Since May 8, 2018, after the March quarter (Q4FY18) results, the stock has outperformed the market by surging 45% as compared to 6.5% rise in the S&P BSE Sensex.
For FY18, the company reported a stellar performance by reporting net profit of Rs 10.81 billion against net loss of Rs 501 million in FY17. The topline increased around 220% year on year (YoY) to Rs 27.50 billion. The EBITDA (earnings before interest, taxes, depreciation and amortization) margin for the fiscal was at 62.6% against 9.4% in FY17. HEG has also repaid its entire debt (long term, short term as well as working capital) and is now debt free, providing further strength to balance-sheet.
ICICI Securities expect HEG to continue to report a healthy performance on the back of increasing realisations. HEG’s topline is likely to increase around 649% YoY, around 19% QoQ. The brokerage firm expects HEG to report strong EBITDA margins of 66.7%.
“We expect HEG to continue to report robust profitability for Q1FY19E supported by consistently increasing realisations. We expect the company to report a healthy capacity utilisation level of around 85%. The topline is likely to increase 648.8% YoY and 19.0% QoQ to Rs 15.38 billion while EBITDA is likely to come in at Rs 10.25 billion, implying an EBITDA margin of 66.7% (vs. Q4FY18: 73.6% and Q1FY18:11.4%). We expect the company to report a profit after tax of Rs 6.70 billion,” ICICI Securities said in Q1FY19 result preview.
At 11:55 am; HEG was trading 1.7% higher at Rs 4,183 on the BSE, as compared to 0.38% rise in the S&P BSE Sensex. A combined 150,252 equity shares changed hands on the counter on the BSE and NSE so far.