HG Infra, PNC rally up to 13% on winning road projects in Maharashtra

Shares of HG Infra Engineering and PNC Infratech have hit their respective record high and rallied by up to 13 per cent on the BSE in Wednesday’s intra-day trade after these companies emerged as L1 bidders for engineering, procurement, and construction (EPC) road projects of Maharashtra State Road Development Corporation (MSRDC).

Thus far in the current calendar year, HG Infra has zoomed nearly 90 per cent, while, PNC Infratech has soared 44 per cent. In comparison, the S&P BSE Sensex has gained 2.5 per cent.

Among the individual stocks, HG Infra hit a new high of Rs 1,643.30, surging 13 per cent after the company said it has been declared as L1 bidder by MSRDC for the construction of two expressways with a bid project cost of Rs 4,142.22 crore.

The first contract is for the Nagpur-Chandrapur super communication highway in the State of Maharashtra on EPC mode. The first expressway spanning a length of 28.20 KM and at a bid project cost of Rs 1,991.1 crore is to be completed in 30 months. And the second expressway in the state of Maharashtra on EPC mode with the project spanning a length of 31.75 KM and a bid project cost of Rs 2,151.1 crore is to be completed in 30 months.

HG Infra's order book (OB) as of FY24 stood at Rs 12,434 crore, 2.4 times of trailing twelve months (TTM) book to bill. With the two orders, the revenue visibility will improve. The current inflows ensure that 15-20 per cent topline growth guidance for FY25 can be met, ICICI Securities said in a note.

Meanwhile, shares of PNC Infratech soared 12 per cent to Rs 512.40 after the company emerged as L1 bidder for two EPC road projects with quoted amount of Rs 4,994 crore.

The first contract is for the construction of access-controlled Pune ring road in Pune district spanning a length of 13.8 KM with the project costing Rs 2,486 crore and to be constructed over a period of 30 months. The second road project for the construction of access-controlled expressway connector from Jalna to Nanded with the project costing Rs 2,508 crore and to be constructed over a period of 30 months.

PNC’s OB was healthy at Rs 17,380 crore, 2.3x book to bill. With the two orders, the revenue visibility will improve. With monetised assets and cash inflow thereafter, PNC is well placed to capture healthy growth pie from the road ordering ahead, the brokerage firm said.