H.G. Infra Engineering Limited

Industrials — Engineering & Construction · NSE

₹407.80−₹0.15 (−0.04%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:48 pm

Understanding the Business

Company site ↗

The 60-second version of H.G. Infra Engineering Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

H.G. Infra Engineering Limited, together with its subsidiaries, engages in the provision of engineering, procurement, and construction (EPC) services in India. It operates through two segments, Construction and Renewable segments.

IndustryEngineering & Construction

SectorIndustrials

Employees5,077

Annual revenue₹4,943 Cr

How does it make money?

Turns over ₹4,943 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 5,077 employees supports ₹97.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹97.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 13.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.1%

What is the outlook?

10 analysts covering the stock expect revenue to grow about 14.3% and earnings to grow about 26.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.3%

Est. earnings growth+26.9%

Analysts10

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +11% while net margin moved -39% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+11%

Margin effect-39%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 1.53x is high — earnings must service borrowings before shareholders see anything
• Current ratio of 1.16 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 2.1x — little room if profits dip
✗ Debt has grown 38.1% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

38/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

80/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

14.3x

3Y Median

12.0x

40 monthly readings · mean 12.4x · range 5.6x–23.3x

Sector Median

30.1x

median of 3 sector peers

⚠️Current valuation is approximately 19% above its 3y median of 12.0x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 53% below the peer median of 30.1x.

vs. its own history

Fair

12.0x median over 40 months · +19%

vs. sector peers

Cheap

30.1x median of 3 peers · -53%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 25.7% to 10.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 22.6% to 13.6% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 163% over 3 years, from ₹1,910 Cr to ₹5,029 Cr.
🔴High leverageFinancial
Debt/Equity of 1.53x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 3.9x to 2.1x.
🟡Profit is decliningFinancial
Net profit is down 33% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 59% against revenue up 11% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 53% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 5.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 3.4% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 25.7% to 10.1%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 18%✓ 20.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹704 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.1x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 3.4% CAGR
Latest reported year was -25.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

4 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 4 neutral · 4 weak

Market Cap

₹2,658 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.3x

Cheap

Cheap against the generic band

P/B Ratio

0.81x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹28.55

Profitable

Profitable on a per-share basis

ROE

10.1%

Moderate

Moderate capital efficiency

ROCE

13.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.53x

High

High leverage

Revenue Growth (YoY)

-25.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

-34.6%

Falling

Profits are shrinking

Dividend Yield

0.49%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹704 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

6.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

23.5%

Good

Healthy core-business profitability

Net Margin

3.8%

Average

Average bottom-line conversion

Current Ratio

1.16

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.47

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

426.0 / 472.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,466 Cr	₹5,125 Cr	₹4,801 Cr	₹4,943 Cr	+3.4%
EBITDA	₹881 Cr	₹1,073 Cr	₹1,050 Cr	₹1,008 Cr	+4.6%
EBITDA Margin	19.7%	20.9%	21.9%	20.4%	—
PAT (Net Profit)	₹493 Cr	₹539 Cr	₹505 Cr	₹330 Cr	-12.5%
EPS	₹75.68	₹82.64	₹77.56	₹50.69	-12.5%
ROE	25.7%	21.9%	17.1%	10.1%	—
ROCE	22.6%	25.0%	14.4%	13.6%	—
Total Debt	₹1,910 Cr	₹1,513 Cr	₹4,170 Cr	₹5,029 Cr	+38.1%
Free Cash Flow	-₹478 Cr	-₹544 Cr	-₹2,438 Cr	-₹704 Cr	—

🟢 Revenue has grown at 3.4% a year over 3 years.

🟢 EBITDA has grown at 4.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 20.4% over 3 years.

🔴 PAT (Net Profit) has shrunk at 12.5% a year over 3 years.

🔴 EPS has shrunk at 12.5% a year over 3 years.

🔴 ROE has fallen from 25.7% to 10.1% over 3 years (-15.5 pts).

🔴 ROCE has fallen from 22.6% to 13.6% over 3 years (-9.1 pts).

🔴 Total Debt has grown at 38.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10,901 Cr

Total Liabilities

₹7,620 Cr

Cash & Equivalents

₹95 Cr

Operating Cash Flow

₹250 Cr

Capex

-₹954 Cr

Shareholding (proxy)

Institutional Holding

10.3%

Insider Holding

71.8%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

12 Aug 2026

Analyst Consensus

Recommendations

8 Buy · 3 Hold · 0 Sell

Target Price (Mean)

₹751.64

+84.3% vs CMP

Target Range

₹535 – ₹1,300

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

2 mixed4 general

HG Infra Engineering Submits Business Responsibility and Sustainability Report for FY 2025-26

scanx.trade, 18 Oct

H.G. Infra Engineering Ltd. 52 Week Low Streak Analysis

Univest, 13 Oct

H.G. Infra Engineering Limited (HGINFRA.NS) stock price, news, quote and history

Yahoo Finance UK, 01 Oct

HG Infra Engineering shares in focus on project win of Rs 241 crore

Moneycontrol.com, 12 Aug

HG Infra Engineering shares jump over 8% after receiving LoI from REC

The Economic Times, 19 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

H.G. Infra Engineering shares gain 14% on receiving completion certificate for ₹1,393 order from NHAI

Upstox, 24 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Revenue growth is negative (-25.7%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Risk

WeakFinancial Health · Growth · Profitability

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