HG Infra stock tumbles 35% in 2025; is it worth a buy post Q1 results?

Shares of HG Infra Engineering Ltd have fallen 35 per cent in 2025 so far. Following the infra player's June quarter results, domestic brokerage JM Financial retained its bullish stance citing robust backlog. The brokerage said the FY26 guidance is optimistic and trimmed its earnings estimates but kept its positive stance on the stock intact.

HG Infra reported a 10 per cent year-on-year decline in adjusted profit after tax (PAT) at Rs 126 crore in Q1 FY26, missing JM Financial’s estimate of Rs 140 crore, primarily due to weaker operating margins. Revenue, however, rose 14 per cent YoY to Rs 1,700 crore. EBITDA dropped 3 per cent YoY to Rs 236 crore, with margins contracting sharply to 13.8 per cent.

JM Financial said, “HG Infra expects margins to normalize to 15-16 per cent levels from 2Q onwards. The company has completed monetization of five HAM assets at an equity valuation of Rs 1,380 crore, which will help deleverage the balance sheet once proceeds are received in FY26.”

The brokerage said that HG Infra has a robust backlog of Rs 14,700 crore (2.3x trailing revenues), though only 51 per cent is currently under execution. The entire backlog is expected to be executable by November 2025. It added that the company’s bid pipeline stands at Rs 2.2 lakh crore, with bids worth Rs 16,000 crore already submitted and results awaited.

While HG Infra has guided for FY26 revenue of Rs 7,000 crore, JM Financial called the outlook “optimistic” citing delays in appointed dates for several projects. JM Financial trimmed its FY26 and FY27 EPS estimates by 9 per cent and 4 per cent, respectively, but lifted FY28 EPS forecast by 7 per cent factoring in asset monetization benefits.

Reiterating its positive stance, JM Financial said, “We expect 15 per cent EPS CAGR over FY25-28E. HG trades at an attractive valuation of 10x/8x FY27/28E EPS. We maintain BUY with a revised price target of Rs 1,510.”

At last check, HG Infra was trading at Rs 975.60, up 0.08 per cent on the BSE.