Highway Infrastructure Limited

Industrials — Infrastructure Operations · NSE

₹52.34−₹2.62 (−4.77%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Highway Infrastructure Limited, together with its subsidiaries, engages in tollway collection business in India. It operates in three segments: Toll Division; Work Contract Division and Machineries & Equipment Hire Division; and Real Estate Division.

IndustryInfrastructure Operations

SectorIndustrials

Employees137

Annual revenue₹608 Cr

How does it make money?

Turns over ₹608 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 137 employees supports ₹4.44 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.44 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ 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?Some evidence

ROCE of 19.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE15.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +34% while net margin moved +105% 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+34%

Margin effect+105%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

59/ 100

Average

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

Valuation

81/ 100

Cheap

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

14.1x

1.3Y Median

18.6x

16 monthly readings · mean 18.8x · range 8.9x–34.7x

Sector Median

30.0x

median of 2 sector peers

🟢Current valuation is approximately 24% below its 1.3y median of 18.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 53% below the peer median of 30.0x.

vs. its own history

Cheap

18.6x median over 16 months · -24%

vs. sector peers

Cheap

30.0x median of 2 peers · -53%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.6x

PEG

0.35

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 6.3% to 9.0% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 26.9% to 19.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 63% over 3 years, from ₹64 Cr to ₹104 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 182% against revenue up 34% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹74 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 6.3% to 9.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 24% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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?

Sales are being booked faster than collected
Receivables are up 182% against revenue up 34%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1Revenue growth stays above 8% a year✓ 10.1% CAGR
Latest reported year was 170.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 9.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹74 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 19.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹375 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.1x

Cheap

Cheap against the generic band

P/B Ratio

1.54x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹3.71

Profitable

Profitable on a per-share basis

ROE

14.0%

Moderate

Moderate capital efficiency

ROCE

19.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.45x

Low

Conservative leverage

Revenue Growth (YoY)

170.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-87.2%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹74 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

1.0%

Weak

Thin margins leave little room for error

Net Margin

3.2%

Average

Average bottom-line conversion

Current Ratio

2.09

Comfortable

Healthy short-term liquidity

52W Range Position

29%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

46.7 / 45.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

74.1

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹455 Cr	₹573 Cr	₹496 Cr	₹608 Cr	+10.1%
EBITDA	₹29 Cr	₹40 Cr	₹36 Cr	₹55 Cr	+24.2%
EBITDA Margin	6.3%	7.0%	7.3%	9.0%	—
PAT (Net Profit)	₹12 Cr	₹19 Cr	₹20 Cr	₹32 Cr	+39.9%
EPS	₹1.63	₹2.64	₹2.74	₹4.8	+43.2%
ROE	15.8%	20.4%	17.4%	14.0%	—
ROCE	26.9%	34.1%	27.5%	19.4%	—
Total Debt	₹64 Cr	₹70 Cr	₹72 Cr	₹104 Cr	+17.7%
Free Cash Flow	₹2 Cr	₹11 Cr	-₹7 Cr	-₹74 Cr	—

🟢 Revenue has grown at 10.1% a year over 3 years.

🟢 EBITDA has grown at 24.2% a year over 3 years.

🟢 EBITDA Margin has risen from 6.3% to 9.0% over 3 years (+2.7 pts).

🟢 PAT (Net Profit) has grown at 39.9% a year over 3 years.

🟢 EPS has grown at 43.2% a year over 3 years.

🔴 ROE has fallen from 15.8% to 14.0% over 3 years (-1.8 pts).

🔴 ROCE has fallen from 26.9% to 19.4% over 3 years (-7.5 pts).

🔴 Total Debt has grown at 17.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹74 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹377 Cr

Total Liabilities

₹149 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

-₹66 Cr

Capex

-₹8 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.2%

Peer Comparison

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

Recent News

1 positive3 mixed2 general

Compare with

Equitymaster, 16 Oct

Highway Infrastructure Approves Preferential Issue, 51% Stake Acquisition in Indore Highway

Whalesbook, 14 OctM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Highway Infrastructure Signs ₹24.46 Crore NHAI Contract; Shares Rise 0.44%

HDFC Sky, 09 OctPrice 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.

Highway Infrastructure shares jump 9% after Rs 245 crore toll operations win from UP authority, NHAI

The Economic Times, 01 OctPrice 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.

Highway Infrastructure Ltd is Rated Sell

MarketsMojo, 15 Oct

Markolines Pavement Technologies Ltd: Strong Order Book, Growing Profitability and Future Opportunities in Highway Infrastructure

https://www.indiagazette.com/, 13 OctOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