HEG Limited reported a standalone net profit of ₹109.50 crore for the quarter ended June 30, 2026, marking a 52.5% year-on-year increase from ₹71.80 crore in Q1FY26. This performance signals a decisive return to profitability after a net loss of ₹163.19 crore in the preceding quarter ended March 31, 2026. The surge was primarily driven by robust demand in the Graphite Electrode segment, benefiting from resilient global steel production outside China and improved pricing power. On a consolidated basis, profit after tax from continuing operations rose 22.6% year-on-year to ₹122.34 crore.

The Board of Directors approved the unaudited financial results at its meeting held on July 22, 2026. The results were subjected to limited review by the company’s statutory auditors, M/s SCV & Co. LLP, Chartered Accountants, in accordance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In a strategic development, the Board noted that the Ministry of Corporate Affairs (MCA) has reserved the name "HEG Advanced Materials Limited" for 60 days. This proposed rebranding aims to align with the company’s core strengths in advanced manufacturing, moving away from the broader "Greentech" label.

Standalone Financial Performance

HEG’s standalone results showed broad-based improvement across key metrics. Revenue from operations stood at ₹680.91 crore, up 11.1% from ₹612.78 crore in the same quarter last year. Profit before tax rose 64.2% year-on-year to ₹151.79 crore. EBITDA expanded significantly to ₹161.00 crore from ₹106.00 crore, with margins widening to 23.72% from 17.30%. Basic and diluted earnings per share were ₹5.67 for the June 2026 quarter, compared with ₹3.72 a year earlier.

Consolidated Results and Segment Insights

On a consolidated basis, comprising HEG Limited, its wholly owned subsidiaries TACC Limited, HEG Graphite Limited and Bhilwara Infotechnology Limited, and its share of profit from associate Bhilwara Energy Limited, revenue from continuing operations was ₹680.79 crore in Q1FY27, up 11.1% year-on-year. Consolidated profit before tax, including the company’s ₹30.50 crore share of profit from associates, rose 36.1% to ₹165.08 crore. Consolidated basic earnings per share from continuing operations rose to ₹6.34 in the June 2026 quarter from ₹5.17 a year earlier.

The graphite electrode segment remained the primary revenue driver. Standalone graphite segment revenue was ₹677.77 crore for Q1 FY27, up 11.3%, while segment results more than doubled to ₹149.64 crore. The power segment, comprising the hydro power plant at Tawa Nagar, contributed segment revenue of ₹3.14 crore; this segment is seasonal, with generation intermittent in the first quarter.

Strategic Restructuring and Capacity Expansion

The Composite Scheme of Arrangement amongst HEG Limited, HEG Graphite Limited (the Resulting Company) and Bhilwara Energy Limited (the Transferor Company) is awaiting final approval. Under the Scheme, the graphite business is to be demerged from HEG Limited into HEG Graphite Limited, while Bhilwara Energy Limited is to be amalgamated with HEG Limited. The Appointed Date for the Scheme is April 1, 2024.

Following shareholder and creditor approvals on May 5, 2026, and requisite no-objection letters from BSE Limited and the National Stock Exchange of India received on January 8 and 9, 2026, the Scheme was filed with the National Company Law Tribunal (NCLT), Indore Bench, on January 24, 2026. Pursuant to the NCLT's order dated March 26, 2026, meetings were convened on May 5, 2026. Following a hearing on July 2, 2026, the NCLT has reserved its order in the matter. Pending receipt of the final order, no adjustments in respect of the Scheme have been made to the unaudited financial results.

Beyond restructuring, HEG is reinforcing its market leadership through capacity expansion. The company is expanding its graphite electrode capacity by 15,000 tonnes, taking total capacity from 100,000 tonnes to 115,000 tonnes by 2028. This brownfield expansion positions HEG to benefit from structural growth in Electric Arc Furnace (EAF) steelmaking.

What the Numbers Show

The sharp turnaround in profitability is primarily operational, driven by higher volumes and pricing power in the graphite electrode business. The expansion in EBITDA margin from 17.30% to 23.72% indicates improved cost efficiency and favorable product mix. While other income saw volatility due to mark-to-market adjustments on investments (including an ₹8.15 crore gain in Q1FY27 vs. ₹31.02 crore in Q1FY26), the core operating profit growth underscores the strength of the primary business line. Standalone total assets stood at ₹5,784.28 crore as at June 30, 2026, against total liabilities of ₹1,371.62 crore, reflecting a stable balance sheet position.

The U.S. Department of Commerce has preliminarily determined that HEG likely received unfair subsidies, triggering the imposition of a preliminary countervailing duty rate of 6.99%. The ruling marks a significant development in an ongoing trade investigation involving the Indian graphite electrode manufacturer.

Preliminary Duty Rate and Investigation Details

The U.S. Department of Commerce's preliminary finding sets a countervailing duty rate of 6.99% on HEG, reflecting the agency's assessment that the company likely benefited from government subsidies that could distort fair trade conditions. Countervailing duties are typically imposed to offset the competitive advantage that subsidized foreign producers may gain in the U.S. market.

Key details of the preliminary determination are outlined below:

Final Decision Timeline

The preliminary ruling is not the final word on the matter. The U.S. Department of Commerce has set December 8, 2026 as the date by which a final decision is expected to be issued. Until then, the preliminary duty rate of 6.99% represents the agency's current assessment based on available evidence. The final determination may result in a revision of the duty rate, either upward or downward, depending on the outcome of the complete investigation.

Implications for HEG

The imposition of a preliminary countervailing duty rate could affect HEG's competitiveness in the U.S. market, one of the key export destinations for graphite electrodes. Countervailing duty proceedings can have material implications for affected companies, influencing pricing strategies and trade flows. The outcome of the final determination on December 8, 2026 will be closely watched by market participants and industry stakeholders.