HG Infra Engineering Limited (HGIEL) has announced its financial results for the second quarter, revealing a significant decline in profitability despite maintaining stable revenue.

Financial Performance

For Q2, HGIEL reported:

The company's consolidated revenue from operations remained relatively flat at ₹9,045.03 crore, compared to ₹9,024.08 crore in the same quarter last year, representing a marginal increase of 0.2%.

Profitability Metrics

HGIEL experienced a notable decline in profitability:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased by 6.1% year-over-year to ₹2,062.33 crore.
• EBITDA margin contracted to 22.8% from 24.3% in the corresponding quarter of the previous year.
• Net profit after tax fell sharply by 35.8% to ₹518.36 crore, compared to ₹807.12 crore in the previous year's quarter.
• Net profit margin declined to 5.7% from 8.9% year-over-year.

Key Factors Affecting Performance

The decline in profitability can be attributed to several factors:

1. Increased finance costs, which rose to ₹1,081.10 crore from ₹624.20 crore in the same quarter last year.
2. Higher depreciation and amortization expenses of ₹400.46 crore, up from ₹358.87 crore.
3. A significant increase in contract and site expenses to ₹2,725.82 crore, compared to ₹670.82 crore in the previous year's quarter.

Balance Sheet and Cash Flow

As of September 30:

• Total assets stood at ₹1,03,943.99 crore, up from ₹87,727.12 crore at the end of March.
• The company's borrowings increased, with non-current borrowings at ₹41,079.03 crore and current borrowings at ₹14,671.19 crore.
• Cash and cash equivalents were ₹620.58 crore, down from ₹870.89 crore at the end of the previous fiscal year.

Operational Highlights

During the quarter, HGIEL's Board of Directors approved a proposal to divest 100% investment in five of its wholly-owned subsidiaries, subject to various conditions including achievement of COD (Commercial Operation Date) in respective projects and approvals from lenders and regulatory authorities.

Outlook

The company's focus on divesting certain subsidiaries may indicate a strategic realignment to improve overall financial performance. However, the execution of these divestitures and their impact on future results remain to be seen.

Investors and analysts will likely be watching closely to see how HG Infra Engineering addresses the profitability challenges and manages its increased debt levels in the coming quarters.

HG Infra Engineering Limited (HGIEL) has taken a significant step in its corporate restructuring efforts by executing a Securities Purchase Agreement (SPA) with Neo Infra Income Opportunities Fund. The agreement, finalized on November 6, 2025, involves the sale of HGIEL's entire shareholding in its wholly owned subsidiary, H.G. Raipur Visakhapatnam OD-6 Private Limited.

Transaction Details

The key aspects of the agreement are as follows:

This transaction marks the culmination of a process that was initially announced on August 13, 2025. At that time, HGIEL had disclosed the required regulatory details, setting the stage for this final agreement.

Corporate Disclosure

In compliance with SEBI regulations, HGIEL has promptly informed the stock exchanges about this development. The company's communication highlights:

• The agreement aligns with Regulations 30 and 51 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
• The transaction involves the complete divestment of HGIEL's stake in the subsidiary.
• All necessary details as mandated by SEBI were previously provided in the August 13, 2025 announcement.

Upcoming Financial Results

In a separate but related corporate announcement, HGIEL has scheduled a Board of Directors meeting for November 12, 2025. The primary agenda for this meeting includes:

• Review and approval of unaudited standalone and consolidated financial results for Q2 FY2026 (quarter ending September 30, 2025).
• As per regulatory norms, the trading window for company securities remains closed from October 1, 2025, until 48 hours post the declaration of these financial results.

This strategic move by HG Infra Engineering Limited appears to be part of a broader corporate strategy, potentially aimed at streamlining operations or reallocating resources. Investors and market analysts will likely be keen to understand the financial implications of this divestment during the upcoming results announcement.