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Buy HEG, target Rs 681: Emkay
Emkay research has maintained buy rating on HEG with target price of Rs 681. We assume a 5% dilution in HEG arising out of preferential allotment to the promoters and employees.
Emkay research has maintained buy rating on HEG with target price of Rs 681, in its Decmber 12, 2007 report. "Due to the robust performace of the graphite electrode division, continued strength in demand for electrodes globally and the value of investment of HEG in BEL, we upgrade our target to Rs 681 which is an aggregate of (a) 13x FY09 FDEPS of Rs 33.05 and (b) Rs 252 as value of investment in BEL. At CMP of Rs 546, the stock trades at 16.5x our FY09 FDEPS estimate. However, excluding Rs 252 as the value of investment in BEL, at CMP the stock trades at 8.9x FY09 FDEPS. We assume a 5% dilution in HEG arising out of preferential allotment to the promoters and employees. We value the power licenses which have been awarded to BEL excluding those for which the license is yet to be received," according to Emkay research report.
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