HEG Limited (NSE: HEG, BSE: 509631) reported a sharp improvement in profitability for the quarter and nine months ended Dec. 31, 2025, supported by higher realizations, operating leverage and cost discipline, even as global steel production remained under pressure, according to the company’s investor presentation on unaudited results.
Q3 FY26 standalone performance
Revenue from operations for the quarter stood at ₹655.66 crore, compared with ₹477.07 crore a year earlier, reflecting improved pricing and volumes. Total income rose to ₹756.20 crore from ₹590.30 crore in Q3 FY25.
Profit before tax increased to ₹180.10 crore, up from ₹133.68 crore a year earlier. Profit after tax rose to ₹141.25 crore, compared with ₹98.32 crore in Q3 FY25. Basic EPS improved to ₹7.32 from ₹5.09.
Operating performance strengthened sequentially as well. Compared with Q2 FY26, revenue declined modestly, but EBITDA increased to ₹243 crore from ₹226 crore, lifting the EBITDA margin to 32% from 28% in the preceding quarter, reflecting improved operating leverage and a favorable mix.
Nine-month FY26 snapshot
For the nine months ended Dec. 31, 2025, revenue from operations rose to ₹1,965.29 crore from ₹1,616.13 crore in the year-ago period. Total income increased to ₹2,220.48 crore from ₹1,792.75 crore.
Profit before tax for 9M FY26 stood at ₹435.41 crore, compared with ₹219.42 crore in 9M FY25. Profit after tax rose to ₹343.91 crore from ₹162.99 crore. EPS for the nine-month period increased to ₹17.82 from ₹8.45, reflecting strong operating leverage and margin expansion over the period.
Industry backdrop and demand outlook
The presentation highlighted continued pressure on global steel production in calendar 2025, with world crude steel output declining about 2% year on year, led by a contraction in China. In contrast, steel production outside China grew marginally, with India emerging as the key growth engine, supported by infrastructure spending and capacity utilisation.
HEG said demand for graphite electrodes remains structurally supported by the long-term shift toward electric arc furnace (EAF) steelmaking outside China. EAF-based steel production is more carbon-efficient than blast furnaces, supporting sustained demand for graphite electrodes over the medium to long term.
Capacity, exports and competitive position
HEG operates the world’s largest single-site graphite electrode plant at Mandideep, with installed capacity expanded to 100,000 tonnes per annum since November 2023. The company has announced a further expansion of 15,000 tonnes to reach 115,000 tonnes by end-2027, positioning it among the largest producers in the western world.
Exports account for about 65%–70% of production, with shipments to around 35 countries. The company highlighted its diversified customer base, supplying a significant portion of volumes to the top global steel producers. HEG also benefits from captive power capacity of about 80 MW, supporting energy cost management.
Balance sheet and liquidity indicators
Investments, including cash and equivalents (excluding associates and subsidiaries), stood at ₹1,155 crore as of Dec. 31, 2025, while short-term working capital borrowings were ₹691 crore. Management said the balance sheet remains strong, providing flexibility to navigate cyclical demand and fund capacity expansion.
Summary
HEG delivered strong profit growth in Q3 FY26 and across the first nine months of FY26, driven by improved realizations, operating leverage and margin expansion. While near-term global steel production remains under pressure, structural growth in EAF steelmaking outside China supports a durable demand outlook for graphite electrodes. Capacity expansion plans and a diversified export footprint provide visibility for medium-term growth.