HEG, a major graphite electrode producer, has registered a massive surge in its quarterly revenue and profits.
HEG’s standalone revenue stood at INR 1292.45 crore, reflecting an increase of 383.71% Y-o-Y for the quarter under review.
HEG achieved net profit of INR 634.01 crores in Q4 against 342.11 crores Q3 FY2018, thereby registering a Q-o-Q growth in profit of 85%. The figure read a net loss of INR 3.42 crore in the corresponding quarter of the previous year.
The board of directors also recommended a final dividend of INR 50 per share for 2017-18.
However, it is noteworthy that increasing raw material cost could affect their margins in the future, as new Needle Coke contract prices will start coming into play from the onset of August quarter onwards.
Albeit, such a performance, the stock price of HEG ended the trading session today from where it began in the morning, creating confusion among the investors. The graphite electrode industry has undergone a revival in demand driven by growth in electric arc furnace (EAF) route of manufacturing steel globally. Graphite electrodes are an essential consumable in the production of steel using EAF. Prices of needle coke – a major raw material used in graphite electrodes – have also risen to significant levels, driven by demand for graphite electrodes and very likely also from lithium-ion batteries, where needle coke has begun to be used. HEG is the fifth biggest manufacturer of graphite electrodes in the world, with an annual production capacity of 80,000 MTPA.
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