HEG Ltd. — Interim / Quarterly Report 2023

Feb 20, 2023

HEG/SECTT/2023

20[th] February, 2023

1	BSE Limited 25thFloor, P J Towers Dalal Street MUMBAI - 400 001. Scrip Code : 509631	2	National Stock Exchange of India Limited Exchange Plaza, 5th Floor Plot No.C/1, G Block, Bandra - Kurla Complex Bandra (E),MUMBAI - 400 051. Scrip Code : HEG

Sub: Investors presentation on the Un-audited Financial Results of the Company for the quarter & nine months ended 31[st] December, 2022.

Dear Sirs,

Please find enclosed a copy of Investors Presentation on the Un-audited Financial Results of the Company for the quarter & nine months ended 31[st] December, 2022 for your information and record please.

The copy of same is also being uploaded on the website of the Company.

Thanking you,

Yours faithfully, For HEG Limited

VIVEK Digitally signed by VIVEK CHAUDHARY CHAUDHARY Date: 2023.02.20 11:11:59 +05'30'

Vivek Chaudhary Company Secretary A-13263 heg.investor@lnjbhilwara.com

Encl: As above

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HEG LIMITED Investor Presentation-Q3 FY23 20[th] Feb, 2023

Graphite Electrode (GE)

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• A consumable for Electric Arc Furnaces (EAF) for Steel production

• Used as electrical conductors in Electric Arc Furnaces to generate heat to melt steel scrap

• High-tech / High Entry Barrier – HEG the last new entrant in the world -1976

• EAF Steel emits one fourth carbon in the environment as compared to same Steel produced by traditional Blast Furnaces

• World production of Steel through EAF (w/o China) has gone up from 47% to 49% of total Steel - while China’s production through EAF Steel is around 11% and is likely to go up to around 15-20% by 2025

HEG Ltd © LNJ Bhilwara Group

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HEG Limited – Unique Strengths

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• Has been World’s Largest Single Site Graphite Electrode Plant under one roof with a capacity of 80,000 tons pa

• On the verge of completing expansion to 100,000 tons in next 2 - 3 months (part of the new capacity already commissioned)

• Except ours, no additional capacity announced by any other company

• Exporting approx 65 - 70% of its production to about 35 countries around the world consistently since more than 20 years

• Diversified customer base - supplying large portion of production to top 20 steel companies of the world

• Captive power generation capacity of around 80 mw (Two thermal power plants & One hydro power plant)

HEG Ltd © LNJ Bhilwara Group

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HEG Limited - Plant View

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HEG Ltd © LNJ Bhilwara Group

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Crude Steel Production Annual Growth Trend (%)

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China Rest of worl d World 13.1
7.8 7.9
6.6
6.3
5.2
5.2
3.9
3.0
4.9
3.8
0.5 0.6
0
-2.2 -2.2
-2.1 -0.9
-3.1
-2.9
-4.4
-3.8
-7.0
Source :WSA
-7.7
2015 2016 2017 2018 2019 2020 2021 2022
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HEG Ltd © LNJ Bhilwara Group

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TOP 10 CRUDE STEEL-PRODUCING COUNTRIES- 2022 vs 2021 (12 months)

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2021/2022

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Sr. No Country CY 21 (mmt) CY 22 (mmt) Change 2021/2022
1 China 1033.7 1010.8 -22.9 -2.2%
2 Iran 28.3 30.6 2.3 8.0%
Subtotal 1062.0 1041.4 -20.6 -1.9%
3 India 118.2 124.7 6.5 5.5%
4 Japan 96.3 89.2 -7.1 -7.4%
5 United States 85.8 80.7 -5.1 -5.9%
6 Russia 77.0 71.5 -5.5 -7.2%
7 South Korea 70.4 65.9 -4.6 -6.5%
8 Germany 40.2 36.8 -3.4 -8.4%
9 Turkey 40.4 35.1 -5.2 -12.9%
10 Brazil 36.1 34.0 -2.1 -5.8%
Subtotal 564.4 538.0 -26.5 -4.7%
Source WSA World 1913.4 1829.3 -84.1 -4.4%
World ex (China+Iran) 851.4 787.9 -63.5 -7.5%
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HEG Ltd © LNJ Bhilwara Group

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TOP 10 CRUDE STEEL-PRODUCING COUNTRIES- Q4’2022 vs Q3’2022 (3 months)

