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HEG Ltd. Investor Presentation 2023

Nov 15, 2023

61624_rns_2023-11-15_aa356fb8-dece-4427-91a1-5454ad2605df.pdf

Investor Presentation

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HEG/SECTT/2023 15[th] November, 2023

1 BSE Limited
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 Unaudited Financial Results of the Company for the quarter & half year ended 30[th] September, 2023.

Dear Sir/Madam,

Please find enclosed a copy of Investors Presentation on the Unaudited Financial Results of the Company for the quarter & half year ended 30[th] September, 2023 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: 2023.11.15 18:13:24 +05'30'

(Vivek Chaudhary) Company Secretary M.No. A-13263

[email protected]

Encl. as above

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HEG LIMITED Investor Presentation

Performance Highlights Q2 of FY 2023-24

Graphite Electrode (GE)

==> picture [346 x 311] intentionally omitted <==

  • 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

  • As per World Steel Association EAF Steel production (w/o China) has gone up from 44% to 49% between 2015 - 2022 - while China’s production through EAF is around 11% and is likely to go upto around 15-20% by 2025

HEG Ltd © LNJ Bhilwara Group

2

HEG Limited – Unique Strengths

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

  • Recently completed expansion to 100,000 tons to become the third largest producer of Graphite electrodes in the western world.

  • Except ours, no additional capacity announced by any other company in the western world.

  • 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

3

Expanded plant at 100,000 tons now complete - Appearing on the horizon

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HEG Ltd © LNJ Bhilwara Group

4

TOP 10 Crude Steel - Producin Countries g

Y-o-Y Comparision
Q-o-Q Comparision		 Y-o-Y Comparision
Q-o-Q Comparision		 Y-o-Y Comparision
Q-o-Q Comparision		 Y-o-Y Comparision
Q-o-Q Comparision		 Y-o-Y Comparision
Q-o-Q Comparision		 Y-o-Y Comparision
Q-o-Q Comparision
Sr. No
Country		 July-Sep'23
Apr-June'23
Q-o-Q		 Jan-Sep'23
Jan-Sep'22
2023/2022
1
China		 259.3
273.9
(-5.3%)		 797.6
783.5
1.8%
2
India		 35.1
35.0		 0.2% 104.1
93.3
11.6%
3
Japan		 21.6
22.2
(-3.0%)		 65.4
67.8
(-3.6%)
4
United States		 20.7
20.4		 1.3% 60.6
61.4		 (-1.4%)
5
Russia		 5.9
9.5
(-37.3%)		 57.1
54.6
4.8%
6
South Korea		 16.8
17.0		 (-1.5%) 50.4
50.7		 (-0.4%)
7
Germany		 8.7
9.4
(-7.1%)		 27.2
28.2
(-3.6%)
8
Iran		 19.2
19.2
(-0.2%)		 22.1
22.2		 (-0.6%)
9
Brazil		 8.1
8.1		 (-0.4%) 24.0
26.0
(-8.0%)
10
Turkey		 8.6
8.5		 0.9% 24.5
26.0
(-6.0%)
Source WSA
World		 460.8
483.1
(-4.6%)		 1,408.9
1,407.0
0.1%

