HEG: Poised for growth - Anand Rathi

- Scale in global league with 80,000 tonnes per annum production capacity - largest integrated facility in the world with captive power generation

- ~75% of electrode production is exported to 25 countries - strong customer relationships and product knowledge to drive higher utilisation levels from 75% to 85% in three years.

- Operating margins to improve ~300bps from FY14 to FY16, still below past 10 years' average of 21.9%, driven by utilisation and realisation

- Strong cash-flow generation, healthy balance sheet, high dividend yield - added attractiveness

- Initiate Buy with target price of Rs. 235 based on 7x EV/EBITDA on FY15e basis.

Source : Equity Bulls

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