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 consolidated revenue at ₹699.2 crore and PAT at ₹143.3 crore.

• 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 well-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 treasury allocation between TSEC and graphite business.

• 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 revenue from operations was INR 697 crores, up from INR 568 crores in Q2 FY2025; consolidated revenue for H1 FY26 was ₹1,316.15 crore.

• Standalone net profit after tax was INR 131 crores in Q2 FY2026, compared to INR 62 crores in the prior year quarter; consolidated net profit for H1 FY26 was ₹248.16 crore.

• Standalone EBITDA for Q2 FY26 was INR 226 crores, with margin at 28%; consolidated EBITDA for H1 FY26 was ₹385.89 crore.

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

• The company is long-term debt-free with a treasury size of INR 1,167 crores as of September 30, 2025.

Outlook and guidance

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

• Long-term strategy focuses on EAF steelmaking expansion, supporting sustained graphite electrode demand through 2030 and beyond.

• Expansion of 15,000 tons capacity (INR 650 crores 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.

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