HEG Q2 FY27 results: net profit up 113.5% to ₹306.07 crore, revenue down 38.5%

How did HEG perform in Q2 FY27?

HEG Limited’s consolidated Q2 FY27 revenue was ₹429.94 crore for the July–September 2026 quarter, down ₹269.28 crore or 38.5% from ₹699.22 crore in Q2 FY26. It was also down ₹250.85 crore or 36.8% from ₹680.79 crore in Q1 FY27. EBITDA rose 65.7% year on year to ₹196.13 crore and increased 30.2% from ₹150.58 crore in the previous quarter; the EBITDA margin was 45.6%, compared with 16.9% and 22.1%, respectively.

Consolidated profit before tax was ₹278.53 crore, up 65.8% from ₹167.97 crore a year earlier and 107.0% from ₹134.58 crore in the previous quarter. Net profit was ₹306.07 crore, against ₹143.33 crore in Q2 FY26 and ₹122.34 crore in Q1 FY27, while basic EPS was ₹9.73, compared with ₹7.43 and ₹6.34. On the standalone basis, revenue was ₹7.59 crore and PAT was ₹133.26 crore.

The quarter followed the demerger of the graphite business and related scheme of arrangement, which affected comparison with previously reported figures. The filing stated that FY26 comparatives were restated to exclude the demerged graphite undertaking, and management said that current-period figures are not directly comparable with previously reported figures.

What changed in HEG's costs and profit?

The main reported change was in operating costs. Total expenses fell ₹375.48 crore or 58.3% to ₹268.06 crore from ₹643.54 crore in Q2 FY26. Other expenses declined ₹227.24 crore or 87.7% to ₹31.80 crore, while depreciation fell ₹39.21 crore or 72.9% to ₹14.54 crore and cost of materials decreased ₹30.98 crore or 13.2% to ₹203.12 crore.

Employee cost rose ₹12.10 crore or 41.9% to ₹41 crore and finance costs increased ₹10.79 crore or 121.0% to ₹19.71 crore. Other income rose ₹4.36 crore or 3.9% to ₹116.65 crore. There was no exceptional item in Q2 FY27, Q2 FY26 or Q1 FY27. Tax expense was ₹69.64 crore, up ₹37.74 crore or 118.3% from ₹31.90 crore a year earlier.

Against the previous quarter, total expenses fell ₹321.71 crore or 54.5%, mainly as other expenses decreased ₹214.66 crore and depreciation fell ₹35.05 crore. Employee cost rose ₹8.31 crore and finance costs rose ₹9.74 crore, while other income increased ₹73.09 crore to ₹116.65 crore and tax rose ₹26.90 crore to ₹69.64 crore.

How did the first half of FY27 go?

In the first half of FY27, consolidated revenue was ₹725.80 crore, down ₹590.35 crore or 44.9% from ₹1316.15 crore in H1 FY26. Total income fell ₹624.59 crore or 41.8% to ₹870.77 crore from ₹1495.36 crore, reflecting the effect of the demerger and the treatment of the graphite undertaking as a discontinued operation in the comparative period.

Profit before tax rose ₹91.53 crore or 32.8% to ₹370.62 crore from ₹279.09 crore in H1 FY26, while PAT increased ₹213.24 crore or 85.9% to ₹461.40 crore from ₹248.16 crore. Basic EPS rose to ₹14.79 from ₹12.86. H1 FY27 revenue and PAT included the effect of the scheme and discontinued-operations presentation, which limited direct comparability with previously reported figures.

What do the balance sheet and cash flow show?

At 30 September 2026, total assets were ₹4436.04 crore, down from ₹6165.75 crore at 31 March 2026, while total equity was ₹2509.79 crore compared with ₹4757.92 crore. Borrowings rose to ₹1131.02 crore from ₹793.28 crore and cash increased to ₹244.41 crore from ₹40.59 crore. Inventories fell to ₹100.53 crore from ₹1133.74 crore, trade receivables to ₹192.46 crore from ₹499.51 crore and trade payables to ₹344.07 crore from ₹400.77 crore.

H1 FY27 operating cash flow was ₹431.84 crore, compared with ₹241.83 crore in H1 FY26. Investing cash flow was negative ₹872.42 crore against negative ₹240.97 crore, and financing cash flow was positive ₹563.05 crore against negative ₹22.18 crore. Capital expenditure was ₹492.37 crore in H1 FY27, compared with ₹75.71 crore in H1 FY26.

How has HEG done over the last 8 quarters?

HEG’s quarterly trend has been uneven. Revenue peaked at ₹699.22 crore in Q2 FY26 before reaching ₹656.33 crore in Q3 FY26, falling to ₹603.21 crore in Q4 FY26 and rising to ₹680.79 crore in Q1 FY27; Q2 FY27 revenue was lower at ₹429.94 crore. The EBITDA margin reached 45.6% in Q2 FY27, against a low of negative 24.6% in Q4 FY26.

