ICICI Direct has given Buy recommendation for HEG recommended buy rating on the stock with a target price of Rs 2800 in its research with a target price of Rs. 2800 in its research report issued on Jun 07, 2021

ICICI Direct’s research report on HEG

For Q4FY21, HEG’s standalone topline came in at Rs 380 crore, up 2% YoY, 19% QoQ. However, at the EBITDA level, the company reported a loss of Rs 5 crore. Other income for the quarter was at Rs 25 crore. Ensuing net loss for the quarter was at Rs 7 crore. The Q4FY21 performance was impacted by a sharp rise in other expenses. Other expenses for Q4FY21 were at Rs 120 crore compared to Rs 71 crore in Q3FY21 and Rs 78 crore in Q4FY20. During Q4FY21, other expenses as a percentage of sales were at 32% in Q4FY21 compared to 21% in Q4FY20 and 22% in Q3FY21. During the quarter, other expenses included Rs 35 crore spent on CSR activities, which led to higher total other expense. However, adjusting for CSR expense, HEG’s adjusted EBITDA would have been ~Rs 30 crore.


We value the stock at 6.5x FY23E EV/EBITDA and arrive at a target price of Rs 2800. On the back of an improved industry outlook, we upgrade the stock from HOLD to BUY.