HEG Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from HEG Limited (HEG) Q4 FY22 Earnings Concall

 

Q&A Highlights:

Sonali Salgaonkar – Jefferies – Analyst

• Quantum of price hikes between 3Q and 4Q and any price hike from April 1 until now?

Ravi Jhunjhunwala – Managing Director

• Between 3Q and 4Q it’s 12% and expecting to add 4-5% QonQ.

  

Sonali Salgaonkar – Jefferies – Analyst

• Current inventory levels of electrodes?

Ravi Jhunjhunwala – Managing Director

• HEG is working at very low inventory levels.
  • Normal is a month, but HEG is working at less than that.
• Has no excess inventories with customers or suppliers.

 

Sonali Salgaonkar – Jefferies – Analyst

• HEG’s key export geographies?

Ravi Jhunjhunwala – Managing Director

• It’s Americas, followed by Middle East, Southeast Asia, Europe and a little bit to African countries.

 

Sonali Salgaonkar – Jefferies – Analyst

• Of the 30-35 million new EAF steel production, where is it coming from?

Ravi Jhunjhunwala – Managing Director

• About 15-20 million in Americas and rest in Europe.

 

Sonali Salgaonkar – Jefferies – Analyst

• What portion of INR12 billion is spent and how much is left for investment?

Ravi Jhunjhunwala – Managing Director

• INR800 crores is already spent and INR400 crore remains to be spent until December.

 

Abhijeet Dey – Equentis Wealth – Analyst

• Expected price increases in needle coke over the next two quarters?

Ravi Jhunjhunwala – Managing Director

• If graphite prices go up, needle coke prices will follow. There would be only a couple of quarters lag.

 

Pranav Jain – HDFC securities – Analyst

• Production and sales volume for 4Q22 and FY22?

Ravi Jhunjhunwala – Managing Director

• HEG is at 90% capacity utilization.
• Can’t give exact production and sales numbers.

 

Rajesh Agarwal – Moneyore – Analyst

• Did HEG had volume growth in Q4 and when will capacity come online?

Ravi Jhunjhunwala – Managing Director

• The 4Q volume growth was same as 3Q.
• For new volumes to come in, it will be in 1Q calendar year 2023.
• Should be doing 7-8% more volume in CY1Q23 than last year.

 

Dewang Sanghavi – ICICI Securities – Analyst

• Is there’s any demand impact due to recent export duty on steel export?

Ravi Jhunjhunwala – Managing Director

• It’s a dampener for the steel customers.
  • This duty seems temporary.
• HEG exports two-thirds to 40 countries and so won’t see much impact.