HEG Input costs, forex loss weighed on margins ACCUMULATE ::Emkay

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HEG

Input costs, forex loss weighed on margins

ACCUMULATE

CMP: Rs209                                        Target Price: Rs224

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n     Q2FY12 topline above estimates at Rs 3,192, up 7% YoY and 14% QoQ, primarily driven by higher volume and INR depreciation that improved realizations in INR term

n     EBITDA in line with estimates at Rs 442 mn, down 27% YoY and flat QoQ due to increased domestic input costs and also weak INR that raised landed cost of needle coke

n     Reported PAT stood at Rs 135 mn, down 32% QoQ, however, adjusted for forex loss of Rs 116 mn, APAT came at Rs 251 mn, up by 27% QoQ

n     Adjusted for share buy back, our FY12E and FY13E EPS stand at Rs 22.5 and Rs 32.9 respectively; Revising our SOTP target price to Rs 224; Maintain Accumulate