Highway Infrastructure wins ₹220.66 crore order
Highway Infrastructure Limited has received a ₹220.66 crore contract from the Uttar Pradesh Expressways Industrial Development Authority for toll collection and plaza operations on the Gorakhpur Link Expressway.
The two-year contract is valued at ₹105.08 crore in the first year, with a 10% escalation in the second year.
Under the contract, the company will manage user fee collection and toll plaza operations across the expressway. It will also deploy four patrol-cum-safety vehicles with operating personnel.
The order adds to Highway Infrastructure’s growing toll operations business. In August, the company secured an ₹80.17 crore NHAI contract for toll operations at Palayam Fee Plaza on NH-44 in Tamil Nadu.
My view: The key point is the repeatability of toll collection contracts rather than the headline order value alone. The new contract gives the company two years of revenue visibility, while the 10% escalation provides some support to the second-year contract value. I would still track actual toll collections, operating margins and the company’s ability to win similar contracts before assuming that the order will translate into a meaningful improvement in earnings.
Shares of Highway Infrastructure Limited closed at ₹43.83 on September 16, up 0.53% on the NSE.
What I am watching next: Fresh toll-operation wins, revenue execution and margin performance over the next few quarters. A sustained increase in order wins without deterioration in margins would strengthen the earnings case.
Stance: Positive on the order inflow, but I would wait for execution and margin data before taking a stronger view.