{"id":159170,"date":"2024-02-23T10:26:05","date_gmt":"2024-02-23T15:26:05","guid":{"rendered":"https:\/\/44.250.171.167\/?p=159170"},"modified":"2024-02-23T10:28:56","modified_gmt":"2024-02-23T15:28:56","slug":"heg-limited-q3-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/heg-limited-q3-fy24-earnings-conference-call-insights\/","title":{"rendered":"HEG Limited Q3 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from HEG Limited (HEG) Q3 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Steel Production Trends<\/strong>\n<ul>\n<li>Global steel production flat in 2023 versus 2022 at around 1.8 billion tons.<\/li>\n<li>China production declined in H2 2023 but increased exports by 34%.<\/li>\n<li>India steel production grew 12% driven by domestic infrastructure and real estate.<\/li>\n<li>Expect global steel production to remain subdued in 2024 as well.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Electrodes Demand Growth<\/strong>\n<ul>\n<li>Decarbonization driving more electric arc furnace steel capacity additions.<\/li>\n<li>90 million tons of new EAF capacity announced globally, boosting electrode demand.<\/li>\n<li>Electrode demand estimated to increase by 150k-200k tons through 2029-30.<\/li>\n<li>New 20k tons TACC facility to meet growing anode powder needs of EV market.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Operations Update<\/strong>\n<ul>\n<li>Operated at 85% capacity utilization in first 3 quarters of fiscal year.<\/li>\n<li>Expanded capacity of 100k tons now operational, to start commercial output this quarter.<\/li>\n<li>Raw material inventory levels normalized, no overhang presently.<\/li>\n<li>Margins to remain under pressure over next 2-3 quarters due to weak steel demand.<\/li>\n<li>Well positioned to capitalize on long term electrode demand growth<\/li>\n<\/ul>\n<\/li>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Recorded revenue from operations of INR 562 crores versus INR 614 crores last quarter.<\/li>\n<li>EBITDA including other income stood at INR 110 crores compared to INR 130 crores in Q2FY24.<\/li>\n<li>Net profit after tax declined to INR 37 crores from INR 62 crores quarter-on-quarter.<\/li>\n<li>Revenue decreased by 8.5% compared to previous quarter.<\/li>\n<li>Delivered lower volumes as focus remains on exports for the company.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Volume Growth Trends<\/strong>\n<ul>\n<li>Expect to sell 10-12% higher volumes in FY2024 versus last year.<\/li>\n<li>Volume growth largely flat across the three quarters of this fiscal year.<\/li>\n<li>Overall steel production stagnant leading to flat electric arc furnace volumes as well.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Anode Business Outlook<\/strong>\n<ul>\n<li>Investing INR 2,000 crores in 20,000 tons per annum facility.<\/li>\n<li>Expect 25-30% EBITDA margins from second year of operations.<\/li>\n<li>Commercial production to commence by March-April 2025.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capacity Utilization and Spreads<\/strong>\n<ul>\n<li>Operated at ~85% capacity utilization across all three quarters.<\/li>\n<li>Will benchmark utilization to expanded 1 lakh tonnes capacity going forward.<\/li>\n<li>Spreads have declined across the three quarters due to lag effect.<\/li>\n<li>Electrode prices fall but higher cost needle coke inventory works through.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Graphite Demand Growth<\/strong>\n<ul>\n<li>90 million tons new electric arc furnace steel capacity announced globally, requiring ~200,000 extra tons graphite electrodes per year.<\/li>\n<li>Expect to start production in new EV graphite facility by July-September 2025.<\/li>\n<li>HEG will produce graphite for lithium-ion batteries for electric vehicles.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Needle Coke Supply<\/strong>\n<ul>\n<li>4-5 petroleum needle coke suppliers currently globally.<\/li>\n<li>Supply expected to match demand with increased electric arc furnace capacity.<\/li>\n<li>No new needle coke capacity added in ~50 years similar to electrode industry.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Electrode Pricing Pressure<\/strong>\n<ul>\n<li>Demand ex-China not changed much recently.<\/li>\n<li>Some companies&#8217; utilization rates have fallen.<\/li>\n<li>Pricing pressure likely due to competitive dynamics between major producers.<\/li>\n<li>Company believes it has cost and quality advantage over competitors.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Anode Facility Update<\/strong>\n<ul>\n<li>Leveraging internal graphite expertise from current electrode operations.<\/li>\n<li>Running pilot plant to develop products matched to customer needs.<\/li>\n<li>Locating in Madhya Pradesh to get government subsidies<\/li>\n<li>Targeting INR5-6 per unit cost through state subsidy and potential dedicated solar\/wind electricity tie-ups.<\/li>\n<li>50 GWh lithium-ion battery factories being set up currently in India.<\/li>\n<li>Company aims to be early leader in this market through 2025 start date.