H.G. Infra Engg.

H.G. Infra Engineering is actively transforming from a road-centric EPC company into a diversified infrastructure conglomerate. The company has strategically ventured into high-potential sectors such as railways, metros, solar energy, battery storage, and transmission infrastructure, with a goal to expand its non-road infrastructure portfolio to approximately 35% by FY27. This diversification is aimed at leveraging India's evolving infrastructure needs and securing high-potential projects in emerging areas.

As of September 2025, the total order book stood at INR13,933 crores, with roads and highways contributing 56% (INR9,163 crores), rails and metros 20% (INR2,720 crores), and renewables (BESS, Solar, T&D) making up 14%. The company has a strong bidding pipeline of INR1,35,000 crores for the year, including significant opportunities from NHAI (INR65,000 crores) and other ministries (INR70,000 crores), and aims to secure INR10,000-11,000 crores in new order inflows for FY26.

H.G. Infra executed a binding offer document for the monetization of 5 HAM projects (Raipur-Visakhapatnam AP1, OD5, OD6; Khammam-Devarapalle 1, 2) to Neo Infra Income Opportunities Fund for an enterprise value of INR3,584 crores. This transaction, involving the sale of 100% equity stake in these subsidiaries, is expected to strengthen the balance sheet, reduce leverage, and enhance financial flexibility, with funds earmarked for new HAM bids and other high-return infrastructure opportunities. The share purchase agreement for one project (OD6) has been executed, with the remaining four targeted for this quarter.

For Q2 FY26, standalone revenue was INR1,154 crores with an EBITDA margin of 12.7% and PAT margin of 5.8%. Consolidated revenue was INR905 crores with an EBITDA margin of 22.8% and PAT margin of 5.7%. Profitability was impacted by a INR35 crores provision in Q2 (following INR40 crores in Q1) on the Ganga Expressway project due to a 'change in law' related to aggregate procurement, which management may pursue through arbitration. The company expects margins to normalize to 15-16% from Q3 FY26 onwards.

Standalone gross debt stood at INR1,634 crores, comprising working capital, NCDs, and term debt. The increase in debt during Q2 was attributed to advances to vendors (INR150 crores), mobilization advances (INR250 crores), and pending HAM bank disbursements (INR490 crores). Management anticipates a significant decrease in debt in Q3 and Q4 as HAM bank disbursements are received and working capital cycles tighten, supporting overall liquidity.

The company's solar projects (700MW DC, EPC value INR2,243 crores) are 94.1% complete, with 89% of debt funding sanctioned and 79% disbursed, and full commissioning expected within the timeline. In Battery Energy Storage Systems (BESS), H.G. Infra has secured 735MW/1,470MWh capacity, initiated procurement for key components, and expects INR150-250 crores in revenue this financial year, with an annual revenue target of INR225 crores upon full completion and commissioning of all BESS projects.

The INR4,800 crores Ganga Expressway project is 99% complete, with COD expected soon. The UER project has been completed and handed over. Several HAM projects, including Raipur-Visakhapatnam OD-5, OD-6, and AP-1, and Khammam-Devarapalle KD1, KD2, are nearing 100% completion with COD expected in Q3/Q4 FY26. Railway projects like DMRC metro (92% complete) and Bilaspur RVNL (75% complete) are also progressing well, despite some initial delays due to external factors like CONCOR execution and abnormal rains.