HEG Ltd
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
HEG Ltd is navigating a complex landscape characterized by strong medium-term structural tailwinds, particularly from the global shift towards Electric Arc Furnace (EAF) steelmaking, which is supported by decarbonization policies like the EU's Carbon Border Adjustment Mechanism (CBAM). Management's focus on expanding graphite electrode capacity to 120,000 TPA by 2028 aligns with anticipated recovery in global steel demand, despite near-term challenges from geopolitical tensions and rising input costs for needle coke. Vista's financial outlook reflects moderated revenue growth but improving margins, supported by HEG's strategic capacity expansions and proactive pricing strategies. The company's balance sheet remains conservatively financed, enhancing its resilience amid market volatility. While the industrial components sector is poised for growth, HEG faces headwinds from geopolitical uncertainties and fluctuating raw material costs. Over the next 12-24 months, key opportunities include leveraging capacity expansions and the potential of the new Greentech division, while watchpoints include managing input cost pressures and geopolitical risks that could impact order flow
Why We Like This Stock
- Strategic capacity expansion to 120,000 TPA aligns with the structural shift towards EAF steelmaking, enhancing market positioning
- Management's proactive pricing strategy aims to mitigate rising input costs, supporting margin improvement
- The establishment of the Greentech division presents new growth avenues in high-demand energy transition sectors
Things To Watch Out For
- Geopolitical tensions, particularly in the Middle East, pose risks to order flow and supply chain stability
- Rising input costs for needle coke may pressure margins in the near term, impacting profitability
- Mixed global steel demand outside China could create pricing pressures, complicating revenue growth
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 2,393 | 2,158 | 2,568 | 2,628 | 3,033 |
| Profit Before Tax (Cr.) | 394 | 160 | 405 | 670 | 698 |
| PBT Margin | 16.5% | 7.4% | 1577.1% | 25.5% | 23.0% |
| Net Profit (Cr.) | 319 | 111 | 327 | 545 | 568 |
| Earnings Per Share | 16.5 | 5.8 | 17.0 | 28.3 | 29.4 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Moneycontrol | ► Equalweight | — | 27-Jul-2026 |
Company Overview
Show Company Profile
HEG Limited manufactures and sells graphite electrodes in India and internationally. The company operates through two segments, Graphite Electrodes and Power Generation segments. It provides ultra-high power and high power electrodes; graphite electrodes and nipples; blocks and rounds; graphite and carbon specialties; mini-rods; flux and heat exchanger tubes; custom machined components; and activated carbon fabric products. The company operates thermal power plants and a hydroelectric power facility. HEG Limited was incorporated in 1972 and is headquartered in Noida, India.