The stock of H.G. Infra Engineering, a key player in the construction sector, has recorded a consecutive three-day decline, resulting in a cumulative loss of 3.82% over this period. Today's fall of 0.86% further extends this negative momentum. The share price now trades below all major moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a persistent bearish trend.
In comparison, the broader market has shown resilience. The Sensex opened flat with a marginal dip of 29.24 points but has since edged higher to trade at 84,731.03, a 0.07% gain. The index remains close to its 52-week high of 85,290.06, just 0.66% away, supported by mega-cap stocks leading the advance. The Sensex is also positioned above its 50-day moving average, which itself is above the 200-day moving average, signalling a generally bullish market environment contrasting with H.G. Infra Engineering's performance.
Over the past year, H.G. Infra Engineering's stock has delivered a return of -32.01%, significantly lagging behind the Sensex's 9.22% gain during the same period. The stock's 52-week high was Rs.1,560.95, highlighting the extent of the recent decline.
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Financially, H.G. Infra Engineering has reported negative results for five consecutive quarters. The operating cash flow for the year stands at Rs.119.56 crores, which is the lowest recorded in recent periods. The quarterly profit after tax (PAT) has declined by 35.4%, amounting to Rs.52.18 crores. Additionally, the return on capital employed (ROCE) for the half-year is at a low of 9.88%, reflecting subdued capital efficiency.
These figures illustrate challenges in both near-term profitability and longer-term capital utilisation. The stock's underperformance is also evident when compared to the BSE500 index, where it has lagged over the last three years, one year, and three months.
Despite these concerns, certain operational metrics present a more nuanced picture. The company demonstrates high management efficiency, with a ROCE of 21.17% noted in other periods. Net sales have grown at an annual rate of 20.16%, while operating profit has expanded at 26.01% annually, indicating healthy long-term growth trends.
Valuation metrics suggest the stock is trading at a discount relative to its peers' historical averages. The enterprise value to capital employed ratio stands at 1.3, which is considered very attractive. However, profit figures over the past year have fallen by 24.2%, aligning with the stock's negative return profile.
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Majority ownership of H.G. Infra Engineering remains with promoters, maintaining a stable shareholding structure. The stock's current market capitalisation grade is 3, reflecting its mid-tier market cap status within the construction sector.
In summary, H.G. Infra Engineering's stock has experienced a notable decline to Rs.861.1, its lowest level in 52 weeks, amid a backdrop of subdued financial results and underperformance relative to broader market indices. While certain long-term growth indicators remain positive, the recent trend highlights ongoing pressures within the company's financial performance and market valuation.
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