HEG Ltd reported strong FY26 results with Net Profit at ₹180.72 crore, up from ₹101.31 crore. The company announced a ₹650 crore capacity expansion and a demerger plan to create two listed entities.
HEG Ltd Reports Strong FY26 Growth, Announces Major Expansion and Demerger Plans
HEG Ltd's Net Sales for FY 2025-26 reached ₹2551.77 crore, a significant increase from ₹2137.34 crore in FY 2024-25. The company's Net Profit saw a substantial rise to ₹180.72 crore, up from ₹101.31 crore in the previous year. Basic EPS improved to ₹9.36 from ₹5.25.
Reader Takeaway: Strong profit growth and strategic demerger signal future value creation amidst operational strengths.
What just happened
HEG Limited reported robust financial performance for the fiscal year 2025-26, with net sales of ₹2551.77 crore and net profit of ₹180.72 crore. The company also announced a significant brownfield capacity expansion at its Mandideep facility, involving an investment of ₹650 crore to increase capacity to 115,000 TPA by Q4 FY2028. Furthermore, the Board approved a scheme of arrangement for demerging the graphite electrode business into a separate listed entity, HEG Greentech.
Why this matters
The strong financial results demonstrate the company's operational efficiency and market resilience. The proposed demerger aims to unlock shareholder value by separating the established graphite electrode business from the high-growth Greentech ventures like anode materials and energy storage. The capacity expansion signals confidence in future demand from the Electric Arc Furnace (EAF) steelmaking segment.
The backstory
HEG Limited is a significant player in the graphite electrode industry. The company has historically focused on its core manufacturing capabilities. The current strategic moves reflect a proactive approach to adapting to evolving market demands and unlocking potential in new energy sectors.
What changes now
Upon successful demerger, HEG will comprise two independent listed companies, allowing for more focused management and potentially distinct valuations. The core graphite electrode business will continue its operations, supported by planned capacity expansion. HEG Greentech will spearhead new initiatives in battery materials and energy storage. The company maintains a debt-free balance sheet with substantial liquidity.
Risks to watch
While the Q4 reported loss of ₹189 crore was attributed to non-cash, unrealized mark-to-market revaluations and currency depreciation, it highlights sensitivity to financial market fluctuations. Global headwinds such as Chinese export aggression, logistics disruptions, and volatile energy prices continue to pose challenges for the EAF steelmaking inputs sector.
Peer comparison
HEG Limited noted its capacity utilization of 90% in FY 2025-26 was the highest among its peer group, indicating strong operational performance relative to competitors.
Context metrics (time-bound)
- Net Sales (FY 2025-26): ₹2551.77 crore (vs. ₹2137.34 crore in FY 2024-25)
- Net Profit (FY 2025-26): ₹180.72 crore (vs. ₹101.31 crore in FY 2024-25)
- EBITDA (FY 2025-26): ₹497 crore
- Basic EPS (FY 2025-26): ₹9.36 (vs. ₹5.25 in FY 2024-25)
- Capacity Expansion Investment: ₹650 crore
- Target Capacity: 115,000 TPA by Q4 FY2028
- Treasury Balance (March 31, 2026): Approx. ₹792 crore
What to track next
Investors should closely monitor the progress of the demerger process and the regulatory approvals required. The execution and timeline for the ₹650 crore capacity expansion project, as well as market demand for graphite electrodes and HEG Greentech's ventures, will be key factors.