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Q3/Q4

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Sr. No Country Jul-Sep22 (mmt) Oct-Dec22 (mmt) Change Q3/Q4
1 China 252.3 232.2 -20.1 -8.0%
2 Iran 6.8 8.4 1.6 23.0%
Subtotal 259.1 240.6 -18.5 -7.1%
3 India 30.0 31.4 1.4 4.7%
4 Japan 21.8 21.4 -0.4 -1.8%
5 United States 20.4 19.3 -1.1 -5.5%
6 Russia 17.5 16.9 -0.6 -3.3%
7 South Korea 16.7 15.2 -1.5 -9.0%
8 Germany 8.7 8.6 -0.1 -1.0%
9 Turkey 8.3 7.9 -0.4 -4.7%
10 Brazil 8.4 8.0 -0.4 -4.6%
Subtotal 131.9 128.8 -3.1 -2.3%
Source WSA World 449.8 426.4 -23.4 -5.2%
World ex (China+Iran) 190.8 185.8 -4.9 -2.6%
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HEG Ltd © LNJ Bhilwara Group

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World Crude Steel Production Quarters wise ( CY 15 – 22)

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China World Excl. China
292 -17%
284
280
275
272
270
246 252
249
244
232 234 232
227
218 216
201 224 224
218 219 217 220
212 209 211 214 213
205 206
198
190 194
-9%
167
Jan 19 to Dec 19
CY15 CY16 CY17 CY18 CY19 Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec
Avg Qtr Avg Qtr Avg Qtr Avg Qtr Avg QtrJan 19 to Dec 19 Jan 20 to Jun 202022
2020 2021
Production (mmt)
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HEG Ltd © LNJ Bhilwara Group

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ROW EAF Steel Production Quarters wise ( CY 15 – 22)

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World Excl. China
Highest Ever
-9%
110
108
107
106
105
105 104
102
100 99
98
96 97 97
95
90
79
above mentioned EAF
Steel data fig. are our
estimates after
considering 49% of
crude steel production
through EAF route.
CY15 CY16 CY17 CY18 Jan 19 to Dec 19CY19 Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec.
Avg Qtr Avg Qtr Avg Qtr Avg Qtr Avg QtrJan 19 to Dec 19 Jan 20 to Jun 20
EAF STEEL Production (mmt)
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2020 C2021

2022

HEG Ltd © LNJ Bhilwara Group

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Graphite Electrode (GE)– Demand Trend

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• As World Steel Association Global Electric Arc Furnace Steel at a per (WSA), (EAF) production grew

• 4% CAGR between 2015 to 2022 (w/o China)

• EAF Steel production accounted for 49% in 2022 as compared to 44% in 2015 (w/o China)

• EAF Steel production emits 1/4[th] carbon as compared to similar Steel produced through BOF, leading to more and more Steel production through EAF in the future

• Based on various recent announcements coming from US and Europe, we expect EAF Steel capacity to keep increasing by about 3.5%- 4% CAGR between 2023-2030 (w/o China)

• Based on estimated EAF Steel production of 400 mmt in 2022 (w/o China) and considering a CAGR of around 3.5%, we expect EAF Steel production to grow to 527 mmt by 2030

• This would mean an additional demand of about 200,000 tons of UHP Electrodes worldwide

HEG Ltd © LNJ Bhilwara Group

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HEG Ltd © LNJ Bhilwara Group

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(in Rs. cr)

Financial Results for the Quarter ended 31[st] Dec 2022 Standalone

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Sl. No.	Particulars	Quarter Ended	Quarter Ended	Quarter Ended	Nine Months Ended	Nine Months Ended	Year Ended
		31-12-2022	30-09-2022	31-12-2021	31-12-2022	31-12-2021	31-03-2022
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
I II III IV V VI VII	Revenue from Operations	530.27	598.14	597.30	1,850.36	1,528.55	2,201.61
	Other Income	36.89	19.57	14.74	77.79	62.15	79.55
	Total Income (I+II)	567.16	617.71	612.04	1,928.15	1,590.70	2281.16
	Expenses Cost of materials consumed Changes in inventories of finished goods, work-in- progress and stock-in-trade Employee benefits expense Finance cost Depreciation and amortisation expense Power and Fuel Other Expenses Total expenses	324.81 (141.64) 22.02 7.77 24.99 76.68 115.33 429.96	340.51 (159.89) 22.14 6.88 23.17 79.85 136.74 449.40	274.25 (60.64) 21.22 4.17 21.05 76.38 130.11 466.54	996.25 (349.33) 67.33 18.68 69.17 242.11 398.10 1,442.31	626.15 (41.16) 60.44 6.49 57.90 193.40 319.38 1,222.60	940.42 (111.41) 80.00 7.49 79.29 271.11 494.26 1761.16
	Profit/(Loss) before exceptional items and tax (III-IV)	137.20	168.31	145.50	485.84	368.10	520.00
	Exceptional Items	-	-	-	-	-	-
	Profit/(Loss) before Tax (V-VI)	137.20	168.31	145.50	485.84	368.10	520.00

