HEG Ltd Q4 FY26 Results: Revenue Surges 20%, EAF Shift Powers Growth

HEG Ltd reported revenue of ₹2,569 crore in Q4 FY26, a 20% year-over-year increase, and EBITDA climbed 28% to ₹497 crore. The company reported a net loss of ₹189 crore for the quarter. This loss stemmed mainly from unrealized fair valuation and foreign exchange losses, not from core business operations.

Industry Shift Drives Demand

The global steel industry is shifting towards Electric Arc Furnaces (EAFs) for production. This move, driven by decarbonization goals and new environmental rules, increases demand for graphite electrodes, HEG's main product. HEG is well-placed to benefit from this trend through its planned capacity expansions and focus on operational efficiency.

Company Expansion Plans

HEG is expanding its graphite electrode manufacturing capacity from 100,000 tons to 115,000 tons, with completion expected by early 2028. The company is also developing a pilot plant for 'Greentech/TACC' and has invested in GrafTech International, a global leader in graphite electrodes, to strengthen its market position.

Growth Strategy

HEG aims to create shareholder value by leveraging the global shift to EAF steelmaking. The planned capacity expansion is set to meet rising demand for graphite electrodes. The company will continue focusing on operational efficiency and cost control. Diversifying its customer base is also a key objective to reduce risks and improve market reach.

Potential Risks

Unrealized losses from investment valuation and foreign exchange fluctuations can affect reported profits. Geopolitical tensions, such as the Middle East crisis, could disrupt shipping and delay orders, impacting sales. Increasing global trade protectionist measures, like the EU's CBAM, need careful monitoring. Dependence on a few global suppliers for critical raw materials like needle coke presents a supply risk, though supplies are reportedly secured.

Competitors

HEG competes with other major graphite electrode manufacturers worldwide. In India, Graphite India Ltd is a significant player. Globally, companies like Japan's Tokai Carbon Co., Ltd. and Showa Denko K.K. are also key producers. These competitors also stand to benefit from the growing demand for electrodes as the steel industry increasingly adopts EAF production.

Looking Ahead

Key developments to watch include the National Company Law Tribunal's (NCLT) decision on the company's composite scheme of arrangement. The EU's new tariff rate quota regime for steel imports, effective July 1, 2026, will be important for electrode demand. HEG's management will focus on executing planned price increases for uncommitted volumes and managing currency and geopolitical impacts on operations and supply chains. Progress on the Greentech/TACC pilot plant and the GrafTech investment will also be monitored.