HEG Advanced Materials (HEGAM) Q4 21/22 earnings summary

Executive summary

• FY22 delivered record graphite electrode production and sales, with strong demand and improved realizations driving a sharp recovery in profitability.

• A 20,000-TPA brownfield expansion was nearing completion; additional production was targeted for early 2023, positioning capacity to serve expected EAF-led demand growth.

Financial highlights

• Consolidated total income was ₹2,281 crore versus ₹1,369 crore; audited revenue from operations was ₹2,202 crore versus ₹1,256 crore.

• EBITDA reached ₹607 crore versus ₹54 crore in FY21; EBITDA margin was 27%.

• Consolidated PAT was ₹431 crore versus a loss of ₹18 crore; standalone PAT was ₹391 crore versus a loss of ₹25 crore.

• FY22 EPS was ₹111.68 consolidated and ₹101.20 standalone, versus losses per share of ₹4.65 and ₹6.56, respectively, in FY21.

Outlook and guidance

• The 20,000-TPA expansion was expected to complete construction by Dec 2022, with trials and stabilization before additional production began in Q1 2023.

• Management expected demand for graphite electrodes to rise over the medium term as steelmakers shift toward EAFs; new US and European EAF capacity announcements totalled 25–30 million mt.

• Domestic steel demand was forecast to grow 7–8% in FY23, supported by infrastructure spending; domestic steelmakers had announced 34 MTPA of capacity additions by FY26.