HEG Limited reported increased revenue for Q2 FY26, driven by higher sales volumes, although the graphite electrode market remains challenging due to muted customer demand and aggressive pricing from Chinese suppliers. The company’s revenue from operations stood at INR697 crores, up from INR568 crores in the corresponding quarter of the previous year, with an EBITDA of INR226 crores compared to INR140 crores. HEG anticipates gradual market stabilization with the increasing adoption of electric arc furnace steelmaking.
Financial Performance
For the quarter ended September 30, 2025, HEG Limited posted a revenue from operations of INR697 crores, compared to INR568 crores during the same quarter last year. The company’s EBITDA for the quarter was INR226 crores versus INR140 crores in the prior year’s equivalent quarter.
On a standalone basis, HEG recorded a net profit after tax of INR131 crores in Q2 FY26, an increase from INR62 crores in the corresponding quarter of the previous year. On a consolidated basis, net profit after tax was INR105 crores in Q2 FY26, compared to INR82 crores in the corresponding period last year. The company had a debt-free status and treasury holdings around INR1,167 crores as of September 30, 2025.
Market Dynamics and Outlook
The graphite electrode market continues to face demanding conditions. Customer demand remained muted, and aggressive export pricing by Chinese suppliers intensified margin pressures globally. HEG operates at high utilization levels, exceeding 90% in the last two quarters. The company anticipates steel production to increase and new electric arc furnace capacities to come online in the near future. A further expansion of 15,000 tons has been announced, targeted for completion by the end of 2027, with production expected to start in Q1 2028.
Strategic Initiatives and Expansion
HEG Greentech, after the demerger, will include four businesses: anode material manufacturing, existing Hydro Power assets (278 MW capacity), BESS EPC business (expanding to 6GWh by Q1 FY27), and IPP (BESS plus Solar), with the first 200 MWh project expected to be operational by Q2 FY27.
CBAM and Tariffs
The implementation of CBAM (Carbon Border Adjustment Mechanism) is anticipated to potentially benefit the steel industry in the EU. The company is also monitoring the potential impact of reciprocal tariffs in the U.S. and hopes for a resolution to more reasonable levels. The U.S. market accounts for only 10% to 12% of HEG’s sales, which are diversified across 35 countries.
Industry Trends
Global crude steel production saw a decline of 1.5% year-on-year in the first nine months of 2025. India, however, remained a standout performer with a 10.5% year-on-year increase. China’s crude steel output declined by 2.6% year-on-year, but finished steel exports surged by 9.2%.
Source: BSE
