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Home / Markets / Stock Markets /  HDFC Securities sees 30% rise in this multibagger stock. Should you buy?
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Multibagger stock: The year 2021 has seen a lot of multibagger stocks. HG Infra shares are one of them. This mid-cap stock has surged from around 220 to 695 in year-to-date time, logging around 215 per cent rise in 2021. However, on account strong Q2FY22 results of the company, brokerage firm HDFC Securities is expecting further gain in this one of the multibagger stocks in 2021. It has given 'buy' tag to HG Infra shares with long-term target of 920. HG Infra share price today is 695 that means the brokerage sees more than 30 per cent rise in the counter in long-term.

Highlighting the financials of the company reported in Q2FY2021-22, HDFC Securities said, "HG Infra (HG) reported revenue, EBITDA and APAT of 7.5bn, 1.2bn and 0.7bn respectively, a miss of 6.6 per cent, 5.1 per cent and 5.5 per cent respectively. NWC days are stable at 76 (71 in Mar-21), aided by timely government payment. The company is in advanced talks with potential investors about the monetisation of three HAM projects (COD by Q4FY22). If talks fructify, it may recycle 2.8bn of its equity investments at an implied valuation of 1x P/BV."

Enhancing the EPS estimates on strong order book, HDFC Securities said, "The latest order book (OB) stands at 90bn (around 3.6x FY21 revenue, 46bn under execution). Given robust order inflows and strong execution, we increase our EPS estimate."

Expecting debt of the company to further reduce, the brokerage report says, "The standalone net debt remained flat at 1.6bn (similar level as in Jun’21), with net D/E (Debt Equity Ratio) at 0.13. HG Infra NWC days were stable at 76 against 71 in March-21. Debtors, currently at 4.5bn, are likely to be reduced to 4bn by Mar-22."

On its suggestion to stock market investors in regard to this multibagger stock, HDFC Securities said, "Given robust order inflows and strong execution, we increase our EPS estimate. We maintain BUY with an increased SOTP-based TP (Target Price) of 920 (14x Sep-22E EPS, HAM 1x P/BV)."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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