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from HEG Limited (HEG) Q3 FY24 Earnings Concall Steel Production Trends Global steel production flat in 2023 versus 2022 at around 1.8 billion tons. China production declined in H2 2023 but increased exports by 34%. India steel production grew 12% driven by domestic infrastructure and real estate. Expect global steel production to remain [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5753],"tags":[10169,13418,9478],"class_list":["post-159170","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-industrials","tag-earnings","tag-graphite-electrode","tag-industirals"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":156365,"url":"https:\/\/alphastreet.com\/india\/heg-limited-q2-fy24-earnings-conference-call-insights\/","url_meta":{"origin":159170,"position":0},"title":"HEG Limited Q2 FY24 Earnings Conference Call Insights","author":"Praveen","date":"November 17, 2023","format":false,"excerpt":"Key highlights from HEG Limited (HEG) Q2 FY24 Earnings Concall Steel Production Trends Steel production outside China down 2-4% in 2022 vs 2021, but up 11.6% in India. China exporting more steel, pressuring production in Europe and U.S. World Steel Association revised 2023-2024 projections down for EU and U.S. Electric\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":133492,"url":"https:\/\/alphastreet.com\/india\/heg-limited-q1-fy23-earnings-conference-call-insights\/","url_meta":{"origin":159170,"position":1},"title":"HEG Limited Q1 FY23 Earnings Conference Call Insights","author":"Praveen","date":"August 29, 2022","format":false,"excerpt":"https:\/\/youtu.be\/rStQaBDBBUY Key highlights from HEG Limited (HEG) Q1 FY23 Earnings Concall Q&A Highlights: Dhawal Doshi of Pinpoint Asset asked how the company is seeing needle coke pricing given crude has started correcting. Manish Gulati ED said the needle coke prices for the last two quarters, purchase prices have been at\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":143242,"url":"https:\/\/alphastreet.com\/india\/heg-limited-q3-fy23-earnings-conference-call-insights\/","url_meta":{"origin":159170,"position":2},"title":"HEG Limited Q3 FY23 Earnings Conference Call Insights","author":"Praveen","date":"March 13, 2023","format":false,"excerpt":"Key highlights from HEG Limited (HEG) Q3 FY23 Earnings Concall Q&A Highlights: [00:11:28] Sonali Salgaonkar from Jefferies enquired about the capacity utilization for 3Q23. Ravi Jhunjhunwala CEO answered that for Oct.-Dec. quarter it was about 60% and in Jan.-Mar., the company is at about 70%. 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Q3 FY26\u2026","rel":"","context":"In &quot;LATEST&quot;","block_context":{"text":"LATEST","link":"https:\/\/alphastreet.com\/india\/category\/latest\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/10\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/10\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/10\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":147027,"url":"https:\/\/alphastreet.com\/india\/earnings-summary-of-heg-limited-for-q4-fy23\/","url_meta":{"origin":159170,"position":4},"title":"Earnings Summary Of HEG Limited For Q4 FY23","author":"Hardik Bhandare","date":"May 22, 2023","format":false,"excerpt":"HEG Limited is a leading graphite electrode manufacturer based in India. With a rich history spanning over four decades, the company has emerged as a global player in the graphite electrode industry. HEG is part of the LNJ Bhilwara Group, a diversified conglomerate with interests in textiles, graphite, and power\u2026","rel":"","context":"In &quot;Earnings&quot;","block_context":{"text":"Earnings","link":"https:\/\/alphastreet.com\/india\/category\/earnings\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/898c572d-b97a-4c10-acd3-c5f4d9ad88be-1-8.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/898c572d-b97a-4c10-acd3-c5f4d9ad88be-1-8.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/898c572d-b97a-4c10-acd3-c5f4d9ad88be-1-8.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/898c572d-b97a-4c10-acd3-c5f4d9ad88be-1-8.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/898c572d-b97a-4c10-acd3-c5f4d9ad88be-1-8.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/898c572d-b97a-4c10-acd3-c5f4d9ad88be-1-8.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":148446,"url":"https:\/\/alphastreet.com\/india\/heg-limited-q4-fy23-earnings-conference-call-insights\/","url_meta":{"origin":159170,"position":5},"title":"HEG Limited Q4 FY23 Earnings Conference Call Insights","author":"Praveen","date":"June 5, 2023","format":false,"excerpt":"Key highlights from HEG Limited (HEG) Q4 FY23 Earnings Concall Q&A Highlights: [00:12:50] Vipraw Srivastava of InCred asked if an increase is expected in US sales contribution with the upcoming EAF plants. Ravi Jhunjhunwala MD replied that in the last four years, sales in the US have increased 2.5 to\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/159170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/users\/1767"}],"replies":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/comments?post=159170"}],"version-history":[{"count":0,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/159170\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media\/154818"}],"wp:attachment":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media?parent=159170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/categories?post=159170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/tags?post=159170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}