HEG Ltd - one of the largest producers of Graphite Electrodes in Asia ,is a member of LNJ Bhilwara Group.Graphite Electrode is using to produce Steel through Electric Arc Furnace Route .Needle Coke is the raw material for producing Graphite Electrode.Company having a manufacturing capacity of 66,000 MT P/A and about 80 % of this is exporting to various countries.Company is supplying about 8 % of total world production of Graphite Electrode.Worldwide 35% of steel is produced through Electric Arc Furnace Route.Its customer list includes include Arcelormittal, Nucor ,Posco, Megasa Evraz,Hyundai Steel ,Tata Steel ..etc It is a power intensive industry where 5000 unit power is needed to produce one ton of graphite electrode.In such an industry HEG’s 77 MW captive power plant is a big positive. Due to revival in demand and price in recent times , HEG is now increasing its production capacity from 66000 ton to 80000 ton P/A.The demand scenario is improving worldwide and company is expected to benefit a lot going forward.For the December quarter HEG Posted a sales of Rs.418 Cr and a net profit of Rs.25 Cr .Recently company concluded a Buy Back of its own shares at a cost of Rs.67 Cr.In addition to this buy back ,promoters are hiking their stake very aggressively through open market purchases.Considering HEG’s leadership position in this industry and improving prospects of business ,recommending a Buy at CMP Rs.218/- for long term investment.
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