HCC - Hind.Construct.

📊 NSE: HCC 🏢 Construction 📅 Last Updated: 12/13/2025 23:01

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) grew by 2% YoY to INR 4,888 Cr in FY24. Standalone revenue for FY24 was INR 5,015.7 Cr, while H1 FY25 revenue stood at INR 2,468.7 Cr. Core EPC business operating margins improved to 8.6% in FY24 and further to 12.5% in H1 FY25.

Geographic Revenue Split

The order book is geographically diversified across India: Maharashtra (27%), Uttarakhand (27%), Gujarat (15%), Manipur (12%), Tamil Nadu (10%), Rajasthan (3%), and other states (6%).

Profitability Margins

Standalone PAT margin was 2.9% in FY24 and 3.0% in H1 FY25. However, consolidated PAT declined 52.4% from INR 178.57 Cr in FY24 to INR 84.92 Cr in FY25 due to the adoption of a new tax regime, resulting in a PAT margin of 1.73%.

EBITDA Margin

EBITDA margin improved significantly from 13.62% (INR 686.66 Cr) in FY24 to 19.43% (INR 932.98 Cr) in FY25, driven by improved operating leverage and price escalation clauses.

Capital Expenditure

The company raised INR 950 Cr in FY25 through a Rights Issue (INR 350 Cr) and QIP (INR 600 Cr) to fund working capital and debt obligations. Asset monetization of non-core assets and awards realized INR 395 Cr in FY24.

Credit Rating & Borrowing

The company maintains a 'Stable' outlook. Borrowing costs are impacted by high debt levels, though Total Outside Liabilities/Tangible Net Worth (TOL/TNW) improved from 7.2x in FY24 to 5.1x in H1 FY25. Interest coverage ratio stood at 1.4x in H1 FY25.

⚙️ Operational Drivers

Raw Materials

Steel and Cement are the primary raw materials, though their specific percentage of total cost is not explicitly detailed; they are noted as highly volatile inputs that impact margins.

Capacity Expansion

Current order book stands at INR 9,758 Cr as of December 31, 2024, providing revenue visibility for approximately 2 years. New orders worth INR 4,000 Cr were added in the last year, with an additional L1 status for projects worth INR 3,400 Cr.

Raw Material Costs

Raw material costs are susceptible to volatility; however, risk is mitigated by price escalation clauses present in most contracts to protect the EBITDA margin (currently 19.43%).

Manufacturing Efficiency

Operating leverage has improved through lower sub-contracting dependence and ramping up execution in ongoing projects to reduce 'stuck' project counts.

📈 Strategic Growth

Expected Growth Rate

10-15%

Growth Strategy

Growth will be achieved through the monetization of non-core assets (e.g., Steiner AG stake sale), recovery of arbitration awards totaling INR 700-1,000 Cr targeted for FY26, and aggressive bidding for complex infrastructure projects in hydro, nuclear, and transportation segments.

Products & Services

Engineering and construction services for dams, tunnels, bridges, hydro-electric power plants, nuclear power plants, expressways, roads, marine works, and water supply systems.

Brand Portfolio

HCC (Hindustan Construction Company).

New Products/Services

Expansion into complex tunneling and specialized nuclear power works; expected revenue contribution is linked to the 4% nuclear and special segment of the current INR 9,758 Cr order book.

Market Expansion

Focusing on 10+ Indian states with significant concentration in Maharashtra and Uttarakhand (54% combined) and diversifying into transportation (54% of order book).

Market Share & Ranking

One of the oldest and established players in the Indian infrastructure sector (founded 1926), specializing in complex engineering projects.

Strategic Alliances

Joint ventures and associate companies like Prolific Resolution Private Limited (PRPL) and Steiner AG (Switzerland).

🌍 External Factors

Industry Trends

The construction industry is seeing a shift toward more complex, large-scale infrastructure projects. HCC is positioning itself by leveraging its 9-decade track record in specialized segments like hydro and nuclear power.

Competitive Landscape

Highly fragmented with aggressive bidding from small and medium players, exerting constant pressure on margins.

Competitive Moat

Moat is built on a 90-year track record and demonstrated capability in executing high-complexity projects (tunnels, nuclear plants) that act as a barrier to entry for smaller players. Sustainability depends on resolving legacy debt and improving liquidity.

Macro Economic Sensitivity

Highly sensitive to the infrastructure sector downtrend and changes in the political/economic environment in India, including general and state elections which can delay project awards.

Consumer Behavior

Not applicable (B2B/Government-focused).

Geopolitical Risks

Exposure to international operations through Steiner AG, though the company is transitioning to a stake-sale model with rights over future cashflows.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent regulatory approvals for ecological dislocation, occupational health and safety standards, and labor laws.

Environmental Compliance

Exposed to environmental risks from construction disruptions; mitigated by an ESG framework covering carbon emissions and energy consumption.

Taxation Policy Impact

Adoption of a new tax regime in FY25 resulted in a decline in PAT to INR 84.92 Cr from INR 178.57 Cr.

Legal Contingencies

Significant pending arbitration claims; the company is at an advanced stage of resolving awards aggregating INR 700 Cr to INR 1,000 Cr in FY26. Qualified audit opinion issued due to material weaknesses in internal financial controls for 11 subsidiary companies with assets of INR 858.29 Cr.

⚠️ Risk Analysis

Key Uncertainties

Non-fructification of arbitration recoveries (INR 700-1,000 Cr) and potential invocation of performance bank guarantees (BGs) could impact liquidity by over 20%.