The research house set a target price of Rs 342 for Graphite, implying a potential upside of 31 percent as it feels earnings will grow at CAGR of 116 percent over FY17-20.
It also expects improvement in realisation to drive revenue CAGR of 32 percent over FY17-20 and cash conversion cycle to improve to 27/20 days in FY18/19.
Company's German subsidiaries will turnaround with revival in graphite demand, the research house said.
Meanwhile, HEG share price hit a fresh record high of Rs 743.95 today after Jefferies has initiated buy rating on the stock with a target price of Rs 1,050, implying a potential upside of 50 percent.
The research house feels the company will return to profitability in FY18 and expects earnings CAGR of 129 percent over FY18-20.
It expects graphite electrode prices to rise and utilisation to improve. It expects capacity utilisation of 85/90 percent in FY18/19.
Company's revenue is expected to grow at CAGR of 44 percent over FY17-20 and margin is expected to be in range of 30-32 percent, Jefferies said.At 11:45 hours IST, the stock price of Graphite India was quoting at Rs 268, up 5.59 percent while HEG was at Rs 737.10, up 8.98 percent on the BSE.