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HEG Ltd. Investor Presentation 2024

Feb 20, 2024

61624_rns_2024-02-20_9a8e204c-c176-4935-98d4-da0746c73a7d.pdf

Investor Presentation

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HEG/SECTT/2024

20[th] February, 2024

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 & nine months ended 31[st] December, 2023.

Dear Sirs,

Please find enclosed a copy of Investors Presentation on the Unaudited Financial Results of the Company for the quarter & nine months ended 31[st] December, 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: 2024.02.20 18:45:45 +05'30'

Vivek Chaudhary Company Secretary A-13263 [email protected]

Encl: As above

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HEG LIMITED Investor Presentation

Performance Highlights Q3 of FY 2023-24

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

  • 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

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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 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

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

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HEG Ltd © LNJ Bhilwara Group

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TOP 10 Crude Steel - Producin Countries g

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Y-o-Y Comparision

Q-o-Q Comparision

Sr. No Country CY 23
CY 22
CY 23/22		 CY 23
CY 22
CY 23/22		 Q4'23
Q3'23
Q-o-Q		 Q4'23
Q3'23
Q-o-Q		 Q4'23
Q3'23
Q-o-Q
1
China		 1020.3
1019.1		 0.1% 222.6
259.3
(-14.1%)
2
India		 140.2
125.4
11.8%		 36.0
35.1
2.4%
3
Japan		 87.0
89.2
(-2.5%)		 21.6
21.6		 0.2%
4
United States		 80.7
80.5		 0.2% 20.1
20.7
(-3.2%)
5
Russia		 75.8
71.7
5.6%		 18.6
19.2
(-3.3%)
6
South Korea		 66.7
65.8
1.3%		 16.3
16.8
(-3.0%)
7
Germany		 35.4
36.9
(-3.9%)		 8.2
8.7
(-5.7%)
8
Turkey		 33.7
35.1
(-4.0%)		 9.2
8.6
6.8%
9
Brazil		 31.9
34.1
(-6.5%)		 7.9
8.0		 (-1.5%)
10
Iran		 31.1
30.6
1.8%		 9.1
5.9
52.6%
Source WSA World 1,888.2
1,888.7
(-0.0%)		 440.0
474.2
(-7.2%)
World ex china 868.0
869.7		 (-0.2%) 217.3
214.9		 1.1%

HEG Ltd © LNJ Bhilwara Group

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Steel Industr Outlook y

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  1. Global crude steel production remained unchanged in 2023 vs 2022 without any growth at 1.888 billion metric tons, as per Worldsteel data.

  2. India, ranked as the second-largest global steel producer, recorded a notable 11.8% increase in production, reaching 140.2 mmt.

  3. Steel industry production outside of China is constrained by subdued demand amid global economic uncertainty.

  4. The situation worsened with a surge in steel exports from China from 67.3 mmt in 2022 to 90.3 mmt in 2023.

  5. Growing geopolitical risks and inflation control efforts further burden economies in Europe and other developed regions.

  6. China's transition to Electric Arc Furnace (EAF) steel production stagnates, leading to an oversupply of Chinese electrodes and price decline.

  7. Expected initiatives for steel industry decarbonization are set to increase demand for graphite electrodes, driven by the adoption of EAF steelmaking , resulting in additional demand of 200,000 tons approx. by 2030 (excl China)

  8. The GE demand remained sluggish through the year and is likely to stagnate for another 2-3 quarters.

  9. However, considering the irreversible process of decarbonization, we are optimistic about the growth of GE demand in the medium to long run.

HEG Ltd © LNJ Bhilwara Group

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Financial Results for the Quarter ended 31[st] Dec 2023 - Standalone

(in Rs. cr)

Sl. No. Particulars Quarter Ended Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended Year Ended
31-12-2023 30-09-2023 31-12-2022 31-12-2023 31-12-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
I
II
III
IV
V
VI
VII		 Revenue from Operations 562.40 614.17 530.27 1,848.00 1,850.36 2,467.24
Other Income 23.22 28.02 36.89 77.36 77.79 109.14
Total Income (I+II) 585.62 642.19 567.16 1,925.36 1,928.15 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		 245.40
34.17
22.77
9.73
47.39
73.58
99.75
532.79		 304.41
(28.45)
22.99
8.53
38.48
78.41
134.36
558.73		 324.82
(141.64)
22.02
7.77
24.99
76.68
115.32
429.96		 858.21
0.56
69.61
27.11
124.21
236.63
342.40
1,658.73		 996.26
(349.33)
67.33
18.68
69.17
242.11
398.10
1,442.32		 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) 52.83 83.46 137.20 266.63 485.83 600.48
Exceptional Items - - - - - -
Profit before Tax(V-VI) 52.83 83.46 137.20 266.63 485.83 600.48

HEG Ltd © LNJ Bhilwara Group

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(in Rs. cr)

