HEG (HEG) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 saw a sharp rebound in profitability, with consolidated net profit at ₹104.83 crore versus a loss in the previous quarter and profit of ₹23.04 crore in Q1 FY25.

• Revenue from operations increased to ₹616.93 crore, up from ₹542.25 crore sequentially and ₹571.46 crore year-over-year.

• EBITDA margin improved to 23% in Q1 FY26 from 17% in FY25, reflecting operational efficiency gains.

• The graphite electrode market remains challenging, but global EAF steelmaking trends are expected to drive long-term demand growth.

• Board approved a further capacity expansion to 115,000 tons, with ₹650 crore CapEx, targeting completion by Jan 2028.

Financial highlights

• Standalone revenue for Q1 FY26 was ₹612.78 crore, up from ₹536.58 crore in Q4 FY25 and ₹571.46 crore in Q1 FY25.

• Standalone net profit for Q1 FY26 was ₹71.80 crore, compared to a loss of ₹61.68 crore in Q4 FY25 and profit of ₹2.58 crore in Q1 FY25.

• Consolidated EBITDA for Q1 FY26 reached ₹154 crore, up from ₹59 crore in Q4 FY25 and ₹108 crore in Q1 FY25.

• EPS for Q1 FY26 stood at ₹3.72, up from ₹0.13 in Q1 FY25 and a loss of ₹3.20 in Q4 FY25.

• The company remains long-term debt-free with investments and cash equivalents of ₹977 crore as of June 30, 2025.

Outlook and guidance

• Expansion to 115,000 tons is underway, with commissioning expected by Jan 2028 and a CapEx of ₹650 crore.

• EAF-led demand is expected to add 150,000-200,000 tons of annual graphite electrode demand by 2030 (ex-China).

• Market stabilization and pricing recovery are anticipated as supply rationalization and new EAF capacity come online.

• Capacity utilization is expected to be around 85% for the coming quarters.

• Price firming is expected once industry utilization exceeds 80-85%, possibly in two to three quarters.