HEG Ltd © LNJ Bhilwara Group

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(in Rs. cr)

Financial Results for the Quarter ended 31[st] Dec 2022 Standalone

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Sl. No.	Particulars	Quarter Ended	Quarter Ended	Quarter Ended	Nine Months Ended	Nine Months Ended	Year Ended
		31-12-2022	30-09-2022	31-12-2021	31-12-2022	31-12-2021	31-03-2022
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
VII	Profit/(Loss) before Tax (V-VI)	137.20	168.31	145.50	485.84	368.10	520.00
VIII IX X XI XII XIII XIV	Tax expense (1) Current Tax (2) Deferred Tax	37.58 (3.21)	33.16 5.25	37.30 (0.31)	126.04 (6.51)	90.52 0.25	129.56 (0.14)
	Profit/(Loss) for the period (VII-VIII)	102.83	129.90	108.51	366.31	277.33	390.58
	Other Comprehensive Income A (i) Items that will not be reclassified to profit or loss (ii) Income tax relating to items that will not be reclassified to profit or loss B (i) Items that will be reclassified to profit or loss (ii) Income tax relating to items that will be reclassified to profit or loss	- - - -	(0.36) 0.09 - -	- - - -	(0.36) 0.09 - -	(0.64) 0.16 - -	(1.23) 0.31 - -
	Total Comprehensive Income for the period (IX+X)	102.83	129.63	108.51	366.04	276.85	389.66
	Paid -Up Equity Share Capital (Face Value Rs.10/- per share) Other Equity (Excluding Revaluation Reserves) Earnings Per Share (₹) (not annualised) - Basic (Rs.) - Diluted (Rs.)	38.60 26.64 26.64	38.60 33.66 33.66	38.60 28.11 28.11	38.60 94.91 94.91	38.60 71.86 71.86	38.60 3738.12 101.20 101.20

HEG Ltd © LNJ Bhilwara Group

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Financial Results for the Quarter ended 31[st] Dec 2022 Consolidated

(in Rs. cr)

Sl. No.	Particulars	Quarter Ended	Quarter Ended	Quarter Ended	Nine Months Ended	Nine Months Ended	Year Ended
		31-12-2022	30-09-2022	31-12-2021	31-12-2022	31-12-2021	31-03-2022
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
I II III IV V VI VII VIII IX	Revenue from Operations	530.27	598.14	597.30	1,850.36	1,528.55	2,201.61
	Other Income	36.89	19.57	14.74	77.79	62.15	79.55
	Total Income(I+II)	567.16	617.71	612.04	1,928.15	1,590.70	2,281.16
	Expenses Cost of materials consumed Changes in inventories of finished goods, work-in- progress and stock-in-trade Employee benefits expense Finance cost Depreciation and amortisation expense Power and Fuel Other Expenses Total expenses	324.81 (141.64) 22.02 7.77 24.99 76.68 116.27 430.90	340.51 (159.89) 22.14 6.88 23.17 79.85 136.74 449.40	274.25 (60.64) 21.22 4.17 21.05 76.38 130.11 466.54	996.25 (349.33) 67.33 18.68 69.17 242.11 399.05 1,443.26	626.15 (41.16) 60.44 6.49 57.90 193.40 319.38 1,222.60	940.42 (111.41) 80.00 7.49 79.29 271.11 494.26 1761.16
	Profit/(Loss) before exceptional items and tax(III-IV)	136.26	168.31	145.50	484.89	368.10	520.00
	Exceptional Items	-	-	-	-	-	-
	Profit/(Loss) before Tax & Share ofprofit/loss of Associates	( 136.26	168.31	145.50	484.89	368.10	520.00
	Share of Profit/(loss) of associates	2.81	39.04	4.97	67.28	24.45	40.47
	Profit/(Loss) before Tax(VII+VIII)	139.07	207.35	150.47	552.17	392.55	560.47

