HG Infra Engineering Ltd.'s first non-highway project from the Delhi Metro Rail Corporation Ltd. will turn revenue accretive in FY24, according to Chairman Harendra Singh.
The project value is almost 3.5% over the estimated cost of DMRC, and 50% of the project will be completed in FY24 with the remainder in the first eight to nine months of FY25, Singh told BQ Prime. "We are looking forward to bagging more such orders from DMRC and other Tier II cities."
The company has added projects worth Rs 5,700 crore so far in the current fiscal and appointment dates for most of these projects have been received, according to Singh. "But, we have yet to get the appointment date for DMRC and NHAI projects in Haryana."
"Timelines for the NHAI project in Haryana will be very similar to the DMRC project and will take 20 to 22 months for completion," said Singh. "We expect 35–40% revenue recognition from these two projects in FY24, with the balance in FY25."
The company's total order book now stands at Rs 11,500 crore, Singh said.
Focus On HAM Projects
HG Infra, the chairman said, will focus on hybrid annuity mode projects for the remainder of the current financial year. The company is looking to add three to four HAM projects in FY23, with at least one project in the water sector, he said. "At least 10% of FY23 orders would come from the railway, water, and metro segments."
Sing expects to see high project execution during the fourth quarter of the current fiscal, as four projects are on track for asset monetisation, with deal closure expected in the next two months. These projects are expected to generate revenue by the end of the second quarter of fiscal 2024, he said.
HG Infra is on track to meet its FY23 guidance, according to Singh, as he anticipates adding the remaining projects, worth between Rs 3,500 and 4,000 crore, by the fourth quarter.
Emphasising the company's ability to complete its project before schedule, Singh said, "Due to the early completion of the project, we received Rs 17 crore as a bonus in the third quarter, with the balance of Rs 26 crore expected in the Q4FY23 and Q1FY24."
The company is expecting to complete another one to two projects ahead of schedule, adding to the bonus for FY24, Singh said.
HG Infra expects to see 20% revenue growth and a quarterly addition of Rs 8,000–10,000 crore worth of orders in FY24, Singh said.
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