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Last Updated : Nov 14, 2018 05:25 PM IST | Source: Moneycontrol.com

Buy HEG; target of Rs 5750: ICICI Direct

ICICI Direct is bullish on HEG has recommended buy rating on the stock with a target price of Rs 5750 in its research report dated November 09, 2018.

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ICICI Direct's research report on HEG


HEG again reported a stellar performance in Q2FY19 marked by sustained healthy realisation, lower raw material cost. Capacity utilisation was at ~85%. Revenue from operation was at Rs 1793.8 crore (up 338% YoY, 13% QoQ), higher than our estimate of Rs 1589.3 crore The company reported a strong EBITDA of Rs 1368.8 crore, higher than our estimate of Rs 1017 crore. Resultant EBITDA margin was at 76.3% (vs. Q2FY18: 46.3%, Q1FY19:74.8% and our estimate of 64%) Reported PAT came in at Rs 888.9 crore vs. our estimate of Rs 665.7 crore. The company declared an interim dividend of Rs 30/share.


Outlook


We continue to remain positive on the graphite electrodes space and value the company at 10x FY20E EPS of Rs 575 thereby arriving at a target price of Rs 5750. We maintain our BUY rating on the stock.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on Nov 14, 2018 05:25 pm
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