This Multibagger Small Cap Electrodes Sector Stock Will Trade 400% Ex-Dividend Tomorrow

HEG Limited will soon pay a final dividend of 400% to its shareholders. The declared dividend will trade ex-dividend tomorrow, 24 August. HEG is an Electrodes & Graphite sector small-cap stock with a market capitalization of Rs 5,185.89 crore.

400% Final Dividend

The Board of Meeting of the company was held on May 25, 2022, where the Board of directors of the company for the Financial Year 2021-2022 recommended a final dividend of 400% i.e. Rs 40 per equity share of Rs 10 each.

The company in its filing to the BSE & NSE on May 25, 2022, stated, "The Board of Directors have recommended a Final Dividend on Equity Shares at the rate of Rs. 40 /- per Equity Share of the face value of Rs. 10/- each, for the financial year 2021-22 subject to the approval of the Shareholders at the ensuing Annual General Meeting (AGM) of the Company. The dividend will be paid/ dispatched within 30 days from the date of the Annual General Meeting."
 
Ex-Dividend Date - The ex-dividend date of the 400% Final dividend is August 24, 2022.

Dividend History

HEG Ltd. maintains a good track record of dividend payouts in the past 21 years. Since September 2001, the company declared 25 Dividends. The company has declared 20 final and 2 Interim dividends in 21 years. It's worth noting that the company has not declared any special dividends in 21 years. Last year, the company declared a final dividend of 30% amounting to Rs 3 per equity share of Rs 10 each.

Stock Outlook

On Tuesday, 23 August, the HEG stocks opened at Rs 1352 apiece and closed at Rs 1,343.65 apiece. The 52-week low of the stock is Rs 890.80 and the 52 week high of the stock is Rs 2629 apiece, respectively. On intraday, the stock's low is Rs 1332.80 apiece and high is Rs 1,361.95 apiece, respectively.

Returns On Investment

The stocks of the company in the past 1 week gained 2.42%. Over the past 1 and 3 months, the stocks have surged roughly 20.92% and 25.24%, respectively. Whereas, in the past 1 year, the stocks declined 37.73%. In the past 3 and 5 years, the stocks gave 47.45% positive returns and multibagger 177.61% returns, respectively.

 

Q1FY23 Results

HEG reported a steady operational performance in Q1FY23. 

• For Q1FY23, standalone operations capacity utilisation was at 92%. For Q1FY23, total operating income was at Rs 722 crore, up 75% YoY, 7% QoQ.
• Reported EBITDA for the quarter was at Rs 184 crore, up 154% YoY, 17% QoQ. EBITDA margin for the quarter was at 25.5%, up 800 bps YoY, 220 bps QoQ.
• Ensuing standalone net profit for the quarter was at Rs 134 crore, up 139% YoY, 18% QoQ.

 

According to ICICI Direct - Key triggers for future price performance

• Going forward, demand for graphite electrode and realisation is expected to remain volatile in the near term while cost inflation may continue to add pressure on margins.
• HEG's capacity expansion from 80000 tonnes to 100000 tonnes per annum is going on in full swing and is expected to be completed by end December 2022 with commercial production set to start in January-March 2023 quarter (i.e. Q4FY23E).
• Over FY22-24E, we expect topline to grow at 24% CAGR while EBITDA and PAT are expected to register a CAGR of 18.3% and 17.8%, respectively.

 

According to ICICI Direct

HEG's share price has given a return of ~66% over the last two years (from ~Rs 798 in August 2020 to Rs 1325 in August 2022). "Rising energy costs and inflationary pressure on economic growth due to Russia-Ukraine conflict have adversely impacted demand prospects, particularly in the European Union. Hence, we downgrade the stock from BUY to HOLD. We value HEG at Rs 1400, 6x FY24E EV/EBITDA," the brokerage said.

 

Disclaimer

The stock has been sourced from NSE and BSE. Greynium Information Technologies and the Author are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.