Why Did HG Infra Experience a 39% Decline in Q1 Profit?
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Synopsis
In a significant financial report, HG Infra Engineering Limited has revealed a staggering 39 percent decline in its Q1 profit for FY 2025-26. This article dives into the reasons behind this drop and examines the company's financial health amid challenging market conditions, providing insights for investors and stakeholders alike.
Key Takeaways
- HG Infra's Q1 profit fell by 39%
- Net profit for Q1 FY26 reached Rs 99.2 crore
- Operational revenue decreased by 3%
- EBITDA declined by 17.5%
- HG Infra specializes in infrastructure projects
Mumbai, Aug 13 (NationPress) Infrastructure firm HG Infra Engineering Limited has disclosed a significant 38.95 percent year-on-year (YoY) reduction in its net profit for the first quarter of the financial year 2025-26 (Q1 FY26).
The Rajasthan-based company reported a net profit of Rs 99.2 crore for the April to June quarter, a notable decrease from Rs 162.5 crore during the same timeframe last fiscal year (Q1 FY25), as stated in its filing with the stock exchange.
Operational revenue also saw a downward trend, falling 3 percent to Rs 1,482 crore from Rs 1,528 crore a year prior.
At the operational level, earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 17.5 percent to Rs 260 crore, down from Rs 315.7 crore in the same quarter last year.
The EBITDA margin decreased to 17.5 percent, down from 20.6 percent the previous fiscal year, according to the regulatory filing.
For the quarter under review, the company's expenses totaled Rs 1,352.7 crore, compared to Rs 1,307.2 crore in the corresponding period last year.
Major expense contributors included cost of materials consumed at Rs 633.4 crore, contract and site expenses at Rs 460.6 crore, finance costs at Rs 94.5 crore, and employee benefits expenses at Rs 91.3 crore.
HG Infra Engineering, located in Rajasthan, specializes in constructing highways, roads, bridges, and runways, along with civil projects like land development, water pipelines, rehabilitation, and upgrading works.
The company's Q1 results were released after the market closed on Wednesday.
Earlier that day, HG Infra's shares finished 0.47 percent higher at Rs 994 each on the Bombay Stock Exchange (BSE).
Founded in 2003, HG Infra operates in over 15 states across India, providing EPC (engineering, procurement, and construction) and hybrid annuity model (HAM) services.
The company is recognized for its robust in-house equipment fleet, skilled workforce, and proven track record of timely project delivery.
It is currently led by Chairman and Managing Director Harendra Singh.
Point of View
It is crucial to provide an unbiased perspective on HG Infra's recent financial performance. While the drop in profits raises concerns, it is imperative to analyze the underlying factors and consider the company's long-term strategies amidst a fluctuating market. Understanding these dynamics will help stakeholders make informed decisions moving forward.
NationPress
19/08/2025
Frequently Asked Questions
What caused HG Infra's profit decline in Q1?
The decline was attributed to a drop in net profit due to reduced operational revenue and increased expenses.
How much did HG Infra's revenue decrease?
Revenue from operations decreased by 3 percent, falling to Rs 1,482 crore.
What are the primary expenses for HG Infra?
Key expenses included costs of materials, contract and site expenses, finance costs, and employee benefits.
Who leads HG Infra Engineering?
The company is currently led by Chairman and Managing Director Harendra Singh.
In how many states does HG Infra operate?
HG Infra operates in over 15 states across India.
