HEG Limited , a leading graphite electrode manufacturer, has expressed confidence in receiving exchange approval for its demerger proposal, which will subsequently be submitted to the National Company Law Tribunal (NCLT). The company expects to secure NCLT approval by April 2026, marking a significant step in its corporate restructuring plans.

Financial Performance

HEG Limited has reported robust financial results for the second quarter of the fiscal year 2025-26:

• Revenue Growth: The company's revenue from operations increased to ₹696.85 crore in Q2 FY25-26, up from ₹612.78 crore in the previous quarter and ₹567.60 crore in the same quarter last year.

• Profit Surge: Net profit for Q2 FY25-26 stood at ₹130.86 crore, showing a substantial increase from ₹71.80 crore in Q1 FY25-26 and ₹62.09 crore in Q2 FY24-25.

• Improved Margins: The EBITDA margin for Q2 FY25-26 was 28%, up from 23% in the previous quarter, indicating enhanced operational efficiency.

Key Financial Metrics

*Figures in ₹ crore, except EPS

Market Position and Outlook

HEG Limited maintains its position as one of the largest single-site graphite electrode plants globally, with a capacity of 100,000 tons per annum. The company has announced plans to expand its capacity to 115,000 tons by the end of 2027, reinforcing its commitment to growth and market leadership.

Despite challenging global market conditions, including a 1.5% year-on-year decline in global crude steel production for the first nine months of 2025, HEG Limited has demonstrated resilience. The company's strategic focus on the long-term expansion of Electric Arc Furnace (EAF) steelmaking, particularly in markets outside China, positions it well for sustained growth in graphite electrode demand through 2030 and beyond.

Conclusion

As HEG Limited progresses with its demerger plans and continues to deliver strong financial performance, the company appears well-positioned to navigate the evolving dynamics of the global steel and graphite electrode markets. Investors and industry observers will be keenly watching the developments in the coming months, particularly the anticipated NCLT approval for the demerger in April 2026.

HEG Limited , a leading graphite electrode manufacturer, has reported a substantial increase in its financial performance for the second quarter.

Profit Soars

The company's net profit for the quarter jumped 72.7% to ₹143.00 crore, compared to ₹82.80 crore in the same period last year. This significant growth in profitability underscores HEG's strong market position and operational efficiency.

Revenue Growth

HEG's revenue also saw a notable increase, rising to ₹699.20 crore from ₹567.60 crore year-over-year, marking a 23.2% growth. This uptick in revenue indicates robust demand for the company's products and services.

EBITDA Performance

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rose to ₹118.40 crore from ₹96.30 crore in the previous year, representing a 23.0% increase. This improvement in EBITDA suggests enhanced operational efficiency and cost management.

Stable Operating Margin

Despite the significant growth in revenue and profit, HEG managed to maintain a stable operating margin. The operating margin for the quarter remained flat at 17%, indicating consistent operational performance amid growth.

Financial Highlights

All financial figures are in crore rupees, except for percentages

Corporate Developments

• The board approved subscription to optionally convertible debentures of subsidiary TACC Limited for up to ₹633.00 crore.
• The company noted the proposed sale of a 26% stake in Texnere India Private Limited.
• Puneet Anand was appointed as President and Group Chief Strategy Officer.

Regulatory Matters

HEG received show-cause notices from GST authorities regarding IGST refunds for FY 2019-20 and FY 2020-21, with proposed penalties of ₹282.34 crore for each period. The company expressed confidence that the refunds are in order and expects the notices to be dropped.

Market Performance

HEG's shares closed at ₹519.65, down 5.39%.

The company's impressive financial results reflect its strong market position in the graphite electrode industry and its ability to capitalize on favorable market conditions. HEG's substantial profit growth, coupled with revenue expansion and stable margins, positions it well for continued success.

Investors and industry observers will likely keep a close watch on HEG's performance in the future, particularly in light of its ability to maintain profitability and operational efficiency during a period of significant growth, as well as its response to the regulatory challenges posed by the GST notices.