HEG - Q3FY12 Result Update - Emkay

Reco: ACCUMULATE
CMP: Rs 203
Target Price: Rs 230

Higher utilizations with lower costs boost margins

- PAT at Rs 240 mn was up 78% QoQ was well above our and market estimates on higher volume and realizations and lower tax rate due to better performance in power segment

- EBITDA rose 93% QoQ to Rs 851 mn. QoQ fall in RM costs to sales by 546 bps on better product mix helped EBITDA margin to improve by 652 bps QoQ to 20.4%

- Growth (of 35% YoY and 31% QoQ) in topline (at Rs 4.2 bn) was due to more than 100% capacity utilizations coupled with impact of better realizations during the quarter

- Factoring in improved operating performance with better margins our FY12 and FY13 EPS stand revised at Rs 38 and Rs 46 respectively; Maintain Accumulate with TP of Rs 230.

Source : Equity Bulls

Keywords