InCred Equities - HEG Limited

	Mar-23A	Mar-24F	Mar-25F	Mar-26F
Revenue (Rsm)	24,672	21,036	29,442	34,914
Operating EBITDA (Rsm)	6,197	7,363	11,188	13,267
Net Profit (Rsm)	4,555	4,970	7,421	8,852
Core EPS (Rs)	118.0	128.8	192.3	229.3
Core EPS Growth	16.6%	9.1%	49.3%	19.3%
FD Core P/E (x)	3.48	3.19	2.14	1.79
DPS (Rs)	39.9	31.1	31.1	31.1
Dividend Yield	9.71%	7.57%	7.57%	7.57%
EV/EBITDA (x)	2.64	2.39	1.03	0.23
P/FCFE (x)	40.92	3.14	318.56	21.39
Net Gearing	1.3%	3.7%	(7.2%)	(18.1%)
P/BV (x)	0.37	0.32	0.27	0.23
ROE	11.3%	10.7%	13.6%	13.7%
% Change In Core EPS Estimates
InCred Research/Consensus EPS (x)

(Rs mn)	Mar-23A	Mar-24F	Mar-25F	Mar-26F
Total Net Revenues	24,672	21,036	29,442	34,914
Gross Profit	15,521	13,674	20,021	23,742
Operating EBITDA	6,197	7,363	11,188	13,267
Depreciation And Amortisation	(1,023)	(1,456)	(2,013)	(2,185)
Operating EBIT	5,174	5,907	9,175	11,083
Financial Income/(Expense)	(260)	(75)	(75)	(75)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	1,091	795	795	795
Profit Before Tax (pre-EI)	6,005	6,627	9,895	11,803
Exceptional Items
Pre-tax Profit	6,005	6,627	9,895	11,803
Taxation	(1,450)	(1,657)	(2,474)	(2,951)
Exceptional Income - post-tax
Profit After Tax	4,555	4,970	7,421	8,852
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	4,555	4,970	7,421	8,852
Recurring Net Profit	4,555	4,970	7,421	8,852
Fully Diluted Recurring Net Profit	4,555	4,970	7,421	8,852

(Rs mn)	Mar-23A	Mar-24F	Mar-25F	Mar-26F
EBITDA	6,197	7,363	11,188	13,267
Cash Flow from Invt. & Assoc.
Change In Working Capital	(3,899)	4,266	(3,734)	(2,931)
(Incr)/Decr in Total Provisions	(33)	(3)	(3)	(3)
Other Non-Cash (Income)/Expense	(193)	319	319	319
Other Operating Cashflow
Net Interest (Paid)/Received	(768)	(88)	(88)	(88)
Tax Paid	(1,480)	(1,657)	(2,474)	(2,951)
Cashflow From Operations	(177)	10,200	5,209	7,614
Capex	(4,797)	(200)	(200)	(200)
Disposals Of FAs/subsidiaries	9	9	9	9
Acq. Of Subsidiaries/investments	4,009	(442)	(442)	(2,156)
Other Investing Cashflow	568	(862)	(862)	(862)
Cash Flow From Investing	(211)	(1,496)	(1,496)	(3,210)
Debt Raised/(repaid)	775	(3,663)	(3,663)	(3,663)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid	(1,538)	(1,199)	(1,199)	(1,199)
Preferred Dividends
Other Financing Cashflow	(236)	(106)	(106)	(106)
Cash Flow From Financing	(1,000)	(4,969)	(4,969)	(4,969)
Total Cash Generated	(1,388)	3,736	(1,255)	(565)
Free Cashflow To Equity	387	5,041	50	741
Free Cashflow To Firm	(128)	8,780	3,788	4,479

(Rs mn)	Mar-23A	Mar-24F	Mar-25F	Mar-26F
Total Cash And Equivalents	6,904	5,622	11,684	20,139
Total Debtors	4,897	4,551	6,366	7,548
Inventories	14,401	9,778	9,778	9,778
Total Other Current Assets	2,323	7,879	8,376	8,376
Total Current Assets	28,525	27,830	36,205	45,841
Fixed Assets	13,482	18,202	25,163	27,308
Total Investments	7,428	7,431	7,431	7,431
Intangible Assets	3	1	1	1
Total Other Non-Current Assets	7,482	10,428	5,613	5,613
Total Non-current Assets	28,394	36,063	38,208	40,353
Short-term Debt	7,409	7,409	7,409	7,409
Current Portion of Long-Term Debt
Total Creditors	4,120	4,034	5,162	6,122
Other Current Liabilities	1,582	1,706	1,706	1,706
Total Current Liabilities	13,110	13,150	14,278	15,237
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities	51	45	45	45
Total Non-current Liabilities	51	45	45	45
Total Provisions	949	949	949	949
Total Liabilities	14,110	14,144	15,272	16,231
Shareholders Equity	42,809	49,749	59,140	69,962
Minority Interests
Total Equity	42,809	49,749	59,140	69,962

	Mar-23A	Mar-24F	Mar-25F	Mar-26F
Revenue Growth	12.1%	(14.7%)	40.0%	18.6%
Operating EBITDA Growth	17.5%	18.8%	52.0%	18.6%
Operating EBITDA Margin	25.1%	35.0%	38.0%	38.0%
Net Cash Per Share (Rs)	(14.41)	(47.45)	109.59	328.63
BVPS (Rs)	1,109.04	1,288.83	1,532.13	1,812.50
Gross Interest Cover	19.90	78.75	122.33	147.77
Effective Tax Rate	24.1%	25.0%	25.0%	25.0%
Net Dividend Payout Ratio	33.8%	24.1%	16.2%	13.5%
Accounts Receivables Days	79.76	81.85	67.58	72.65
Inventory Days	482.21	599.33	378.81	319.44
Accounts Payables Days	171.48	202.11	178.15	184.33
ROIC (%)	10.5%	9.8%	14.2%	16.3%
ROCE (%)	10.7%	10.8%	14.6%	15.2%
Return On Average Assets	8.7%	8.3%	10.8%	11.1%

(91) 22 4161 1562 satish.kumar@incredresearch.com

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Market Data

Source: Bloomberg