HCC shares climb 16% in early deals, here’s why

Shares of HCC zoomed 16% in early deals on Tuesday after brokerage Elara Capital initiated coverage on the civil construction firm with a buy call. HCC is likely to rise 58% from the current level, said Elara, pegging its price target at Rs 63 per share. HCC's ten-year slog improved its financial health, as the company pared its peak standalone debt of Rs 6,200 crore in FY22 to Rs 3,400 crore in FY24.

The stock zoomed 15.81% to Rs 45.62 against the previous close of Rs 39.79 on BSE.  Total 50.56 lakh shares of the firm changed hands amounting to a turnover of Rs 22.20. Market cap of the firm climbed to Rs 7609.02 crore.

HCC stock has gained 139.35% in year and risen 266% in two years.

In terms of technicals, the relative strength index (RSI) of HCC stock stands at 58, signaling it's trading neither in the overbought nor in the oversold zone. HCC stock has a one-year beta of 1.4, indicating very high volatility during the period. HCC shares are trading higher than the 5 day, 10 day, 20 day , 50 day, 100 day, 150 day and 200 day moving averages.         

The stock hit a 52 week low of Rs 17.05 on June 20, 2023 and a 52 week high of Rs 46 on February 2, 2024. 

Elara sees HCC's standalone revenue and EBITDA to reach a CAGR of 20 percent during FY24-27E, with an earnings CAGR at 50 percent due to lower interest costs.

“HCC is well positioned to capture on the Rs 1.5 lakh crore nuclear opportunity. According to Elara, the firm could see order inflows of Rs 9,000 crore compared to its guidance of Rs 10,000 crore. Also, inflows are likely to increase by 15 percent per annum for the next two years,” said Elara.

Hindustan Construction Company is principally engaged in the business of providing engineering and construction services.