HEG Limited — Important, 13-11-2024: Financial Result Updates

Consolidated financials for the half year reveal total revenue of ₹1,139.06 crore, down 11.4% from ₹1,285.60 crore in the previous period. This decline is attributed to lower demand in the graphite segment, influenced by external market conditions. However, a slight improvement in other income, which rose by 17.5% to ₹63.39 crore, helped mitigate some of the top-line impact.

Net profit stood at ₹105.33 crore, translating to an earnings per share (EPS) of ₹5.46, contrasting sharply with ₹235.11 crore and an EPS of ₹12.18 in the prior half-year. The decrease in profitability is primarily due to increased operational costs, with total expenses escalating to ₹1,117.01 crore, largely driven by a substantial rise in material and power costs, further weighing on margins.

Operational costs have increased by 10.3%, with significant outlays in materials rising by 4.8% and power & fuel costs by 7.1%, reflecting inflationary pressures impacting cost efficiency. The management remains focused on mitigating these costs through strategic sourcing and operational efficiencies.

The balance sheet shows a stable position, with total assets of ₹5,651.19 crore and liabilities of ₹1,206.12 crore, indicating a healthy debt-to-equity ratio. Cash flow from operating activities, though reduced, remains positive at ₹98.93 crore.

Overall, with an ongoing focus on cost control and efficiency improvements, along with anticipated recovery in demand, the outlook remains cautiously optimistic. Investors could consider a hold position, awaiting clarity on market conditions and recovery in profitability.