Here's Why We Think HEC Infra Projects (NSE:HECPROJECT) Might Deserve Your Attention Today

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like HEC Infra Projects (NSE:HECPROJECT). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

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HEC Infra Projects' Improving Profits

Over the last three years, HEC Infra Projects has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. Thus, it makes sense to focus on more recent growth rates, instead. In impressive fashion, HEC Infra Projects' EPS grew from ₹5.25 to ₹8.99, over the previous 12 months. It's not often a company can achieve year-on-year growth of 71%. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. The music to the ears of HEC Infra Projects shareholders is that EBIT margins have grown from 7.1% to 12% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

Check out our latest analysis for HEC Infra Projects

Since HEC Infra Projects is no giant, with a market capitalisation of ₹1.4b, you should definitely check its cash and debt before getting too excited about its prospects.

Are HEC Infra Projects Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

One shining light for HEC Infra Projects is the serious outlay one insider has made to buy shares, in the last year. In other words, the Executive Director, Rahul Shah, acquired ₹90m worth of shares over the previous 12 months at an average price of around ₹129. Seeing such high conviction in the company is a huge positive for shareholders and should instil confidence in their mission.

It's commendable to see that insiders have been buying shares in HEC Infra Projects, but there is more evidence of shareholder friendly management. To be specific, the CEO is paid modestly when compared to company peers of the same size. The median total compensation for CEOs of companies similar in size to HEC Infra Projects, with market caps under ₹18b is around ₹4.2m.

The HEC Infra Projects CEO received total compensation of only ₹1.9m in the year to March 2025. You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of good governance, more generally.

Is HEC Infra Projects Worth Keeping An Eye On?

HEC Infra Projects' earnings per share have been soaring, with growth rates sky high. Better yet, we can observe insider buying and the chief executive pay looks reasonable. It could be that HEC Infra Projects is at an inflection point, given the EPS growth. If so, then its potential for further gains probably merit a spot on your watchlist. Don't forget that there may still be risks. For instance, we've identified 2 warning signs for HEC Infra Projects (1 shouldn't be ignored) you should be aware of.

Keen growth investors love to see insider activity. Thankfully, HEC Infra Projects isn't the only one. You can see a a curated list of Indian companies which have exhibited consistent growth accompanied by high insider ownership.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.