HEG Ltd © LNJ Bhilwara Group

5

Demand Forecasts, Short Range Outlook – Oct’23 Demand Forecasts, Short Range Outlook – Oct’23 Demand Forecasts, Short Range Outlook – Oct’23 Source WSA
2022
2023 (f)
2024 (f)
1,265.3
1,298.3
1,314.9
152.0
144.3
152.7
132.9
134.1
136.1
39.2
45.0
47.3
51.6
54.6
55.2
57.1
56.1
57.9
44.9
44.2
45.1
39.5
37.9
39.9
1,782.5
1,814.5
1,849.1
374.7
368.2
378.4
486.8
507.0
531.4
920.9
939.3
939.3
116.2
126.1
135.8
72.6
75.3
79.2
76.6
74.0
76.6
861.6
875.2
909.8
million tonnes		 Y-o-Y growth %
Regions 2022
2023 (f)
2024 (f)		 2022
2023 (f)
2024 (f)
Asia and Oceania
European Union (27) & United Kingdom
USMCA
Other Europe
Russia & other CIS + Ukraine
Middle East
Central and South America
Africa		 1,265.3
1,298.3
1,314.9
152.0
144.3
152.7
132.9
134.1
136.1
39.2
45.0
47.3
51.6
54.6
55.2
57.1
56.1
57.9
44.9
44.2
45.1
39.5
37.9
39.9		 -2.7
2.6
1.3
-7.8
-5.1
5.8
-3.0
0.9
1.5
-2.5
14.9
5.1
-12.0
5.8
1.0
7.7
-1.7
3.2
-11.5
-1.6
2.2
0.8
-4.1
5.4
World 1,782.5
1,814.5
1,849.1		 -3.3
1.8
1.9
Developed Economies
China
Em. and Dev. Economies excl. China
India
ASEAN (5)
MENA		 374.7
368.2
378.4
486.8
507.0
531.4
920.9
939.3
939.3
116.2
126.1
135.8
72.6
75.3
79.2
76.6
74.0
76.6		 -6.4
-1.8
2.8
-0.6
4.1
4.8
-3.5
2.0
0.0
9.3
8.6
7.7
-0.2
3.8
5.2
9.4
-3.5
3.5
ROW except China 861.6
875.2
909.8		 -3.2
1.6
4.0

HEG Ltd © LNJ Bhilwara Group

6

Steel Industr Outlook y

  1. Steel demand has been impacted by high inflation and interest rates globally.

  2. Steel-using sectors experienced a significant slowdown in the second half of 2022 due to weakened investment and consumption. This trend continued into 2023, particularly affecting the EU and the US.

  3. Advanced economies are expected to have a slow steel demand recovery in 2024, while emerging economies, particularly in Asia, are showing resilience.

  4. Regional conflicts and unrest, like those in Russia, Ukraine, Israel, and Palestine, pose downside risks, potentially impacting steel demand.

  5. Despite high interest rates affecting construction, infrastructure investment remains positive in many regions, driven by decarbonization efforts.

  6. Manufacturing sectors have been slowing down, but the automotive industry is expected to recover in 2023 due to order backlogs and improved supply chain conditions.

  7. Steel demand in 2023 is projected to grow by 2.0%, supported by infrastructure investments and property sector stabilization, with 2024 remaining uncertain due to potential negative factors.

HEG Ltd © LNJ Bhilwara Group

7

I
Revenue from Operations
II
Other Income
III
Total Income (I+II)
IV
Expenses
Cost of materials consumed
Changes in inventories of finished goods, work-in- progress
Employee benefits expense
Finance cost
Depreciation and amortisation expense
Power and Fuel
Other Expenses
Total expenses
V
Profit before exceptional items and tax (III-IV)
VI
Exceptional Items
VII
Profit before Tax (V-VI)
Sl. No.
Particulars
Financial Results for the Quarter and Half year		 I
Revenue from Operations
II
Other Income
III
Total Income (I+II)
IV
Expenses
Cost of materials consumed
Changes in inventories of finished goods, work-in- progress
Employee benefits expense
Finance cost
Depreciation and amortisation expense
Power and Fuel
Other Expenses
Total expenses
V
Profit before exceptional items and tax (III-IV)
VI
Exceptional Items
VII
Profit before Tax (V-VI)
Sl. No.
Particulars
Financial Results for the Quarter and Half year		 I
Revenue from Operations
II
Other Income
III
Total Income (I+II)
IV
Expenses
Cost of materials consumed
Changes in inventories of finished goods, work-in- progress
Employee benefits expense
Finance cost
Depreciation and amortisation expense
Power and Fuel
Other Expenses
Total expenses
V
Profit before exceptional items and tax (III-IV)
VI
Exceptional Items
VII
Profit before Tax (V-VI)
Sl. No.
Particulars
Financial Results for the Quarter and Half year		 ended 30th Sep 2023 Standalone(in Rs. cr) ended 30th Sep 2023 Standalone(in Rs. cr) ended 30th Sep 2023 Standalone(in Rs. cr) ended 30th Sep 2023 Standalone(in Rs. cr) ended 30th Sep 2023 Standalone(in Rs. cr) ended 30th Sep 2023 Standalone(in Rs. cr)
Sl. No. Particulars Quarter Ended Half Year Ended Year Ended
30-09-2023 30-06-2023 30-09-2022 30-09-2023 30-09-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
I
II
III
IV
V
VI
VII		 Revenue from Operations 614.17 671.43 598.14 1,285.60 1,320.09 2,467.24
Other Income 28.02 26.12 19.57 54.14 40.90 109.14
Total Income (I+II) 642.19 697.55 617.71 1,339.74 1,360.99 2576.38
Expenses
Cost of materials consumed
Changes in inventories of finished goods, work-in- progress
Employee benefits expense
Finance cost
Depreciation and amortisation expense
Power and Fuel
Other Expenses
Total expenses		 304.41
(28.45)
22.99
8.53
38.48
78.41
134.36
558.73		 308.40
(5.16)
23.84
8.85
38.34
84.63
108.30
567.20		 340.51
(159.89)
22.14
6.88
23.17
79.85
136.74
449.40		 612.81
(33.61)
46.84
17.38
76.82
163.04
242.65
1,125.93		 671.45
(207.68)
45.30
10.91
44.17
165.43
282.78
1,012.36		 1,312.64
(397.49)
91.83
26.01
102.30
315.90
524.71
1975.90
Profit before exceptional items and tax (III-IV) 83.46 130.35 168.31 213.81 348.63 600.48
Exceptional Items - - - - - -
Profit before Tax (V-VI) 83.46 130.35 168.31 213.81 348.63 600.48

