This article first appeared on GuruFocus .
Release Date: November 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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H.G. Infra Engineering Ltd ( NSE:HGINFRA ) maintains a robust order book of Rs 13,685 crore, providing strong revenue visibility across roads, rails, and renewables.
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The company has successfully monetized five HAM assets, receiving Rs 857.46 crore to date, with the remaining consideration expected to significantly reduce debt.
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H.G. Infra Engineering Ltd ( NSE:HGINFRA ) is strategically diversifying into high-growth segments like power transmission, battery energy storage systems (BESS), and metro projects.
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Management projects a strong revenue recovery in the second half of FY27, targeting Rs 4,200 crore, driven by the commencement of large projects like Pune-Silrul.
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The company is targeting a significant reduction in gross debt from Rs 1,595 crore to Rs 900 crore by the end of FY27, aided by asset monetization proceeds.
Negative Points
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H.G. Infra Engineering Ltd ( NSE:HGINFRA ) reported a sharp decline in H1 FY27 consolidated PAT to Rs 35 crore from Rs 151 crore in the previous year, with margins falling to 1.7%.
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Execution of several key projects, including Pune-Silrul and the Capital Region Ring Road, is delayed due to pending appointed dates, impacting near-term revenue.
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The company faces persistent land acquisition and utility shifting challenges across multiple projects, including the Thane Metro and various railway projects.
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Management does not expect EBITDA margins to recover to the 15%+ level seen in previous years within the next one to two years due to commodity price pressures and intense competition.
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A significant amount of capital is stuck in contract assets, particularly in railway projects, leading to high working capital requirements and increased finance costs.
Q & A Highlights
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Q: With H1 FY27 revenue at only about Rs 1,790 crore, how confident are you of delivering roughly Rs 4,200 crore in H2, and what is the segment-wise revenue breakup? A: Management (Chairman and Managing Director) said mobilization is already done on the large projects awaiting appointed dates, including Pune-Silrul and the Capital Region Ring Road, and expects appointed dates by end-November or early December. For H2, they guided to about Rs 350 crore from BESS, Rs 300 crore from transmission, roughly Rs 1,400 crore from rail and metro, about Rs 700 crore from the Jharkhand and Package 13 HAM projects, about Rs 600 crore from other HAM projects, about Rs 600 crore from Pune-Silrul and about Rs 200 crore from EPC and balance HAM work, totaling roughly Rs 4,200 crore.
Q: What is the revenue and margin guidance for FY27 and FY28, given the weak H1 margins? A: The Chairman and Managing Director said FY27 revenue is expected at roughly Rs 6,000 crore, with EBITDA margins of 13% to 14% in Q3 and Q4 after the 11% seen in H1, which was dragged down by losses on a few projects. For FY28, they are hopeful of about Rs 7,000 crore in revenue, though they cautioned that margins returning to 15% or above is unlikely in the next one to two years given commodity prices and intense competition across infrastructure.
Q: What is the status of the Rs 13,685 crore order book, and what is the order inflow outlook for FY27 and FY28? A: The Chairman and Managing Director said the order book is net of executed work and excludes unbilled revenue, so it will translate fully into future revenue. Of the FY27 target of Rs 10,000 crore to Rs 11,000 crore, about Rs 5,500 crore was secured by H1. About Rs 7,000 crore of road bids and Rs 5,000 crore of railway bids are awaiting results, and with MSRDC, NHAI, Rajasthan and metro pipelines, they expect Rs 5,000 crore to Rs 6,000 crore of inflows in H2, with a similar run-rate possible in FY28.
Q: What is the status of asset monetization, and how much gain and cash will be booked? A: The Chairman and Managing Director said 51% of the fifth HAM asset (AP1) was transferred in Q2 FY27 for partial consideration of Rs 103 crore, and the equity transfer is expected to be completed in Q3 FY27. Of the total consideration for the five monetized assets, about Rs 550 crore is still to be received in Q3 and Q4 FY27, subject to commercial operation dates and conditions. The standalone gain on these collections is expected to be only about Rs 70 crore, largely in Q4, because of losses booked in the net worth of some assets.
Q: Contract assets have risen to about Rs 2,165 crore and debt remains high. When will working capital peak and normalize? A: The Chairman and Managing Director said contract assets have largely plateaued and should fall by about Rs 700 crore to Rs 800 crore by March 2027, to roughly Rs 1,200 crore to Rs 1,500 crore. About Rs 580 crore is stuck in railways pending commissioning milestones, with the balance spread across HAM projects and variation claims. With receivable monetization proceeds, gross debt is targeted to fall from Rs 1,595 crore to about Rs 900 crore by year-end, and finance costs are expected at about Rs 80 crore in H2 FY27 and Rs 110 crore to Rs 160 crore in FY28.
Q: How are commodity price increases affecting margins in the roads, rail, transmission and BESS segments? A: The Chairman and Managing Director said highway projects are protected by real-time price escalation for bitumen and crude products. Rail projects have seen some impact, though limited, as civil work is less exposed to steel and cement. In transmission, aluminum and copper prices are up 30% to 40% versus bid levels, but escalation has been built into budgets. BESS margins have compressed to about 12% from over 20% due to dollar and battery price movements, and this has been factored in.
Q: What is the status of the Pune-Silrul project and its revenue contribution? A: The Chairman and Managing Director said the Rs 3,931 crore Pune-Silrul project is in mobilization, with the appointed date expected within a month. Utility shifting is at an advanced stage, and the project is expected to contribute about Rs 600 crore in H2 FY27 and roughly Rs 700 crore for the full year. About Rs 130 crore was booked in H1, mainly from utility shifting and pre-operative expenses.
Q: What is the progress on the solar, BESS and transmission portfolios? A: The Chairman and Managing Director said the solar project is about 96% complete, with delays from monsoon, transmission lines and land issues now being resolved, and 89% of project debt is sanctioned. For BESS, binding agreements cover three projects totaling about 1,470 MWh, with delivery expected by January 2027 and commissioning by March 2027 for two projects and June 2027 for the third, generating about Rs 225 crore in annual revenue. In transmission, PSA has been executed for all three projects, financial closure is achieved for Angul, and the others are targeted shortly.
Q: What caused the technical disqualification in the UPDA Link Expressway packages, and does it affect MSRDC bids? A: The Chairman and Managing Director said five to seven contractors, including the company, were disqualified for a small technical reason that most bidders missed. For the re-invited MSRDC projects, the qualification criteria are the same as three years ago when the company qualified, and the current stage is RFP, so there is no concern on that front.
Q: What is the status of the Karnal Ring Road monetization? A: The Chairman and Managing Director said the provisional completion certificate has been applied for, after which a six-month cooling period applies before seeking monetization approval from NHAI and lenders. The process will take at least eight to ten months, and the value is not expected to
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
