HEG Ltd

YoY, the performance of the company looks extremely good on the back of robust jump in net sales and the fact that Q3FY13 net profit had been seriously dented by a forex loss of Rs.13 crore compared to Rs.2 crore in current Q3. The company ended Q3FY14 with a net profit at Rs.44 crore, up from Rs.11 crore in Q3FY13 and Rs.5 crore in Q2FY14. Its net revenue jumped up to Rs.424 crore, up 21% (YoY) and up 40% sequentially. Finance cost remains high at Rs.20 crore.

The company’s Graphite Electrode capacity currently stands at 80,000 MT, making it one of the largest single-site integrated graphite electrode facility in the world.  It also operates three power generation facilities with a total rated capacity of about 77 MW. The hydroelectric power plant at Tawa near Itarsi, District Hoshangabad (Madhya Pradesh) has a rated capacity of 13.5 MW, while two captive thermal power plants located at Mandideep (Madhya Pradesh) have rated capacities of 30 MW and 33 MW respectively. In current fiscal, the company hopes to maintain EBIDTA margin at 16-20% and capacity utilization of 70-75%. Consolidated debt of the company at end of FY13 stood at Rs.1215 crore.  Looking ahead in the immediate short term, the downward bias in prices of graphite electrodes is expected to continue but lower price of needle coke, its main raw material is also expected to remain low and if supported with better volumes, margins will get better.