Emkay Research has recommended a buy rating on HEG with a target price of Rs 434 in its June 16, 2008 research report. "We value HEG under 3 scenarios. As per our worst case scenario, the stock appears to be fully priced assuming a P/E multiple of 5x on the core earnings and 50% discount to the attributable value of BEL in HEG for projects implemented/under progress ignoring all MoUs signed. Our bull case assumptions are 13x P/E multiple with 20% discount to the attributable value of HEG in BEL for projects already implemented/under implementation."

"In our bull case assumptions, we also value the MoUs signed by BEL at Rs 161 per share of HEG. Our base case scenario assumes a multiple of 8x for the core earnings and 30% discount to the attributable value of BEL in HEG for projects under various phases of implementation, ignoring the value of MoUs signed. On base case, our price target stands at Rs 434, which provides an upside of 58%," says Emkay's research report.

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