The stock has recorded a consecutive decline over the last three trading sessions, with a cumulative return of -3.82% during this period. Today's performance saw the stock fall by 0.86%, underperforming the construction sector by 1.31%. Notably, H.G. Infra Engineering is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum in the short to long term.
In contrast, the broader market has shown resilience. The Sensex opened flat but gained 0.07% to trade at 84,731.03 points, remaining just 0.66% shy of its 52-week high of 85,290.06. The index is supported by bullish moving averages, with the 50-day moving average positioned above the 200-day moving average, and mega-cap stocks leading the gains. This divergence highlights the relative weakness of H.G. Infra Engineering within the construction sector and the wider market.
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Over the last twelve months, H.G. Infra Engineering has generated a return of -32.01%, a stark contrast to the Sensex's positive 9.22% return over the same period. The stock's 52-week high was Rs.1,560.95, indicating a substantial decline from that peak. This performance is further underscored by the company's financial results, which have shown negative trends across several key metrics.
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 profit after tax (PAT) for the latest quarter is Rs.52.18 crores, reflecting a decline of 35.4% compared to previous quarters. Additionally, the return on capital employed (ROCE) for the half-year is at 9.88%, marking a low point in the company's recent financial history.
These figures illustrate challenges in both near-term profitability and longer-term capital efficiency. 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 trends, certain operational aspects of H.G. Infra Engineering remain noteworthy. The company demonstrates high management efficiency, with a ROCE of 21.17% reported in other periods, indicating effective utilisation of capital in some segments. Furthermore, the company has exhibited healthy long-term growth, with net sales increasing at an annual rate of 20.16% and operating profit growing at 26.01% annually. These growth rates suggest that while recent quarters have been challenging, the company has maintained a capacity for expansion over a longer horizon.
Valuation metrics also present an interesting picture. The company’s ROCE of approximately 9.9% corresponds with a very attractive valuation, reflected in an enterprise value to capital employed ratio of 1.3. This valuation is lower than the average historical valuations of its peers, indicating that the stock is trading at a discount relative to comparable companies in the construction sector.
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Profitability trends over the past year show a decline of 24.2%, which aligns with the stock’s negative return of 32.01% during the same timeframe. This correlation between profit contraction and share price movement highlights the market’s response to the company’s financial performance.
Ownership structure remains concentrated, with promoters holding the majority stake in H.G. Infra Engineering. This factor often influences strategic decisions and long-term planning within the company.
In summary, H.G. Infra Engineering’s fall to a 52-week low of Rs.861.1 reflects a combination of subdued financial results, sustained price weakness, and valuation adjustments relative to its sector and market benchmarks. While the broader market and construction sector have shown more positive trends, this stock continues to face headwinds as indicated by its recent performance and financial metrics.
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