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View Promises →HEG Limited — Q4 FY26
HEG reported Q4 FY26 revenue of ₹569 crore with EBITDA margin of 19%, up 200bps YoY, driven by 20% volume growth and cost control.
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HEG reported Q4 FY26 revenue of ₹569 crore with EBITDA margin of 19%, up 200bps YoY, driven by 20% volume growth and cost control. However, a reported net loss of ₹189 crore was due to unrealized forex and investment losses. The company maintained >90% capacity utilization at its expanded 100,000-ton plant. Management highlighted structural tailwinds from electric arc furnace (EAF) expansion globally, with ~100 million tons of new EAF capacity expected by 2030, driving incremental electrode demand of ~200,000 tons. HEG's expansion to 115,000 tons is on track for early 2028. Near-term headwinds include Middle East disruptions impacting sales mix and freight costs, and potential US anti-dumping duties. Guidance suggests EBITDA margins may dip to ~17-18% in H1 FY27 before recovering, with price hikes expected to offset cost inflation from H2.
HEG ने चौथी तिमाही में 569 करोड़ रुपये की कमाई की। कंपनी का मुनाफा मार्जिन 19% रहा, जो पिछले साल से 2% ज्यादा है। इसकी वजह 20% ज्यादा बिक्री और खर्चों पर काबू है। लेकिन कंपनी को 189 करोड़ का नुकसान हुआ, क्योंकि विदेशी मुद्रा और निवेश में घाटा हुआ। कंपनी का कारखाना 90% से ज्यादा क्षमता से चल रहा है। दुनिया भर में बिजली से चलने वाली भट्टियों का विस्तार हो रहा है, जिससे 2030 तक ग्रेफाइट इलेक्ट्रोड की मांग 2 लाख टन बढ़ेगी। HEG अपनी क्षमता 1,15,000 टन कर रही है। फिलहाल मिडिल ईस्ट में गड़बड़ी से बिक्री और ढुलाई खर्च प्रभावित हो रहा है। अगले साल की पहली छमाही में मार्जिन 17-18% रह सकता है, फिर कीमतें बढ़ने से सुधार होगा।
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Middle East disruption impact on sales and freight
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Sales Volume Growth
20%
+20% YoY
Full-year sales volume increased 20% YoY, reflecting strong demand and high utilization.
Capacity Utilization
>90%
Flat YoY
Capacity utilization remained above 90% for the full year, among the highest globally.
Global EAF Capacity Additions (ex-China)
100M tons
New
Management expects ~100 million tons of new EAF capacity by 2030, driving electrode demand.
Incremental Electrode Demand (ex-China by 2030)
200,000 tons
New
New EAF capacity is expected to create incremental electrode demand of ~200,000 tons by 2030.
What Changed vs Last Quarter
NEW
EBITDA margin guidance for FY27
Management guided EBITDA margin of ~17-18% for H1 FY27, improving to >20% for the full year as price hikes take effect.
NEW
Price hikes for uncommitted volumes
HEG is offering increased prices for uncommitted volumes from H2 FY27, aiming to offset cost inflation from energy and freight.
NEW
Capacity expansion to 115,000 tons
The expansion from 100,000 to 115,000 tons is progressing as planned, with completion targeted by early 2028.
NEW
Graphtech scheme of arrangement timeline
The composite scheme of arrangement for Graphtech is expected to receive NCLT approval in Q2 FY27, subject to shareholder and creditor approvals.
DROPPED
15,000-ton capacity expansion on track for early 2028
Construction progressing as per schedule; long-lead items ordered; target completion by early 2028.
DROPPED
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.
DROPPED
NCLT scheme approval expected by Q1 2027
Composite scheme of arrangement on track; first motion order received; shareholder meetings to follow.
NEW RISK
Middle East disruption impact on sales and freight
The Middle East crisis has forced postponement of ~20% of sales (MENA region) and increased freight costs, impacting Q4 margins and near-term volume.
NEW RISK
US anti-dumping investigation
The US is considering countervailing/anti-dumping duties on Indian graphite electrode imports, with an outcome expected by September. HEG has engaged legal counsel but outcome is uncertain.
NEW RISK
Needle coke price inflation
Rising crude oil prices may increase needle coke costs from H2 FY27, as current contracts cover only until September. Management has not yet negotiated next quarter's prices.
NEW RISK
Unrealized investment losses on Graphtech stake
The company reported a ₹189 crore net loss due to unrealized losses on its Graphtech investment and forex. Further rupee depreciation could lead to additional mark-to-market losses.
RISK GONE
Sustained pricing pressure from Chinese exports
Chinese steel exports rose 78% over six years, intensifying competition and keeping electrode prices low.
RISK GONE
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.
RISK GONE
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.
🤫 Topics management stopped discussing
Mentioned in Q2 FY26, Q3 FY26
Composite scheme of arrangement on track; first motion order received; shareholder meetings to follow.
Mentioned in Q2 FY26, Q3 FY26
Chinese steel exports rose 78% over six years, intensifying competition and keeping electrode prices low.
Fast read
Guidance and risk preview
Management guided EBITDA margin of ~17-18% for H1 FY27, improving to >20% for the full year as price hikes take effect.
The Middle East crisis has forced postponement of ~20% of sales (MENA region) and increased freight costs, impacting Q4 margins and near-term volume.
View Risks →