 per cent.
H.G. Infra Engineering Limited addressed the Bombay Stock Exchange and the National Stock Exchange, informing them of the incorporation of three new subsidiaries, as per compliance with Regulations 30 and 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The subsidiaries established are H.G. Jodhpur Solar Energy Private Limited, H.G. Solar Project Developer Private Limited, and H.G. Green Hydrogen Power Private Limited, all of which are wholly owned by H.G. Solar Projects Private Limited, itself a fully owned subsidiary of H.G. Infra Engineering Limited.
Each of these new entities has been set up with an authorized, subscribed, and paid-up share capital of Rs. 15,00,000, distributed across 150,000 equity shares valued at Rs. 10 each. These companies are at the initiation stage and have yet to begin business operations, which is why there is no reported turnover for any of them. The formation of these subsidiaries may be regarded as related party transactions, involving investments in step-down subsidiaries. Directors Harshvardhan Singh and Vaibhav Choudhary, who are part of the promoter and promoter group of H.G. Infra Engineering, are also directors in these new entities. The document assures that the shares have been subscribed at par and the transactions have been conducted at arm's length.
The subsidiaries are focused on the solar power industry and green hydrogen energy, aligning with the parent company's interest in renewable energy sectors. The communication does not specify any governmental or regulatory approvals needed for these incorporations, suggesting no such requirements at this stage. Additionally, the acquisitions have been completed with cash consideration for the shares.
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H.G. Infra Engineering Limited (HGIEL) is an Indian road infrastructure company engaged in the business of engineering, procurement and construction (EPC) services, maintenance of roads, bridges, flyovers and other infrastructure contract works. The company has a market cap of over Rs 5,000 crore and reported amazing numbers in its Quarterly Results & annual results.
Order Book: The company’s order book stands at Rs 9,626.3 crore as of December 31, 2023. The orders are bagged from various clients across India, including NHAI, Adani, DMRC, RVNL and NCR. With the above orders, the company’s order book crosses over Rs 10,000 crore.
The net sales increased by 62.6 per cent to Rs 1,365 crore and the net profit increased by 6.3 per cent to Rs 493.19 crore in Q3FY24 compared to Q3FY23. In its annual results, the net sales increased by 23.21 per cent to Rs 4,622.01 crore and the net profit increased by 29.77 per cent to Rs 493.19 crore in FY23 compared to FY22.
As of December 2023, Abakkus Emerging Opportunities Fund – 1 (owned by a renowned ace investor, Sunil Singhania) owns a 1.47 per cent stake in the company. As of December 2023, FIIs have decreased their stake to 1.56 per cent and DIIs have decreased their stake to 12.45 per cent compared to September 2023.
The stock has a PE of 11.6x, an ROE of 29.4 per cent and an ROCE of 25.4 per cent. The stock gave multibagger returns of 343 per cent in 3 years whereas BSE Sensex Index is up by 54 per cent. Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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