600% Return On Investments? Is it Possible?
The HEG stock has seen a strong run up on the bourses generating a 600% Return On Investments in the last 8 months. It had given a breakout around May end 2017 and has given humongous returns ever since.
HEG Limited is engaged in manufacturing of graphite electrodes, which are used by manufacturers of steel. The Company’s segments include Graphite, Power and Unallocable items. The strong performance has been driven by a significant change in the outlook for the global graphite electrode segment in the last few months, which has brightened the prospects of the sector.
In an interview with CNBC-TV18, Raju Rustogi, CFO & COO of HEG said that the current graphite electrode spot price is at USD 6,000 per tonne versus USD 2,200 per tonne in January 2017. Talking about capex, he said we will not be doing any capex for the calendar year 17-18. On capacity front, he said that the current capacity utilization is at 80-85 percent.
The stock price of HEG was around 330 In April 2017 and it rose up to 2000+ in November 2017, which is a near 600% increase in less than 8 months.
Upgradation of credit Rating of HEG Limited happened recently: `IND A` Outlook Positive from `IND A` Outlook Stable by India Ratings and Research. Also, HEG is now a debt-free company. This will supposedly further boost the share price going ahead.
HEG reported a stellar Q2FY18 performance marked by healthy capacity utilization levels and a sharp increase in realization Topline for the quarter was at Rs 409.5 crore. The raw material cost (as a percentage of sales) declined to 29.8% in Q2FY18 (vs. 47.7% in Q2FY17 and 46.4% in Q1FY18).