HEG (HEG) Q2 25/26 earnings summary

Executive summary

• Q2 FY2026 saw higher revenues and profits, driven by increased sales volumes and 90%+ capacity utilization, with prices remaining flat sequentially.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2025, were approved and reviewed without qualification by auditors.

• The company maintains a diversified global sales footprint, exporting 65–70% of production to about 35 countries, with U.S. and Europe accounting for about 10-12% and less than 10% of volumes, respectively.

• Ongoing demerger process is expected to receive NCLT approval by April 2026, with pending approvals for a composite scheme of arrangement involving demerger and amalgamation.

• Board approved subscription to INR 633 crore of optionally convertible debentures in TACC Limited, a wholly owned subsidiary, for business expansion and R&D.

Financial highlights

• Q2 FY2026 consolidated revenue from operations was ₹699.2 crore, up from ₹567.6 crore in Q2 FY25; standalone revenue for H1 FY26 was ₹1,309.63 crore.

• Standalone net profit after tax for Q2 FY26 was ₹130.9 crore, compared to ₹62.1 crore in Q2 FY25; consolidated net profit for H1 FY26 was ₹248.16 crore.

• EBITDA for Q2 FY26 was ₹226 crore, up from ₹140 crore in Q2 FY25; standalone EBITDA for H1 FY26 was ₹362.05 crore.

• Standalone EPS for H1 FY26 was ₹10.50; consolidated EPS was ₹12.86.

• Mark-to-market gains on investments, especially in Graftech International Limited, contributed significantly to other income.

Outlook and guidance

• Expectation of continued high utilization (close to 90%) for the remainder of FY2026, with no margin improvement anticipated in Q3.

• Medium to long-term outlook remains bullish due to anticipated demand from new EAF capacity and steel production upturn outside China.

• Board remains confident regarding IGST refund show cause notices, expecting no material impact.

• Expansion of 15,000 tons capacity (INR 650 crore CapEx) to be completed by end of 2027, ready for production in Q1 2028.

• Greentech business expects EBITDA to double in FY2027 as new projects come online.