Dear All,
Please find attached “New Report on HEG Ltd”.
| BUY | |
| CMP | Rs 215 |
| Target Price | Rs 259 |
| Investment Period 6 Months | |
| Switch | |
| From | Graphite India |
| To | HEG |
| Investment Period 6 Months | |
HEG is a leading manufacturer and exporter of graphite electrodes used in electric arc furnaces (EAF) in the steel industry. We expect the company to report volume growth of 20% in FY2012, driven by improvement in global demand for steel and increased market share. Further, the company has announced a buyback of `67cr with a maximum price of `350 as against the CMP of `215, which is likely to result in minimal downside risk in the stock. We recommend Buy on the stock with a target price of `259, based on a target P/E of 7x and implied P/B of 1.2x on FY2012 estimates. These valuations do not include the company’s investment in Bhilwara Energy, which may lead to further upsides. We also recommend a switch from Graphite India to HEG, as HEG has underperformed by ~30% in the last one year.
If you have any further queries, feel free to call us on 022 39500777 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,5th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39500777
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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