Profit also varied materially across the period. PAT bottomed at a loss of ₹113.77 crore in Q4 FY26 after a loss of ₹73.67 crore in Q4 FY25, then moved to ₹122.34 crore in Q1 FY27 and ₹306.07 crore in Q2 FY27. The latest quarter therefore showed lower revenue but higher profit and EBITDA margin than the preceding quarter, with profit having risen year on year in each of the last two quarters.

Which businesses drove the quarter?

Graphite was the largest reported segment in Q2 FY27, with revenue of ₹526.45 crore, down 23.3% from ₹686.21 crore in the year-ago quarter. Its EBIT was ₹86.42 crore, compared with ₹80.03 crore, and the EBIT margin was 16.4%. The reported segment figures do not reconcile directly to the consolidated quarter because of discontinued-operations and scheme-related presentation.

Power reported revenue of ₹212.20 crore, up 1894.4% from ₹10.64 crore in Q2 FY26, and EBIT of ₹189.37 crore compared with ₹5.94 crore; the EBIT margin was 89.2%. Battery energy storage system reported revenue of ₹215.51 crore and EBIT of negative ₹1.80 crore, while Consultancy reported revenue of ₹1.66 crore and EBIT of negative ₹0.69 crore.

Unallocable items and others recorded no revenue and EBIT of ₹5.86 crore. BESS and Consultancy had no comparable year-ago revenue or EBIT figures in the reported segment data.

What did the auditors point out?

The independent auditor, SCV & Co. LLP, said that nothing came to its attention causing it to believe that the statement had not disclosed the information required by Regulation 33 of the SEBI Listing Regulations or contained a material misstatement. The review was conducted under SRE 2410 and provided moderate assurance; the auditor said a review is substantially less in scope than an audit and that it does not express an audit opinion.

The auditor included an Emphasis of Matter concerning the Scheme of Arrangement approved by the National Company Law Tribunal on 13 August 2026, covering the transfer of the graphite business, overseas investment and TAWA power plant assets and liabilities. The emphasis noted that comparative Graphite operations were classified as discontinued operations under Ind AS 105 and that the conclusion was not modified in respect of this matter. The review report also reproduced a subsidiary-level emphasis concerning the NJC Hydro Power project, which the auditor said was on hold because of environmental-clearance suspension and was no longer doable at the project site.

What did HEG's management say?

In the 4 November 2026 investor presentation, management said HEG Advanced Materials was positioning itself as a technology-led anode, graphene and battery-storage platform. It said the 20K MT anode plant was under construction with a June 2027 COD, commercial validation was to begin in early 2027 and Phase II would scale the platform to 44K MT with a March 2029 COD. Management also said graphene capacity was targeted at 500 MT in 2028, with 90 MT under confirmed orders and LOIs, while BESS capacity of 200 MWh had a Q3 FY27 commissioning target.

Management said priorities included R&D, proprietary technologies, disciplined capital allocation, timely execution and customer development. It said anode customer volumes beyond the demo plant were MOUs, agreements and advance talks under discussion rather than firm booked orders, and that most crucibles were currently imported, leaving supply, price and lead times outside the company’s control. Management also said comparability was affected by the demerger and that consolidated performance depends on weather, wind and hydraulic conditions.

The board approved a revised estimated cost of about Rs. 2,350 crore for the Phase-1 20,000 MT anode project, a proposed expansion to 44,000 MT at an estimated cost of about Rs. 1606 crore, and an 80,000-unit crucible plant at an estimated cost of about Rs. 475 crore. It also approved a 500 MT graphene plant in two phases at an estimated cost of about Rs. 500 crore, with target COD dates of September 2028 for the crucible and graphene projects and March 2029 for anode Phase II. The filing did not record analysts’ questions.

How did HEG shares react?

After the filing, HEG’s shares rose 1.9% in five minutes, 2.9% in 15 minutes and 3.7% in 30 minutes. On the reaction day, the stock was up 4.9% from the pre-results close of ₹235.50, and by the next day’s close it was up 2.5% from that close. The Electrodes & Refractories median move was 1.0% on the reaction day and 1.7% by the next close, leaving HEG’s excess sector move at 3.8 percentage points and 0.9 percentage points, respectively.

Earlier reaction-day moves were mixed: HEG rose 3.9% on 22 July 2026 and 7.0% on 30 July 2025, while it fell 9.8% on 29 April 2026, 5.6% on 10 February 2026 and 6.4% on 19 May 2025. The stock also rose 2.2% on 10 November 2025 and 2.0% on 13 November 2024, and fell 2.3% on 11 February 2025.

How did other Electrodes & Refractories companies do?

Six other Electrodes & Refractories companies had filed for the quarter by 5 November 2026. Their median revenue growth was 7.6%; one grew more slowly than HEG and five grew faster than HEG. Of the six peers whose profit was compared, two reported higher profit.