HCC shares jump 15% after Elara Capital initiates buy rating, sees 58% upside

The brokerage firm forecasts a standalone revenue and EBITDA CAGR of 20% each during FY24-27E, with an earnings CAGR of 50% due to lower interest costs.

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The brokerage also highlighted the significant reduction in HCC's debt. Peak consolidated debt, including accrued interest, was Rs 12,200 crore in FY15, which has since reduced by 71% to Rs 3,500 crore in FY24. Similarly, peak standalone debt of Rs 6,200 crore in FY22 fell by 45% to Rs 3,400 crore in FY24 and has stabilized.

Recent credit rating upgrades and the removal of restrictions on bank guarantee limits have enabled HCC to bid for new contracts. The company holds an L1 position on orders worth Rs 4,500 crore, has bids under evaluation totaling Rs 10,400 crore, and a pipeline of Rs 46,400 crore across sectors such as power, hydro, roads, nuclear, and transportation.

"We expect Rs 9,000 crore inflows in FY25E vs guidance of Rs 10,000, increasing by 15% pa for the next two years. Partnerships with PE investors would help the firm bid for long-term PPP projects, leading to less strain on balance sheet," Elara Capital added.

As of 10:20 am, HCC's stock was trading 13% higher at Rs 45 on the BSE. On a year-to-date basis, the stock has surged 62%, and 140% in the last 12 months.

Technically, the relative strength index (RSI) of the stock is currently at 58. An RSI below 30 is considered oversold, while an RSI above 70 is considered overbought, according to Trendlyne data. Additionally, the Moving Average Convergence Divergence (MACD) is at 0.2, above its center and signal line, indicating a bullish trend.

Moreover, HCC's stock price is higher than the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages, further reinforcing the positive momentum.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)