Q1 2025 HEG Ltd Earnings Call Transcript
Key Points
- HEG Ltd (BOM:509631) has completed its expansion from 80,000 to 100,000 tons, making it the largest single-location plant in the Western world.
- India's steel production grew by 6.9%, which positively impacts the demand for HEG Ltd's graphite electrodes.
- The company is long-term debt-free and has a substantial treasury size of nearly INR917 crore as of June 30, 2024.
- HEG Ltd's capacity utilization for Q1 FY25 was close to 80%, indicating efficient use of its expanded capacity.
- The company is optimistic about the mid to long-term prospects of the graphite electrode industry due to global decarbonization efforts and new electric arc furnace capacities being announced.
- HEG Ltd's profit before tax was lower compared to the previous quarter, partly due to a one-time mark-to-market loss on a treasury-related investment.
- Global steel production remained flat, with significant declines in major steel-producing areas like the US, Japan, South Korea, and Russia, impacting the demand for graphite electrodes.
- The electrode pricing continues to remain under pressure due to reduced demand, affecting the company's margins.
- The company is facing near-term margin pressures due to the narrowing spread between electrode prices and needle coke prices.
- The green anode plant project has been delayed by a couple of quarters due to the need to renegotiate power prices and assess the impact of falling lithium-ion battery prices.
Good day, ladies and gentlemen. Welcome to the HEG Limited Q1 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, it's my pleasure 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. Puneet Anand, CSO, and Mr. Ravi Tripathi, GM Finance.
We'll have the opening remarks from Mr. Jhunjhunwala was followed by a Q&A session. Thank you. And over to you, Ravi.
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