HEG Limited , a leading graphite electrode manufacturer, has received a significant reprieve as the tax authority has concluded its efforts to recover ₹2.82 billion from the company. This development, coupled with the company's announcement of a capacity expansion plan, marks a positive turn for HEG's operations and financial outlook.

Tax Recovery Effort Dropped

The Office of the Deputy Commissioner (SGST) Mandideep Circle, Bhopal Division-2 has dropped the show cause notice issued against HEG Limited for the tax period April 2018 to March 2019. The notice had initially proposed the recovery of allegedly erroneous IGST refunds along with penalties amounting to ₹282.34 crores.

In a disclosure to the stock exchanges, HEG stated, "The show cause notice earlier issued by Office of the Deputy Commissioner (SGST) Mandideep Circle, Bhopal Division-2 against the Company for the tax period April 2018 to March 2019, proposing for recovery of the erroneous IGST refunds along with penalty amounting to ₹282.34 Crores, have now been dropped by GST authority vide their letter dated July 30, 2025."

This resolution eliminates a significant financial uncertainty for the company and is expected to have a positive impact on investor sentiment.

Capacity Expansion Plans

In a separate announcement, HEG's Board of Directors has approved an expansion plan for its Graphite Electrodes and related products. The key details of the expansion are as follows:

The company cited two main reasons for this expansion:

1. Structural changes in the industry, boosting demand for electrodes
2. Healthy payback expectations

This capacity addition represents a 15% increase over the current capacity and is expected to strengthen HEG's market position in the graphite electrode industry.

Financial Performance

For the quarter ended June 30, 2025, HEG reported the following consolidated financial results:

• Revenue from operations: ₹616.93 crores
• Profit before tax: ₹127.46 crores
• Profit after tax: ₹104.83 crores

The company's performance shows a significant improvement compared to the same quarter in the previous year, reflecting a robust demand for its products.

Conclusion

The dropping of the tax recovery effort by the GST authority removes a major financial overhang for HEG Limited. Coupled with the announced capacity expansion plans, these developments position the company for potential growth in the coming years. Investors and industry observers will likely watch closely how these positive developments translate into HEG's future financial performance and market position in the graphite electrode sector.

HEG Limited , a leading graphite electrode manufacturer, has announced its unaudited financial results for the quarter ended June 30, 2025, along with a significant capacity expansion plan.

Financial Performance

For Q1 FY26, HEG reported the following standalone results:

On a consolidated basis, the company achieved:

Capacity Expansion Plan

The Board of Directors has approved a capacity expansion plan for graphite electrodes and related products. Key details include:

• Additional Capacity: 15,000 TPA
• Current Capacity: 100,000 TPA
• Total Investment: Approximately Rs. 650 crores
• Expected Completion Time: Within 30 months
• Financing: Through internal accruals and debt if required

Current Operations

• Capacity Utilization: 85% to 90%

Strategic Rationale

The expansion decision is driven by:

1. Structural changes in the industry boosting demand for electrodes
2. Healthy payback expectations

Conclusion

HEG Limited's Q1 FY26 results demonstrate solid performance, while the approved capacity expansion plan positions the company to capitalize on growing market demand. The significant investment in increasing production capacity reflects confidence in the long-term prospects of the graphite electrode market.

Investors and industry observers will likely monitor how this expansion impacts HEG's market position and financial performance in the coming years.