HEG Ltd © LNJ Bhilwara Group

8

Sl. No. Particulars Quarter Ended Quarter Ended Quarter Ended Half Year Ended Half Year Ended Year Ended
30-09-2023 30-06-2023 30-09-2022 30-09-2023 30-09-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
VII Profit before Tax (V-VI) 83.46 130.35 168.31 213.81 348.63 600.48

VIII
IX
X
XI
XII
XIII
XIV		 Tax expense
(1) Current Tax
(2)Deferred Tax		 16.86
4.84		 31.34
1.45		 33.16
5.25		 48.20
6.29		 88.47
(3.30)		 154.25
(9.29)
Profit for the period (VII-VIII) 61.76 97.56 129.90 159.32 263.46 455.51
Other Comprehensive Income
A (i) Items that will not be classified to profit or loss
- Remeasurement of Employee Defined Benefit Plan
(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
toprofit or loss		 (0.01)
0.00
-
-		 -
-
-
-		 (0.36)
0.09
-
-		 (0.01)
0.00
-
-		 (0.36)
0.09
-
-		 (0.83)
0.21
-
-
Total Comprehensive Income for the period (IX+X) 61.75 97.56 129.63 159.31 263.19 454.89

Paid -Up Equity Share Capital ( Face Value Rs.10/- per share)
Other Equity
Earnings Per Share (Rs.) (Not annualised except for
the year ended March 31,2023)
- Basic (Rs.)
- Diluted (Rs.)		 38.60
16.00
16.00		 38.60
25.28
25.28		 38.60
33.66
33.66		 38.60
41.28
41.28		 38.60
68.26
68.26		 38.60
4038.63
118.02
118.02
HEG Ltd © LNJ Bhilwara Group

Financial Results for the Quarter and Half year ended 30[th] Sep 2023 Consolidated (in Rs.cr)

