Ceigall India Order Cancellation, H. G. Infra Engineering Solar Restructuring With JV And HBL Engineering Order

Ceigall India Ltd.

Recent filing: (ORDER CANCELLATION) Ceigall India has received a letter from the State Highways Authority of Jharkhand informing that the tender for the project Construction of 4 Lane Elevated Road from Sahajanand Chowk to Judge Colony, Ranchi (awarded value: INR 207 Cr) has been cancelled due to administrative reasons as per the RFP clause.

SUMMARY: 4y Operating Profit uptrend | PE 19.1x (Sector PE range 10-50) | Orderbook INR 12,153 Cr (as of Sep-24) (3.8x of TTM Revenue) | Infrastructure

FUTURE OUTLOOK: As per Q1FY25 Concall, Management is hoping that the company will make a proper effort to report same level of growth during FY25.

• MCap of INR 6,315 Crore (share price = INR 362 / share) (as on 16th Dec ‘24)
• TTM PE 19.1x (as on 16th Dec ‘24) Retail float = 7.0% (Sep 2024)

FOOD FOR THOUGHT: Negative operating Cashflows for FY24.

Question 1: Who are the promoters of Ceigall India?

Company is an infrastructure construction company with experience in undertaking specialized structural works such as elevated roads, flyovers, bridges, Railway over bridges (ROB), tunnels, highways, expressways and runways.

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H. G. Infra Engineering Ltd.

Recent filing: (SOLAR RESTRUCTURING WITH JV) H.G. Green Energy Private Limited a Wholly-owned Subsidiary of H.G. Infra has transferred 26% of its partial stake from its 23 wholly owned Subsidiaries to Stockwell Solar Projects Private Limited (JV Partner). Stockwell specializes in Solar OPEX/RESCO and CAPEX models. Company has expertise in renewable energy and providing engineering to deliver a comprehensive service, from site evaluation and design to financing, execution, and maintenance.

SUMMARY: 6y Operating Profit uptrend | PE 18.8x (Sector PE range 10-50) | Institutional entry | Infrastructure

FUTURE OUTLOOK: As per Q2FY25 Investor Presentation, Company has a total Order book of INR 16,624 Cr as of Sep 2024 | As per Q1FY25 Concall, Company committed for an order inflow of INR 11,000 Cr to INR 12,000 Cr in FY25, with a revenue growth of 17% to 18% and a margin of 15% to 16%.

• MCap of INR 9,871 Crore (share price = INR 1,515 / share) (as on 16th Dec ‘24)
• TTM PE of 18.8x (as on 16th Dec ‘24) Retail float = 10.5%% (Sep-24)

FOOD FOR THOUGHT: Client concentration risk: Road projects from NHAI and ARTL contribute to 87% of orderbook as of Dec-23.

Question 1: Who are the promoters of H. G. Infra Engineering?

With a resilient two-decade journey, HGIEL has emerged as one of India's fastest-growing construction companies. Its dedication to quality and timely execution has been pivotal in establishing it as a trusted leader in the infrastructure industry. It is engaged in the business of EPC and Maintenance of roads, bridges, flyovers, etc.

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HBL Engineering Ltd

Recent filing: (ORDER) HBL Engineering has received a work order worth INR 1,522 Cr from Chittaranjan Locomotive Works for supply, Installation and Commissioning of on-Board Train Collision Avoidance System (TCAS) (KAVACH) equipment in locomotives within 1 year.

SUMMARY: 4y Operating Profit uptrend | Excellent Sep-24 results | PE 56.8x (Sector PE range 30-70) | Capital Goods – Electrical equipment

FUTURE OUTLOOK: As per the FY24 Annual Report, FY 25 sales may be about the same as FY 24 because; no Kavach tenders were issued from Feb 2022 till 6 August 2024 | FY 26 sales may be 30% more than FY 25 sales, because Kavach tenders were issued in August 2024 | FY 27 and FY 28 may have compound growth in sales at about 20 % a year over FY 26

• MCap of INR 19,653 Crore (share price = INR 709/ share) (as on 16th Dec ‘24)
• TTM PE 56.8x (as on 16th Dec ‘24) Retail float = 27.6% (Sep-24)

FOOD FOR THOUGHT: Working Capital intensive business

Question 1: Who are the promoters of HBL Engineering?

HBL is a company that creates advanced products to meet India's technology needs. For over 40 years, they have worked in industries like aviation, defense, railways, and energy. One of their key achievements is developing railway safety systems to improve Indian Railways' security and capacity. HBL is now focusing on electric vehicles (eMobility), providing India with locally made motors and batteries for eco-friendly transport.

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