Moneycontrol
Sep 14, 2017 02:41 PM IST | Source: Moneycontrol.com

Graphite India, HEG surged 8-10% after Jefferies initiates coverage with buy rating

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.

Graphite India share price rallied 8.4 percent intraday and HEG surged 10 percent Thursday after Jefferies has initiated coverage with buy rating on both stocks.

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.
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