HEG Ltd Surges Nearly 8% After Posting ₹104.83 Cr Q1 Profit, Clearing ₹282 Cr GST Demand, and Approving ₹650 Cr Expansion

Mumbai, 31 July 2025: Shares of HEG Ltd (NSE: HEG) climbed 7.93% to ₹576.60 in early Wednesday trade after the company reported a remarkable turnaround in its Q1 FY26 performance. The stock rally was driven by a solid earnings rebound, favourable regulatory development, and an ambitious graphite electrode expansion plan worth ₹650 crore. The announcement came after market hours on 30 July 2025, significantly boosting investor sentiment.

HEG Ltd Share Price Rallies to ₹576.60 as Trading Volume Crosses 31 Lakh Shares on Q1 Optimism

By 9:26 AM IST, HEG shares were trading at ₹576.60, up 7.93%, following strong earnings and expansion news. The trading volume reached 31.72 lakh shares, with a turnover of ₹180.80 crore. The company’s market capitalisation stood at ₹11,127.08 crore, while the 52-week high and low ranged between ₹619.50 and ₹331.25, respectively. The VWAP (volume-weighted average price) was ₹569.89, and the P/E ratio (TTM) stood at 56.16. HEG remains a constituent of the NIFTY Smallcap 250, drawing continued attention from midcap investors.

HEG Ltd Q1 FY26 Profit at ₹104.83 Cr Marks a Sharp Turnaround from Loss in Previous Quarter

In Q1 FY26, HEG Ltd posted a net profit of ₹104.83 crore, a significant recovery from the ₹73.67 crore loss recorded in Q4 FY25. Total income rose to ₹683.85 crore, up 15.54% quarter-on-quarter and 15.5% year-on-year. Revenue from operations increased to ₹616.93 crore, a rise of 13.78% sequentially and 7.96% annually.

Operational performance also strengthened, with EBITDA (estimated) climbing to ₹181.13 crore, nearly doubling both QoQ (+99.4%) and YoY (+98.3%). Profit before tax came in at ₹127.46 crore, a turnaround from a loss of ₹84.60 crore. Diluted earnings per share for the quarter stood at ₹5.43, compared to a loss per share of ₹3.82 in the previous quarter.

₹282.34 Cr GST Demand Withdrawn by SGST Bhopal, Removing Regulatory Overhang for HEG Ltd

In a major regulatory relief, HEG Ltd announced that the ₹282.34 crore GST show cause notice related to alleged wrongful IGST refund claims for FY 2018–19 has been officially dropped. The withdrawal came from the Deputy Commissioner (SGST), Bhopal Division-2 on 30 July 2025. The company confirmed there would be no financial or operational impact from the case, clearing a longstanding concern and reinforcing investor confidence in HEG’s compliance track record.

₹650 Cr Graphite Electrode Expansion Plan Cleared to Add 15,000 TPA Over 30 Months

The Board of HEG Ltd approved a ₹650 crore investment to increase graphite electrode capacity by 15,000 TPA, taking total capacity to 115,000 TPA. The project is expected to be completed in 30 months and will be funded through internal accruals and debt. The expansion aims to tap into the ongoing graphite industry upcycle, with expectations of a high RoCE. This move is aligned with the company’s forward-looking growth strategy to meet future global demand in the steel industry.

Graphite Segment Leads Q1 Performance With ₹609 Cr Revenue and ₹67.65 Cr Profit

During Q1 FY26, the graphite segment remained HEG Ltd’s core revenue generator, contributing ₹609 crore to the topline and ₹67.65 crore in segment profit. The power segment added ₹3.78 crore in revenue and ₹1.56 crore in profit, while ‘others’ brought in ₹4.15 crore in revenue and ₹12.19 crore in profit. The company’s total segment profit stood at ₹81.40 crore, reflecting broad-based operational strength across verticals.

HEG Maintains Strong Balance Sheet With ₹5,765 Cr in Assets and ₹4,558 Cr Net Worth as of June 2025

As of 30 June 2025, HEG Ltd reported total assets of ₹5,765.33 crore and total liabilities of ₹1,206.80 crore, resulting in a healthy net worth of ₹4,558.53 crore. The company’s strong balance sheet offers both stability and flexibility to support its expansion ambitions and absorb potential market volatility.

HEG Ltd Financial Metrics Show Strong Market Cap and P/E, But Revenue Growth and Profit Margins Below Industry Median

HEG Ltd’s market capitalisation stands at ₹11,373.1 crore, with a P/E ratio (TTM) of 57.8, both above industry medians. However, the PEG ratio (TTM) is notably high at 90.9, suggesting current valuations may be pricing in aggressive growth assumptions.

While institutional holding has slightly increased to 18.89%, the company’s operating revenue growth TTM is in the negative at -3.9%, and quarterly revenue growth YoY is only 8%, which is below industry averages.

Despite a 355% YoY surge in quarterly net profit, the TTM profit growth is a modest 0.6%. Operating profit margins for the quarter and TTM are 17.1% and 10.3%, respectively, both underperforming peers. Return ratios remain on the lower side, with ROE at 2.6% and RoA at 2%.

Management Confirms Expansion Future-Proofs the Company as GST Relief Highlights Regulatory Stability

Ravi Jhunjhunwala, Chairman and Managing Director of HEG Ltd, stated that the Q1 performance underscores the company’s “strong fundamentals and operational resilience.” He affirmed that the graphite capacity expansion will future-proof HEG Ltd for the next growth cycle, while the GST clearance further validates its regulatory compliance standards.

Corporate Restructuring, Share Split, and Associate Earnings Enhance Strategic Flexibility

HEG Ltd is actively pursuing a composite scheme of arrangement involving the demerger of its graphite business and a merger with Bhilwara Energy Ltd, aligning with its broader restructuring strategy. Earnings per share (EPS) for all prior periods have been restated post-October 2024 share split, which reduced face value from ₹10 to ₹2. Associate companies, Bhilwara Energy and Texnere India, together contributed ₹16.34 crore to Q1 profits, adding to the consolidated bottom line.

HEG Ltd: India’s Leading Graphite Electrode Maker with Global Steel Industry Clients

HEG Ltd, part of the LNJ Bhilwara Group, is India’s largest manufacturer and exporter of graphite electrodes and one of the leading players globally. The company operates one of the world’s largest single-site graphite electrode plants located in Madhya Pradesh. It caters to prominent steel producers across multiple international markets. HEG Ltd is listed on both NSE and BSE and is a constituent of the NIFTY Smallcap 250. Known for product quality, innovation, and environmental stewardship, HEG continues to play a critical role in supporting the global steel sector’s graphite needs.

REF:https://nsearchives.nseindia.com/corporate/HEG_30072025172241_OutcomeBoardMeeting30072025.pdf

https://nsearchives.nseindia.com/corporate/HEG_30072025175141_Stxintimation300725GSTSigned.pdf

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