HEG Ltd's Profit Skyrockets 73% Amidst ₹633 Cr Investment & ₹565 Cr Tax Storm! See The Full Story

Hindustan Electro Graphites (HEG) Ltd has announced robust financial results for the quarter ended September 2025. The company reported a net profit of ₹143 crore, marking a substantial year-on-year increase of 72.7% compared to ₹82.8 crore in the same period last year. Revenue also saw significant growth, rising by 23.2% to ₹699.2 crore from ₹567.6 crore year-on-year. EBITDA increased by 23% to ₹118.4 crore, while operating margins remained steady at 17%.

In addition to these strong financial figures, HEG Ltd's board has approved a significant strategic move: the proposed subscription to unlisted and unsecured optionally convertible debentures (OCDs) of TACC Limited, a wholly-owned subsidiary, for an aggregate amount of up to ₹633 crore. This indicates a substantial investment in the subsidiary. Furthermore, the board noted the proposed sale of a 26% stake in Texnere India Private Limited, another wholly-owned subsidiary, following a valuation report.

The company also announced the appointment of Puneet Anand as President and Group Chief Strategy Officer, effective December 1, 2025, who will serve as a Key Managerial Personnel (KMP).

However, a point of concern is the receipt of show-cause notices from the Office of the Deputy Commissioner (SGST) related to IGST refunds for FY 2019-20 and FY 2020-21, proposing penalties of ₹282.34 crore for each period. HEG Ltd has stated that the impact will be limited to final tax liability, including any applicable interest and penalties, and expressed confidence that the IGST refunds are in order, expecting the notices to be dropped, similar to previous cases.

Impact 7/10

Difficult Terms: Net Profit: The profit remaining after all expenses, taxes, and interest have been deducted from revenue. Revenue: The total income generated from the sale of goods or services. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization – a measure of a company's operating performance. Operating Margin: The percentage of revenue that remains after deducting operating expenses. Unlisted and Unsecured Optionally Convertible Debentures (OCDs): Debt instruments that can be converted into shares of the issuing company at a future date, often at the holder's option. They are "unlisted" (not traded on stock exchanges) and "unsecured" (not backed by specific company assets). Subsidiary: A company controlled by another company (the parent company). SEBI-registered Category-I Merchant Banker: A financial institution registered with the Securities and Exchange Board of India (SEBI) that advises companies on financial matters like mergers, acquisitions, and capital raising. Key Managerial Personnel (KMP): Senior executives of a company responsible for managing its operations and strategy. Show-cause Notice: A formal document issued by a regulatory body asking a party to explain why a certain action should not be taken against them. IGST (Integrated Goods and Services Tax): A tax levied on inter-state supply of goods and services in India. FY (Financial Year): A 12-month period over which a company or government budgets and accounts for its finances.