Some investors were surprised when HEG shares began at Rs 511 apiece on Friday, down 80.12% from their previous closing of Rs 2,570.80 apiece. The graphite electrode player's stock was divided from shares with a face value of Rs 10 apiece to shares with a face value of Rs 2, which caused the share price to drop. 

In an attempt to improve counter-liquidity, previously owned shares are divided into shares with lower face values. 

It's conceivable that certain brokerages' trading applications are displaying the unadjusted price for HEG, implying an 80 percent or more decline in value. After accounting for the stock split, HEG shares were down 3.53 percent at Rs 496 on the BSE.

One of the biggest integrated graphite electrode facilities in the world, HEG is a top producer of graphite electrodes that processes UHP (Ultra High Power) electrodes. More than 70% of the company's output is exported to more than 30 nations worldwide.

In August, Jefferies recommended purchasing the shares. According to Jefferies, HEG recently increased its installed electrode capacity by 20,000 mt, which was put into service in November 2023. It currently has a capacity of 100,000 mt. Jefferies appreciates HEG's strong balance sheet, which is characterized by a large cash balance, investments, including treasury size, and little debt.

Jefferies values HEG's shares at a 7-fold EV/Ebitda multiple, which is somewhat less than the stock's historical 10-year average multiple. 

Jefferies' base case for HEG estimated that the average selling price of graphite electrodes would be $4,900 per metric tonne in FY25, $5,500 per metric tonne in FY26, and $5,500 per metric tonne in FY27. It was predicated on the average needle coke price of $2,000 per mt for FY25–27. "We expect op-margin to bottom out at 14.4 percent in FY25 and expand to 34.6 percent over FY25-27," it stated.