HEG - Margin squeezed by power & fuel costs ACCUMULATE ::Emkay

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HEG

Margin squeezed by power & fuel costs

ACCUMULATE

CMP: Rs230                                        Target Price: Rs261

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n     Q1FY12 topline came in line with estimates at Rs 2,795 mn, up 26% YoY and flat QoQ, primarily driven by volume growth on YoY basis

n     EBITDA at Rs 441 mn down 23% YoY and 24% QoQ due to increased power and fuel expenses, higher domestic input costs and muted realizations

n     Lower depreciation, tax and interest costs gave some respite to the PAT that stood at Rs 198 mn, down 26% YoY and 43% QoQ

n     We cut our earnings estimate for FY12E and FY13E to Rs 27 and Rs 33 respectively; Revise our SOTP target price to Rs 261; Downgrade to Accumulate