Q4 2025 HEG Ltd Earnings Call Transcript
Key Points
- HEG Ltd (BOM:509631) reported a significant increase in EBITDA, reaching 27% in Q4 FY25, with a full-year average of 21%, indicating strong operational performance.
- The company expanded its graphite electrode capacity from 80,000 tonnes to 100,000 tonnes, maintaining high capacity utilization between 80% and 85%, which is above the industry average.
- HEG Ltd remains one of the lowest cost producers of electrodes globally, benefiting from its large single-location capacity and low fixed costs.
- The global shift towards decarbonization and the commissioning of new electric arc furnace projects are expected to drive future demand for graphite electrodes, providing a positive outlook for HEG Ltd.
- The company is debt-free and has a substantial treasury size of approximately INR875 crores, providing financial stability and flexibility for future investments.
- Global crude steel production declined slightly, with major steel-producing regions experiencing weak demand and pricing challenges, impacting HEG Ltd's product demand and pricing.
- The imposition of a 10% import duty in the US could negatively affect HEG Ltd's business, although the impact is expected to be limited due to its diversified sales footprint.
- HEG Ltd recorded a mark-to-market loss on its investment in GrafTech International, resulting in a significant hit to its financials, with a loss of INR160 crores in Q4 FY25.
- The company's revenue from operations decreased to INR2,153 crores in FY25 from INR2,395 crores in the previous year, reflecting a challenging market environment.
- Despite the positive outlook, near-term challenges persist, with current graphite electrode prices being unsustainable for the industry, necessitating price increases to maintain profitability.
Good day, ladies and gentlemen. Welcome to the HEG Limited Q4 FY25 and full year FY25 results conference call organized by SKP Securities Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Navin Agarwal, Head, Institutional Equities at SKP Securities Limited. Thank you, and over to you, sir.
Good afternoon, ladies and gentlemen. I'm pleased to welcome you on behalf of HEG Limited and SKP Securities to this financial results conference call with the leadership team at HEG Limited. We have with us Mr. Ravi Jhunjhunwala, Chairman, Managing Director and CEO; and Mr. Riju Jhunjhunwala, Vice Chairman; along with their colleagues, Mr. Manish Gulati, Executive Director; Mr. Om Prakash Ajmera, Group CFO; Mr. Ravi Tripathi, CFO; and Mr. Ankur Khaitan, MD and CEO of TACC Limited, a subsidiary of HEG Limited. We will have the opening remarks from Mr. Jhunjhunwala, followed by a Q&A session.
Thank you, and over to
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