HEG Ltd - EMKAY

[Rajesh Desai]

HEG Ltd Reco: HOLD CMP: Rs 177 Target Price: Rs 171 Lower utilizations offset by better product mix ·       Topline fell 31% on YoY but rose 28% on QoQ basis to Rs 3.02 bn (below our estimates) due to lower utilizations at 58%. We had assumed a utilization of 64% during the quarter ·      EBITDA declined 33% YoY but rose 22% QoQ to Rs 457 mn (in line with our estimates). EBITDA margin declined 33 bps/79 bps YoY/QoQ to 15.1% on high cost needle coke prices ·      APAT at Rs 143 mn, fell 56% YoY but gained 138% QoQ (our estimates Rs 131 mn). This quarter the company reported a forex loss of Rs 92 mn. Reported PAT loss came at Rs 51 mn ·      Expect utilizations to be better however improvement in realizations is unlikely due to higher competition; Interest cost likely to remain high. Hold with a revised TP of Rs 171 Recommendation History Recent Research Reports HEG Ltd: Sharp drop in utilizations impacted performances Metallica; Fall in steel prices indicate weak demand HEG Ltd: Uncertainty to remain for some more times Metallica; Macro-economic environment to be the key HEG Ltd: Margin contracts, uncertainty remains Metallica; Mixed trends HEG Ltd: Margin contraction sharper than expected Metallica; Exports and weak Rupee helping prices HEG Ltd: Margin expansion – a positive surprise Metallica; INR supporting domestic prices HEG Ltd: Fx loss surprises Metallica; Non ferrous metals seen catching up with ferrous   Metallica; Ferrous stable, non- ferrous volatile   Metallica; China to remain the key   Metallica; Stabilization in prices likely, Eyes on US Fed   Metallica; Stabilization in prices likely, Eyes on US Fed   Click here to read report: Result Update

 

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Emkay Equity Advisory | Emkay Global Financial Services Ltd. | www.emkayglobal.com

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CA. Rajesh Desai