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Sustained pricing pressure from Chinese exports
View Risks →HEG Limited — Q3 FY26
HEG delivered a strong Q3 FY26 with revenue of ₹656 crore, up 38% YoY, driven by record capacity utilization of 89% over the last three quarters and market share gains globally.
bullish
high
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HEG delivered a strong Q3 FY26 with revenue of ₹656 crore, up 38% YoY, driven by record capacity utilization of 89% over the last three quarters and market share gains globally. The company's cost advantage from its single-location 100,000-ton plant in India and operational efficiency enabled resilient margins despite muted graphite electrode pricing. Management reiterated that 20 million tons of new EAF capacity added in 2024-25 and another 30 million tons expected by 2028 will drive incremental electrode demand of 200,000 tons by 2030. The 15,000-ton expansion is on track for early 2028. Key risk: sustained pricing pressure from Chinese exports and tariff impacts in the US could cap near-term profitability.
HEG ने वित्त वर्ष 2026 की तीसरी तिमाही में शानदार प्रदर्शन किया। कंपनी की कमाई ₹656 करोड़ रही, जो पिछले साल की समान तिमाही से 38% ज्यादा है। इसकी वजह है पिछले तीन तिमाहियों में 89% की रिकॉर्ड क्षमता उपयोग और दुनिया भर में बाजार हिस्सेदारी बढ़ना। भारत में एक ही जगह पर 100,000 टन का कारखाना होने से लागत कम रहती है, जिससे मुनाफा बना रहता है, भले ही ग्रेफाइट इलेक्ट्रोड की कीमतें कम हों। कंपनी का कहना है कि 2024-25 में 20 मिलियन टन और 2028 तक 30 मिलियन टन नई EAF क्षमता जुड़ने से 2030 तक इलेक्ट्रोड की मांग 200,000 टन बढ़ेगी। 15,000 टन का विस्तार 2028 की शुरुआत में तैयार हो जाएगा। मुख्य जोखिम: चीन से सस्ते निर्यात और अमेरिकी टैरिफ से कीमतों पर दबाव बना रह सकता है।
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Read Transcript →Quarter Snapshot
Capacity Utilization (9M FY26)
89%
+4pp YoY
Highest in the global graphite electrode industry, reflecting strong operational performance.
Global Steel Production Decline (CY2025)
1,804M tons
-2% YoY
Global steel output fell to 1,804 million tons from 1,841 million tons in 2024.
China Steel Exports (CY2025)
119M tons
+78% over 6 years
Chinese steel exports surged from 67 million tons, intensifying global competitive pressure.
New EAF Capacity Additions (2024-2025)
20M tons
N/A
Greenfield electric arc furnace capacity added, driving incremental electrode demand.
What Changed vs Last Quarter
NEW
50-60% of next year's volumes already contracted at similar pricing
Annual contracts for 2026 largely settled; realizations expected to remain similar to recent quarters.
UPDATED
15,000-ton capacity expansion on track for early 2028
Construction progressing as per schedule; long-lead items ordered; target completion by early 2028.
UPDATED
NCLT scheme approval expected by Q1 2027
Composite scheme of arrangement on track; first motion order received; shareholder meetings to follow.
DROPPED
Green tech revenue to double in FY27 vs FY26
Revenue from green tech businesses (anode, BESS, IPP) expected to double in FY27 as projects become operational.
NEW RISK
US tariff impact on profitability
18% duty on Indian electrode exports to US remains a drag; management acknowledged it will hit bottom line but is manageable.
NEW RISK
Graphite India's financial distress may not lead to capacity closure
Analyst raised concern about Graphite India's losses; management downplayed closure risk but did not provide concrete assurance.
RISK GONE
US reciprocal tariffs impact competitiveness
50% reciprocal duties on Indian graphite electrodes could erode margins; management hopes tariffs will settle but no certainty.
RISK GONE
Demand recovery slower than expected
Global steel production remains weak; management noted Q3 demand is not improving and Q4 order book is still being built.
RISK GONE
Needle coke supply constraints for expansion
Analyst raised concern about needle coke availability for industry capacity additions; management downplayed but acknowledged potential temporary tightness.
Fast read
Guidance and risk preview
Construction progressing as per schedule; long-lead items ordered; target completion by early 2028.
Chinese steel exports rose 78% over six years, intensifying competition and keeping electrode prices low.
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