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H.G. INFRA IPO – AN EXCITING ROAD AHEAD

  • Date 23rd Feb 
  • IPO Opens 26-28th Feb with price range Rs. 263-270
  • Small Cap: Rs. 1,760 cr. Mkt cap
  • Industry – Roads Construction
  • Valuations: P/E 32.9 times TTM, P/B 3.7 times (Post IPO)
  • Advice: SUBSCRIBE 

 

 

SUMMARY of IPO

  • Overview: HGI is a Jaipur based infrastructure construction, development and management firm with a focus on road projects, including highways, bridges and flyovers.
  • Revenues and profit for FY17 were Rs. 1,059 cr. and Rs. 53 cr. HGI’s revenues, EBITDA and PAT grew at 34.3%, 27.5% and 37.0% CAGR in 5 years.
  • HGI has a good 5 years performance where it has emerged as a rising star. The healthy order book, roster of completed roads projects and fair financial controls are impressive.
  • At a P/E of 32.9 times (adjusted post IPO), the valuations of the IPO appear to be high. However earnings growth is likely to be at a faster pace due to reduced interest costs, better efficiencies and sectoral traction. Good track record, robust financial performance, sectoral tailwinds and an experienced management team makes this IPO attractive.
  • Key Risks: 1) Project execution delays 2) Labor unavailability 3) Intense competition.
  • Opinion: Investors can SUBSCRIBE to this IPO with a 3 year perspective.

Investors may read the rest of this report on www.jainmatrix.com

Regards,

Punit Jain, founder JainMatrix Investments

DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. JM has no stake, ownership or known financial interests in HGI or any group company. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Tuesday, 15 October 2019

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