H.G. Infra Secures ₹670 Crore BESS Project; Powers India’s Largest 300MW/600MWh System

If you’re watching beaten-down mid-caps for a potential reversal play, H.G. Infra Engineering just flashed an interesting signal. The stock trades at ₹866.65, barely 2% above its 52-week low of ₹850, despite landing a major battery storage agreement that could reshape its growth trajectory. For traders willing to stomach execution risk, this disconnect between price action and fundamental news might represent the kind of contrarian opportunity that pays off big when sentiment turns.

The market’s tepid reaction tells its own story.

While the broader infrastructure sector grapples with margin pressures and rising debt costs, H.G. Infra’s foray into the booming battery energy storage market positions it at the intersection of two powerful themes: India’s renewable energy push and grid modernization. The question isn’t whether the news is positive – it’s whether traders should pull the trigger now or wait for clearer technical signals.

What Happened

H.G. Infra Engineering’s wholly-owned subsidiary, H.G. Choraniya Bess Private Limited, executed a Battery Energy Storage Purchase Agreement with Gujarat Urja Vikas Nigam Limited on November 28, 2025. This isn’t a small pilot project – we’re talking about a 300 MW / 600 MWh system that ranks among India’s largest standalone BESS procurements.

The numbers matter. The 12-year contract runs at a tariff of ₹285,600/MW/month with an estimated total project cost of ₹670 crore plus taxes. H.G. Infra must deliver within 24 months, putting the commissioning deadline around October 2027. This follows their earlier 250 MW/500 MWh BESS win under GUVNL’s Phase IV tender, proving the first wasn’t a fluke.

According to the company’s exchange filing (December 1, 2025), the total order book stood at ₹13,932 crore as of September 2025. The BESS segment now represents roughly 6.4% of the total backlog, giving H.G. Infra genuine diversification beyond its traditional roads and railways focus.

Stock Performance & Analyst View

The stock closed at ₹866.65 on December 1, 2025, barely budging with a 0.16% gain despite the positive announcement. This follows a brutal downtrend that shaved 44% off the stock since its 52-week high of ₹1,559 in January 2025. Volume barely registered at 89,819 shares, well below the 20-day average of 153,610, suggesting institutional apathy rather than active selling.

Analyst sentiment remains surprisingly bullish despite recent weakness. The consensus rating stands at “Strong Buy” based on 14 analysts covering the stock (Investing.com, November 28, 2025). Specifically, 12 analysts recommend buying, 2 suggest holding, and zero recommend selling – a clean sweep that stands in stark contrast to the price chart.

Here’s where it gets interesting for traders. The average 12-month price target sits at ₹1,355.14, implying 56.36% upside from current levels. The range spans from ₹920 on the low end to ₹1,900 on the high end, creating a wide dispersion that signals genuine uncertainty about fair value.

• IDBI Capital (November 14, 2025): Buy rating, ₹1,126 target, indicating 29.93% upside
• ICICI Direct (November 17, 2025): Buy rating, ₹1,120 target, implying 29.24% upside
• ICICI Securities (November 17, 2025): Hold rating, ₹920 target, offering just 6.16% upside
• Anand Rathi (August 21, 2025): Buy rating, ₹1,339 target, representing 54.51% upside
• Axis Capital (August 17, 2025): Buy rating, ₹1,364 target, showing 57.40% upside

The divergence between ICICI Securities’ cautious Hold rating and the broader Street optimism deserves attention. ICICI flagged execution risks in new segments and a weak executable order book when they downgraded in August 2025.

What This Means for Traders

Momentum context matters here. The stock is down 53.9% from its all-time high of ₹1,879.90 set in July 2024 and trading in the bottom decile of its 52-week range. This isn’t momentum trading – it’s potential value hunting with a catalyst. The BESS agreement provides a fundamental story, but technicals haven’t confirmed a bottom yet.

Entry and exit considerations split along aggressive versus conservative lines. If you’re aggressive, current levels near ₹866 offer attractive risk-reward with a tight stop-loss at ₹850, the 52-week low. A break below ₹850 opens the door to another 10-15% downside, but holding support could trigger a quick 10-15% bounce toward the first analyst target at ₹920. Conservative traders should wait for a decisive close above ₹900 with volume expansion above 150,000 shares as confirmation.

Sentiment is shifting, but slowly. The Q2 FY26 results showed net profit plunging 35.8% YoY to ₹51.84 crore, with EBITDA margins compressing to 22.8%. Interest costs surged 73.14% YoY to ₹108.11 crore, representing the highest quarterly interest burden in company history. These numbers explain why the market yawned at the BESS news – traders want proof that diversification can offset core business margin pressure.

Key price levels to watch paint a clear roadmap. Support sits at ₹850 (the 52-week low), followed by psychological support at ₹800. Resistance appears first at ₹900 (recent pivot high), then ₹920 (ICICI Securities’ target and near the upper end of recent range), and finally ₹1,000 (former support now resistance). A break above ₹1,000 would signal a potential trend reversal.

Next catalysts will make or break this trade. Q3 FY26 earnings in February 2026 will reveal whether margin pressure is easing. Project execution updates on the BESS front, particularly land identification and financing closure, could trigger re-rating. The company is also in talks to monetize six HAM projects in FY26, which would deleverage the balance sheet and potentially unlock value.

Risk factors remain substantial. First, execution risk in the BESS segment without a proven track record could lead to cost overruns or delays. Second, rising interest costs continue squeezing margins, with debt levels climbing as the company funds HAM project equity. Third, the core roads and railways business faces headwinds from client payment delays and competitive bidding that pressures margins. Fourth, if the stock breaks below ₹850, technical selling could accelerate, creating a momentum-driven downdraft disconnected from fundamentals.

The Bigger Picture

H.G. Infra’s timing into BESS isn’t random. India targets 74 GW of battery storage capacity by 2031-32, up from just 205 MW currently installed. Government support through viability gap funding of ₹54 billion for 30 GW of BESS projects creates a massive addressable market. GUVNL alone tendered 500 MW/1 GWh capacity in Phase VI, with tariffs 40% lower than non-VGF projects, making economics compelling for developers with execution capability.

The company isn’t alone in this race. Tata Power, Acme Solar, and ENGIE are all building BESS portfolios, but early mover advantage in Gujarat – India’s most power-hungry industrial state – could prove valuable. With average battery costs expected to drop 40% by 2030, first-movers who master execution will dominate as the market scales.

Closing

For active traders, H.G. Infra presents a classic risk-reward setup at ₹866. The BESS agreement provides a fundamental catalyst, analyst consensus offers 56% upside, and the proximity to 52-week lows defines clear risk parameters. Aggressive traders can initiate positions here with stops at ₹850, targeting ₹920 for a quick 6-8% gain or holding for the ₹1,100+ targets if momentum builds. Conservative investors should wait for Q3 earnings clarity and a technical breakout above ₹900 before committing capital.

The infrastructure sector’s cyclical downturn has created this opportunity, but execution will determine whether H.G. Infra emerges as a storage leader or gets squeezed between rising costs and execution challenges. Watch volume, monitor margin trends, and keep your stops tight – this trade pays off if management delivers, but punishes harshly if they don’t.

Disclaimer: This blog has been written exclusively for educational purposes and does not constitute investment advice or personal recommendations. The author is not SEBI-registered as an investment advisor. Recipients should conduct their own research and consult a qualified, SEBI-registered investment advisor before making any investment decisions. Investments in the securities market are subject to market risks; read all related documents carefully before investing.