HEG (HEG) Q4 24/25 earnings summary

Executive summary

• Global crude steel production declined 0.3% year-over-year in Q1 2025, with most regions except China and India seeing lower output due to weak demand and pricing challenges.

• India’s steel output rose 6.8% year-over-year, supporting domestic demand for electrodes.

• The company expanded graphite electrode capacity to 100,000 tons in Nov 2023, becoming the third largest producer in the western world, and maintains 80-85% utilization.

• Exports remain strong, with 65–70% of production shipped to about 35 countries, serving top global steelmakers.

• The company remains among the lowest-cost producers globally and is well-diversified across export markets.

Financial highlights

• FY2025 standalone revenue from operations was ₹2,152.71 crore, down from ₹2,394.90 crore in FY2024; consolidated revenue was ₹2,159.69 crore, down from ₹2,394.90 crore.

• Standalone net profit after tax for FY2025 was ₹101.31 crore (vs. ₹231.54 crore in FY2024); consolidated net profit was ₹115.06 crore (vs. ₹311.67 crore in FY2024).

• Q4 FY2025 standalone loss before tax was ₹72 crore, compared to a profit of ₹49 crore in Q4 FY2024.

• EBITDA margin dropped to 17% in FY2025 from 21% in FY2024; PAT margin declined to 4% from 9%.

• Mark-to-market losses on GrafTech investment significantly impacted profits.

Outlook and guidance

• Capacity utilization is expected to remain at or above 80% in FY2026.

• The company is optimistic about mid-to-long-term demand, driven by global decarbonization and new electric arc furnace (EAF) projects, with 35-40 million tons of new EAF capacity expected globally in the next 18 months.

• Decarbonization trends in steelmaking are expected to drive long-term demand for graphite electrodes, with an estimated additional 200,000 tons needed by 2030 (excluding China).

• Price increases for electrodes are anticipated as capacity closures take effect, though timing is uncertain.

• Optimism remains for long-term growth despite short-term headwinds.