⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
HEG - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | HEG | Market Cap | 9,825 Cr. | Current Price | 509 ₹ | High / Low | 672 ₹ |
| Stock P/E | 34.8 | Book Value | 224 ₹ | Dividend Yield | 0.35 % | ROCE | 5.19 % |
| ROE | 3.40 % | Face Value | 2.00 ₹ | DMA 50 | 540 ₹ | DMA 200 | 524 ₹ |
| Chg in FII Hold | 0.55 % | Chg in DII Hold | 0.16 % | PAT Qtr | 141 Cr. | PAT Prev Qtr | 131 Cr. |
| RSI | 41.4 | MACD | -12.6 | Volume | 6,94,081 | Avg Vol 1Wk | 9,84,519 |
| Low price | 405 ₹ | High price | 672 ₹ | PEG Ratio | -1.20 | Debt to equity | 0.15 |
| 52w Index | 38.7 % | Qtr Profit Var | 43.7 % | EPS | 14.6 ₹ | Industry PE | 32.5 |
📊 Core Financials
- Quarterly PAT rose from ₹131 Cr. to ₹141 Cr., showing sequential growth.
- ROCE at 5.19% and ROE at 3.40% → weak efficiency compared to peers.
- Debt-to-equity ratio of 0.15 → low leverage.
- Cash flows supported by graphite electrode operations but cyclical in nature.
💹 Valuation Indicators
- P/E Ratio: 34.8 vs Industry PE of 32.5 → slightly overvalued.
- P/B Ratio: ~2.27x (₹509 / ₹224) → moderate valuation.
- PEG Ratio: -1.20 → negative, indicating weak growth visibility.
- Intrinsic Value: Current price near fair zone, supported by cyclical demand.
🏢 Business Model & Competitive Advantage
- Leading graphite electrode manufacturer with global presence.
- Strong brand recognition in industrial materials sector.
- Exposure to steel industry cycles limits earnings predictability.
📈 Technical & Entry Zone
- Current Price: ₹509, below 50 DMA (₹540) and 200 DMA (₹524).
- RSI: 41.4 → approaching oversold zone.
- MACD: -12.6 → bearish momentum.
- Entry Zone: Attractive accumulation between ₹480–₹500.
- Long-Term Holding: Suitable for cyclical investors with 3–5 year horizon.
✅ Positive
- Debt-light balance sheet.
- Sequential PAT growth of 43.7%.
- FII holdings increased by 0.55% and DII holdings by 0.16%.
⚠️ Limitation
- Weak ROE and ROCE compared to peers.
- Negative PEG ratio indicates limited growth visibility.
📉 Company Negative News
- Stock corrected from 52-week high of ₹672.
- Efficiency metrics remain weak despite profit growth.
📈 Company Positive News
- Quarterly PAT growth of 43.7% shows strong rebound.
- EPS of ₹14.6 reflects profitability despite cyclical pressures.
- FII and DII inflows indicate institutional confidence.
🏭 Industry
- Graphite electrode industry tied to steel production cycles.
- Industry PE at 32.5 indicates moderate investor optimism.
🔎 Conclusion
HEG is a graphite electrode manufacturer with low debt and improving profitability, but weak efficiency metrics and cyclical exposure limit stability.
Valuations are slightly premium, with limited growth visibility.
Best accumulated around ₹480–₹500 for investors willing to ride commodity cycles over a 3–5 year horizon.