HEG Q4FY11 Result Update; Margin under pressure; stable performance likely; Buy; Target: Rs 276 :: Emkay

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HEG Q4FY11 Result Update; Margin under pressure; stable performance likely; Buy; Target: Rs 276

n    Q4FY11 topline at Rs 2816 mn, down 16% YoY and 9% QoQ on account of subdued prices for graphite electrodes and lower volumes

n    EBITDA fell by 22% and 17% on YoY and QoQ respectively to Rs 581 mn mainly due to rise in employee costs and other expenditure    

n    Rise in other income coupled with lower depreciation, interests and taxes helped the company to report a PAT of Rs 344 mn, down 12% YoY and 10% QoQ 

n    Our SOTP target comes at Rs276 valuing the core business at 5xFY13 EV/ EBITDA and 25.8% stake in Bhilwara energy at 1.5x P/BV with 20% holding company discount; Buy