HEG Ltd Q2FY26 – From Arc to Anode, the Graphite Godfather’s ₹699 Cr Quarter Ignites a Spark (with ₹143 Cr Profit up 74%)
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1. At a Glance
There are companies that make steel, and then there’s the one that quietly fuels their furnaces — HEG Ltd, the desi graphite electrode godfather from the LNJ Bhilwara Group. As of Q2FY26, HEG’s revenue clocked ₹699 crore, up 23% YoY, with PAT zooming 74% to ₹143 crore — not bad for a sector that often smells like burnt carbon and accounting smoke.
At ₹533 per share, the company carries a market cap of ₹10,283 crore, trading at a lofty P/E of 39.8x and EV/EBITDA of 18.4x, which is roughly how an overenthusiastic analyst values hope and nostalgia. Its ROE is just 2.6% — yes, that’s not a typo, but maybe graphite isn’t the only thing under pressure.
Still, the company’s largest single-site graphite electrode plant in the world (100,000 TPA at Mandideep) keeps the carbon narrative strong. Oh, and it’s also working on a 20,000-ton graphite anode plant (for EV batteries) — because when you’ve burnt enough coke, you might as well charge one.
The stock’s up 20.7% over the past year and 37.3% over three years, because retail investors love a turnaround story, even if it’s written in soot.
2. Introduction – “From Furnace Fumes to Future Fads”
Once upon a carbon molecule, in the industrial alleys of Madhya Pradesh, HEG Ltd decided to make graphite electrodes — the unsung hero that melts scrap into steel in Electric Arc Furnaces (EAFs). Since 1976, it’s been grinding needle coke into billion-rupee brilliance.
Cut to FY26 — steel demand’s swinging like an EAF crane, and HEG is riding that volatility like a seasoned juggler with one burnt hand and one battery pack.
The company’s story has two acts:
Act I: Dominating the graphite electrode business with exports to 35+ countries.
Act II: Jumping into graphite anodes for EV batteries through its WOS TACC Ltd, because who doesn’t want to be part of the electric dream?
But behind the boardroom buzz lies a rather dry financial reality — subdued returns (ROE 2.6%), slow sales growth (3.9%), and heavy reliance on other income (₹362 crore last year).
Still, investors stay hooked because HEG is like that old rock band — unpredictable, loud, sometimes down, but still iconic enough to fill a stadium when the cycle turns.
3. Business Model – WTF Do They Even Do?
Let’s keep it simple. HEG makes graphite electrodes, a fancy way to say “giant pencils that melt steel scrap at 3000°C.”
Here’s how it works:
Input: Petroleum coke and needle coke (no, not that kind of coke).
Magic: Mix, mold, bake, and graphitize.
Output: Ultra-High Power (UHP), Super-High Power (SHP), and High Power (HP) graphite electrodes.
Customers: Top 20 steelmakers globally.
Around 67% of sales are exports, spread over 35+ countries — because apparently, even Japan and the US like Indian carbon better than their own.
The plant in Mandideep, MP, runs at 81% utilization, powered by 80 MW captive generation — two thermal plants and a hydropower plant. That’s right, HEG burns coal to make electrodes for “green” steel. Irony called; it’s glowing.
And now comes the spin-off drama — HEG is demerging its graphite business into HEG Graphite Ltd and merging Bhilwara Energy Ltd into itself. Translation: “We’re rearranging the carbon atoms for shareholder clarity.”
