HEG: Quiet Giant Behind EV Steel Surge

, a leading Indian graphite electrode maker, plays a crucial role in the electric vehicle (EV) and clean steel ecosystem. Graphite electrodes are essential for electric arc furnace (EAF) steelmaking, a cleaner alternative to traditional methods and a key component in EV-grade steel. Over 70% of HEG’s revenue comes from exports, including around 17% from the US. With China imposing curbs on graphite exports and anti-dumping duties in key markets, global supply chains are disrupted. This has increased demand for Indian players like HEG, triggering a sharp 30% stock rally in late 2024. In Q1 FY26, HEG returned to profit with higher revenue and improved margins. It also announced a ₹650 crore expansion to add 15,000 tonnes of electrode capacity over 30 months. This positions HEG to meet rising global demand amid consolidation and shutdowns in the industry. HEG is also preparing to enter the battery-grade graphite anode space, supported by India’s ₹9,000 crore PLI scheme for EV battery components. This move could reduce India’s import dependence and place HEG directly in the EV battery supply chain. For shareholders, this strategy offers both promise and risk. On the positive side, strong global demand, government incentives, and HEG’s expansion plan support future growth. Its debt-free status and strong liquidity further strengthen its position. However, graphite remains a cyclical business, exposed to global steel trends and raw material volatility. The stock’s rapid rise could invite short-term corrections, and success in battery anodes is not guaranteed. Still, HEG’s role in clean steel and battery materials makes it a compelling, though not risk-free, bet for long-term investors aligned with India’s EV and energy transition.