Sl. No. Particulars Quarter Ended Quarter Ended Quarter Ended Half Year Ended Half Year Ended Year Ended
30-09-2023 30-06-2023 30-09-2022 30-09-2023 30-09-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
I
II
III
IV
V
VI
VII
VIII
IX		 Revenue from Operations 614.17 671.43 598.14 1,285.60 1,320.09 2,467.24
Other Income 28.02 26.12 19.57 54.14 40.90 109.14
Total Income(I+II) 642.19 697.55 617.71 1,339.74 1,360.99 2576.38
Expenses
Cost of materials consumed
Changes in inventories of finished goods, work-in- progress
Employee benefits expense
Finance cost
Depreciation and amortisation expense
Power and Fuel
Other Expenses
Total expenses		 304.41
(28.45)
23.12
8.53
38.48
78.41
134.83
559.33		 308.40
(5.16)
24.03
8.85
38.34
84.63
108.36
567.46		 340.51
(159.89)
22.14
6.88
23.17
79.85
136.74
449.40		 612.81
(33.61)
47.15
17.38
76.82
163.04
243.19
1,126.79		 671.45
(207.68)
45.30
10.91
44.17
165.43
282.78
1,012.36		 1,312.64
(397.49)
92.05
26.01
102.30
315.90
525.73
1977.16
Profit before exceptional items and tax(III-IV) 82.86 130.10 168.31 212.95 348.63 599.22
Exceptional Items - - - - - -
Profit before Tax & Share of Profit of Associates(V-VI) 82.86 130.10 168.31 212.95 348.63 599.22
Share of Profit of Associates 34.82 41.82 39.04 76.64 64.47 78.11
Profit before Tax(VII+VIII) 117.68 171.92 207.35 289.60 413.10 677.33

HEG Ltd © LNJ Bhilwara Group

10

Financial Results for the Quarter and Half year ended 30[th] Sep 2023 Consolidated (in Rs.cr)

Sl. No. Particulars Quarter Ended Quarter Ended Quarter Ended Half Year Ended Half Year Ended Year Ended
30-09-2023 30-06-2023 30-09-2022 30-09-2023 30-09-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
IX Profit before Tax(VII+VIII) 117.68 171.92 207.35 289.60 413.10 677.33

X
XI
XII
XIII
XIV
XV
XVI		 Tax expense
(1) Current Tax
(2)Deferred Tax		 16.86
4.84		 31.34
1.45		 33.16
5.25		 48.20
6.29		 88.47
(3.30)		 154.26
(9.29)
Profit for theperiod(IX-X) 95.98 139.12 168.93 235.11 327.92 532.36
Other Comprehensive Income
A (i) Items that will not be classified to profit or loss
- Remeasurement of Employee Defined Benefit Plan
(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)
0.00
-
-
(0.02)		 -
-
-
-
(0.04)		 (0.36)
0.09
-
-
0.00		 (0.01)
0.00
-
-
(0.06)		 (0.36)
0.09
-
-
0.02		 (0.83)
0.21
-
-
(0.13)
Total Comprehensive Income for the period (XI+XII) 95.95 139.08 168.66 235.04 327.67 531.61
~~© hl~~
Paid -Up Equity Share Capital ( Face Value Rs.10/- per share)
Other Equity
Earnings Per Share (Rs.) (Not annualised except
for the year ended March 31,2023)
- Basic (Rs.)
- Diluted (Rs.)		 38.60
24.87
24.87		 38.60
36.05
36.05		 38.60
43.77
43.77		 38.60
60.92
60.92		 38.60
84.96
84.96		 38.60
4242.30
137.93
137.93
~~HEG Ltd LNJ Biwara Group~~

Financial Snapshot (Standalone)

in Rs. cr (except EPS)

PARTICULARS FY 23-24 FY 23-24 FY FY FY
Q2 Q1 22-23 21-22 20-21
TOTAL INCOME 642 698 2576 2281 1369
EBITDA 130 178 729 607 54
EBIT 92 139 626 527 (19)
PAT 62 98 456 391 (25)
EPS 16.00 25.28 118.02 101.20 (6.56)
EBITDA Margin (%) 20% 25% 28% 27% 4%
PAT Margin (%) 10% 14% 18% 17% (2%)

HEG Ltd © LNJ Bhilwara Group

12

Quarterly Performance (Standalone)

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HEG Ltd © LNJ Bhilwara Group

13

Investments and Borrowings (Standalone)

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  • Investments including Cash & Cash equivalents and excluding investments in Associates & Wholly Owned Subsidiary

HEG Ltd © LNJ Bhilwara Group

14

Thank You

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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: [email protected] [email protected]

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HEG Ltd © LNJ Bhilwara Group

15

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