The stock price of H.G. Infra Engineering has been on a declining trajectory for the past three consecutive trading sessions, resulting in a cumulative loss of 3.82% over this period. Today’s fall of 0.86% further extends this trend, with the stock underperforming the construction sector by 1.31%. This movement places the share price below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling persistent bearish momentum.
In contrast, the broader market has shown resilience. The Sensex opened flat but moved into positive territory, trading at 84,731.03 points, a 0.07% gain and just 0.66% shy of its 52-week high of 85,290.06. The index is supported by mega-cap stocks and is positioned above its 50-day moving average, which itself is above the 200-day moving average, indicating a bullish trend for the benchmark. 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 year, H.G. Infra Engineering’s stock has declined by 32.01%, a stark contrast to the Sensex’s 9.22% gain over the same period. The stock’s 52-week high was Rs.1,560.95, underscoring the extent of the recent price erosion. This underperformance extends beyond the short term, with the stock also lagging the BSE500 index over the past three years, one year, and three months.
Financially, the company has reported negative results for five consecutive quarters. The latest quarterly profit after tax (PAT) stood at Rs.52.18 crores, reflecting a fall of 35.4% compared to previous periods. Operating cash flow for the year is recorded at Rs.119.56 crores, the lowest level observed in recent years. The return on capital employed (ROCE) for the half-year period is at 9.88%, marking a low point in the company’s efficiency metrics.
Despite these figures, the company demonstrates certain strengths. Management efficiency is indicated by a higher ROCE figure of 21.17% in other assessments, suggesting pockets of operational effectiveness. Additionally, the company has shown healthy long-term growth trends, with net sales increasing at an annual rate of 20.16% and operating profit growing at 26.01% annually. The valuation metrics also suggest an attractive position, with an enterprise value to capital employed ratio of 1.3, which is lower than the average historical valuations of its peers.
Profitability has seen a decline of 24.2% over the past year, aligning with the stock’s negative return profile. The majority shareholding remains with promoters, maintaining a stable ownership structure.
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In summary, H.G. Infra Engineering’s stock has experienced a notable decline to its 52-week low of Rs.861.1, reflecting a combination of subdued financial results and market pressures. While the broader market and sector indices have maintained relative strength, the stock’s performance highlights ongoing challenges in maintaining profitability and investor confidence. The company’s long-term growth in sales and operating profit contrasts with recent profit declines and valuation adjustments, painting a complex picture of its current standing within the construction sector.
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