Q2 2025 HEG Ltd Earnings Call Transcript
Key Points
- HEG Ltd (BOM:509631) has successfully expanded its capacity from 80,000 tonnes to 100,000 tonnes, making it the largest single-location plant in the western world, which provides cost advantages.
- The company's capacity utilization for Q2 FY25 was 80%, the highest among global producers, indicating efficient operations.
- HEG Ltd remains long-term debt-free with a substantial treasury size of INR923 crores as of September 30, 2024, showcasing financial stability.
- The company recorded an increase in EBITDA to INR140 crores for the quarter, compared to INR130 crores in the previous year, indicating improved operational performance.
- HEG Ltd is well-positioned to meet future demand increases due to its extensive export network and relationships, exporting two-thirds of its production to over 25 countries.
- Global crude steel production has declined, impacting the demand for graphite electrodes and putting pressure on sales prices and production.
- Electrode pricing remains under pressure due to reduced demand, affecting margins.
- The spread between electrode prices and needle coke prices has narrowed, further pressuring margins.
- The company's consolidated net profit after tax decreased to INR82 crores in Q2 FY25 from INR96 crores in the same quarter of the previous year.
- HEG Ltd faces near-term margin pressures, with expectations of continued pressure in the next few quarters due to market conditions.
Good day, ladies and gentlemen. Welcome to the HEG Limited Q2 FY25 results conference call organized by SKP Securities Limited. (Operator Instructions) Please note that this conference call 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. Puneet Anand, CSO. We'll have the opening remarks from Mr. Jhunjhunwala, followed by a Q&A session.
Thank you, and over to you, Ravi ji.
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