HEG (HEG) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw revenue of ₹571.46 crore, down from ₹671.43 crore year-over-year, with standalone net profit at ₹2.58 crore versus ₹97.56 crore last year; consolidated net profit was ₹23.04 crore, down from ₹139.12 crore.

• EBITDA margin dropped to 10% in Q1 FY25 from 21% in FY24 and 28% in FY23.

• Operational performance and capacity utilization remained strong, with 80% utilization in Q1 and expectations of 75% for the full year.

• Board approved a share split, appointment of new independent directors, and a major restructuring scheme, all pending regulatory and shareholder approvals.

• The company remains debt-free with a treasury of ₹917 crore as of June 30, 2024.

Financial highlights

• Standalone revenue from operations for Q1 FY25 was ₹571.5 crore, compared to ₹671.4 crore in Q1 FY24.

• Standalone EBITDA for Q1 FY25 was ₹59 crore, down from ₹170 crore in Q1 FY24.

• Standalone net profit after tax was ₹2.58 crore, down from ₹97.56 crore; consolidated net profit was ₹23.04 crore, down from ₹139.12 crore.

• One-time mark-to-market loss of ₹31 crore on treasury investment impacted results.

• EPS for Q1 FY25 was ₹0.67, compared to ₹25.28 in Q1 FY24.

Outlook and guidance

• Margins expected to remain under pressure in the next few quarters due to global steel and electrode market conditions.

• Demand recovery anticipated from 2025 onwards, with expanded capacity positioning the company to benefit.

• Long-term industry outlook remains positive, driven by global decarbonization and new electric arc furnace capacity announcements.

• No adjustments made for the proposed demerger and amalgamation scheme pending regulatory approvals.