HEG Limited Reports Strong Q2 FY26 Performance with 90% Capacity Utilization Amid Challenging Market

HEG Limited , a leading graphite electrode manufacturer, has reported robust financial results for the second quarter of fiscal year 2026, demonstrating resilience in the face of challenging market conditions. The company's performance highlights its operational efficiency and strategic positioning in the global graphite electrode industry.

Key Financial Highlights

HEG Limited achieved the following results in Q2 FY26:

Metric	Q2 FY26	YoY Change
Revenue	697.00	22.70%
EBITDA	226.00	61.40%
Net Profit	131.00	111.30%

The company's strong performance was primarily driven by higher sales volumes, while maintaining a high capacity utilization of 90% amid challenging graphite electrode market conditions.

Operational Performance and Market Dynamics

HEG Limited has demonstrated operational resilience by maintaining a high capacity utilization rate of over 90% in the first half of FY26. This is particularly noteworthy given the current subdued demand environment in the global steel industry. The company's ability to operate at such high levels showcases its competitive edge and operational efficiency.

Mr. Manish Gulati, Executive Director of HEG Limited, commented on the market conditions, stating, "The graphite electrode market continues to face challenging conditions. Customer demand remained muted due to cautious procurement and aggressive export pricing by Chinese suppliers, which intensified margin pressure for producers globally."

Despite these challenges, HEG Limited's single-location 100,000-ton production base, combined with India's structurally low-cost environment, positions the company as one of the most cost-efficient graphite electrode manufacturers globally.

Strategic Expansion and Future Outlook

HEG Limited has announced a capacity expansion of 15,000 tons with a capex of INR 650.00 crores, scheduled to be completed by the end of 2027. This expansion demonstrates the company's confidence in the medium to long-term growth trajectory of the industry, driven by the global transition towards low-emission electric arc furnace steelmaking.

The company remains debt-free with a healthy treasury size of INR 1,167.00 crores as of September 30, 2025, providing financial flexibility for future growth initiatives.

Industry Outlook and Challenges

While the current market conditions remain challenging, HEG Limited sees potential for improvement in the coming years. The global transition towards electric arc furnace steelmaking is expected to generate substantial incremental demand, estimated at approximately 200,000 tons of graphite electrodes by 2030, excluding China.

However, the company faces potential headwinds, including the recent imposition of a 50% reciprocal duty in the U.S. market. HEG Limited is hopeful that tariffs will settle to more reasonable levels in the coming times and emphasizes its well-diversified sales footprint across major global markets.

Conclusion

HEG Limited's strong Q2 FY26 performance, coupled with its strategic expansion plans and robust financial position, positions the company well to navigate current market challenges and capitalize on future growth opportunities in the graphite electrode industry. Investors should monitor global steel production trends and regulatory developments, as these factors may play a crucial role in shaping the company's future performance.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.95%	-1.60%	-0.24%	-3.35%	+22.25%	+263.11%

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

Particulars	Q2 FY25-26	Q1 FY25-26	Q2 FY24-25
Total Income	804.00	660.00	610.55
EBITDA	226.00	154.00	140.76
PAT	131.00	72.00	62.09
EPS (₹)	6.78	3.72	3.22

*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.