Financial Results for the Quarter ended 31[st] Dec 2023 - Standalone

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Sl. No. Particulars Quarter Ended Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended Year Ended
31-12-2023 30-09-2023 31-12-2022 31-12-2023 31-12-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
VII Profit before Tax(V-VI) 52.83 83.46 137.20 266.63 485.83 600.48
VIII
IX
X
XI
XII
XIII
XIV		 Tax expense
(1) Current Tax
(2)Deferred Tax		 11.31
4.44		 16.86
4.84		 37.58
(3.21)		 59.52
10.73		 126.04
(6.51)		 154.25
(9.29)
Profit for theperiod(VII-VIII) 37.08 61.76 102.83 196.38 366.30 455.51
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
-
-		 -
-
-
-		 (0.01)
0.00
-
-		 (0.36)
0.09
-
-		 (0.83)
0.21
-
-
Total Comprehensive Income for the period (IX+X) 37.08 61.75 102.83 196.37 366.03 454.89
Paid -Up Equity Share Capital ( Face Value Rs.10/- per share)
Other Equity
Earnings Per Share (₹) (Not annualised except for the year
ended March 31,2023)
- Basic (Rs.)
- Diluted(Rs.)		 38.60
9.61
9.61		 38.60
16.00
16.00		 38.60
26.64
26.64		 38.60
50.88
50.88		 38.60
94.91
94.91		 38.60
4038.63
118.02
118.02

HEG Ltd © LNJ Bhilwara Group

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Financial Results for the Quarter ended 31st Dec 2023 - Consolidated (in Rs. cr)

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Sl. No. Particulars Quarter Ended Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended Year Ended
31-12-2023 30-09-2023 31-12-2022 31-12-2023 31-12-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
I
II
III
IV
V
VI
VII
VIII
IX		 Revenue from Operations 562.40 614.17 530.27 1,848.00 1,850.36 2,467.24
Other Income 23.22 28.02 36.89 77.36 77.79 109.14
Total Income (I+II) 585.62 642.19 567.16 1,925.36 1,928.15 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		 245.40
34.17
22.85
9.73
47.39
73.58
99.76
532.88		 304.41
(28.45)
23.12
8.53
38.48
78.41
134.83
559.33		 324.82
(141.64)
22.02
7.77
24.99
76.68
116.27
430.91		 858.21
0.56
70.00
27.11
124.21
236.63
342.95
1,659.67		 996.26
(349.33)
67.33
18.68
69.17
242.11
399.05
1,443.26		 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) 52.74 82.86 136.25 265.69 484.89 599.22
Exceptional Items - - - - - -
Profit/(Loss) before Tax & Share of Profit/(Loss)of Associates
52.74		 82.86 136.25 265.69 484.89 599.22
Share of Profit/ (Loss) of Associates 6.68 34.82 2.81 83.32 67.28 78.11
Profit/(Loss) before Tax (VII+VIII) 59.42 117.68 139.06 349.01 552.17 677.33

HEG Ltd © LNJ Bhilwara Group

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Financial Results for the Quarter ended 31st Dec 2023 - Consolidated (in Rs. cr)

Sl. No. Particulars Quarter Ended Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended Year Ended
31-12-2023 30-09-2023 31-12-2022 31-12-2023 31-12-2022 31-03-2023
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
IX Profit/(Loss) before Tax (VII+VIII) 59.42 117.68 139.06 349.01 552.17 677.33
X
XI
XII
XIII
XIV
XV
XIV		 Tax expense
(1) Current Tax
(2)Deferred Tax		 11.31
4.44		 16.86
4.84		 37.58
(3.21)		 59.52
10.73		 126.04
(6.51)		 154.26
(9.29)
Profit for the period (IX-X) 43.67 95.98 104.69 278.76 432.64 532.36
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		 -
-
-
-
(0.07)		 (0.01)
0.00
-
-
(0.02)		 -
-
-
-
(0.01)		 (0.01)
0.00
-
-
(0.13)		 (0.36)
0.09
-
-
0.01		 (0.83)
0.21
-
-
(0.13)
Total Comprehensive Income for the period (XI+XII) 43.60 95.95 104.68 278.62 432.38 531.61
Paid -Up Equity Share Capital (Face Value Rs. 10/- per share)
Other Equity
Earnings Per Share (₹) (Not annualised except for the year
ended March 31,2023)
- Basic (Rs.)
- Diluted(Rs.)		 38.60
11.32
11.32		 38.60
24.87
24.87		 38.60
27.13
27.13		 38.60
72.22
72.22		 38.60
112.10
112.10		 38.60
4242.30
137.93
137.93

HEG Ltd © LNJ Bhilwara Group

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Financial Snapshot (Standalone)

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in Rs. cr (except EPS) in Rs. cr (except EPS) in Rs. cr (except EPS) in Rs. cr (except EPS) in Rs. cr (except EPS) in Rs. cr (except EPS)
PARTICULARS FY 23-24 FY
Q3 Q2 Q1 22-23 21-22 20-21
TOTAL INCOME 586 642 698 2576 2281 1369
EBITDA 110 130 178 729 607 54
EBIT 63 92 139 626 527 (19)
PAT 37 62 98 456 391 (25)
EPS 9.61 16.00 25.28 118.02 101.20 (6.56)
EBITDA Margin (%) 19% 20% 25% 28% 27% 4%
PAT Margin (%) 6% 10% 14% 18% 17% (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 investments in Associates & Wholly Owned Subsidiary

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: [email protected] [email protected]

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HEG Ltd © LNJ Bhilwara Group

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