HEG Ltd © LNJ Bhilwara Group

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Fina	ncial Results for the Quarter ended 31st Dec 2022 Consolidated (in Rs. cr)	ncial Results for the Quarter ended 31st Dec 2022 Consolidated (in Rs. cr)	ncial Results for the Quarter ended 31st Dec 2022 Consolidated (in Rs. cr)	ncial Results for the Quarter ended 31st Dec 2022 Consolidated (in Rs. cr)	ncial Results for the Quarter ended 31st Dec 2022 Consolidated (in Rs. cr)	ncial Results for the Quarter ended 31st Dec 2022 Consolidated (in Rs. cr)	ncial Results for the Quarter ended 31st Dec 2022 Consolidated (in Rs. cr)
Sl. No.	Particulars	Quarter Ended			Nine Months Ended		Year Ended
		31-12-2022	30-09-2022	31-12-2021	31-12-2022	31-12-2021	31-03-2022
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
IX	Profit/(Loss) before Tax(VII+VIII)	139.07	207.35	150.47	552.17	392.55	560.47
X XI XII XIII XIV XV XVI	Tax expense (1) Current Tax (2)Deferred Tax	37.58 (3.21)	33.16 5.25	37.30 (0.31)	126.04 (6.51)	90.52 0.25	129.56 (0.14)
	Net Profit/(Loss) for the period (IX-X)	104.70	168.93	113.48	432.64	301.78	431.05
	Other Comprehensive Income A (i) Items that will not be reclassified to profit or loss (ii) Income tax relating to items that will not be reclassified to profit or loss B (i) Items that will be reclassified to profit or loss (ii) Income tax relating to items that will be reclassified to profit or loss C. Share of Other comprehensive Income of Associates	- - - - (0.01)	(0.36) 0.09 - - -	- - - - 0.06	(0.36) 0.09 - - 0.01	(0.64) 0.16 - - 0.15	(1.23) 0.31 - - 0.01
	Total Comprehensive Income for the period (XI+XII)	104.69	168.66	113.54	432.38	301.45	430.14
	Paid -Up Equity Share Capital ( Face Value Rs.10/- per share) Other Equity (Excluding Revaluation Reserves) Earnings Per Share (₹) (not annualised) - Basic (Rs.) - Diluted (Rs.)	38.60 27.13 27.13	38.60 43.77 43.77	38.60 29.40 29.40	38.60 112.10 112.10	38.60 78.19 78.19	38.60 3,875.04 111.68 111.68

Financial Results for the Quarter ended 31[st] Dec 2022 Consolidated

HEG Ltd © LNJ Bhilwara Group

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Financial Snapshot (Standalone)

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in Rs. cr (except EPS)

PARTICULARS	FY 22-23	FY 22-23	FY 22-23	FY	FY	FY
	Q3	Q2	Q1	21-22	20-21	19-20
TOTAL INCOME	567	618	743	2281	1369	2293
EBITDA	170	198	205	607	54	138
EBIT	145	175	184	527	(19)	66
PAT	103	130	134	391	(25)	53
EPS	26.64	33.66	34.61	101.20	(6.56)	13.83
EBITDA Margin (%)	30%	32%	28%	27%	4%	6%
PAT Margin (%)	18%	21%	18%	17%	(2%)	2%

HEG Ltd © LNJ Bhilwara Group

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Quarterly Performance (Standalone)

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HEG Ltd © LNJ Bhilwara Group

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Investments and Borrowings (Standalone)

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• Investments including Cash & Cash equivalents and excluding investment in Associates

HEG Ltd © LNJ Bhilwara Group

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Thank You

Mr.Manish Gulati : Executive Director : Mr.Om Prakash Ajmera Group CFO Mr.Gulshan Kr.Sakhuja : CFO HEG Limited Ph: +91 9910103865 Fax: +91 120 254 1575 Email: Manish.gulati@lnjbhilwara.com Gulshan.sakhuja@lnjbhilwara.com

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HEG Ltd © LNJ Bhilwara Group

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