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.

HEG Limited , a prominent player in the graphite electrode industry, has announced a significant development for its wholly-owned subsidiary, TACC Limited. The State Bank of India (SBI) has sanctioned a substantial credit facility of Rs. 1,230 crores to TACC, marking a major step forward in the company's expansion plans.

Project Details

The credit facility is earmarked for a specific purpose:

This financial backing from SBI is designed to provide partial funding for the development of the new manufacturing facility. The project represents a strategic move by HEG to diversify its portfolio and tap into the growing market for lithium-ion battery components.

Strategic Implications

The decision to venture into lithium-ion battery grade graphite anode production is significant for several reasons:

1. Market Expansion: By entering the lithium-ion battery supply chain, HEG is positioning itself to capitalize on the growing electric vehicle and energy storage markets.

2. Vertical Integration: This move could potentially allow HEG to leverage its expertise in graphite-based products, extending its value chain into high-growth sectors.

3. Domestic Manufacturing: The project aligns with India's push for domestic manufacturing in critical technology sectors, potentially benefiting from supportive government policies.

Financial Disclosure

HEG Limited made this disclosure in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has stated that this information will be available on both HEG Limited's website ( www.hegltd.com ) and TACC Limited's website ( www.tacclimited.com ).

While the credit facility of Rs. 1,230 crores is substantial, it's important to note that this represents only a part of the total funding required for the project. The full scale of investment and additional funding sources, if any, have not been disclosed in the current announcement.

As the project progresses, investors and industry observers will likely keep a close watch on its development timeline, potential impact on HEG's financial performance, and its implications for the broader lithium-ion battery supply chain in India.