HEG's Green Pivot: Shareholder Goldmine?

HEG Ltd, a top graphite electrode maker, runs the world's largest single-site plant at 100,000 tons capacity in India, exporting 65-70% to 35 countries. It's diversifying into EV batteries via HEG Greentech demerger, expected by April 2026, unlocking lithium-ion anode and BESS value. ​ Strong Financial Surge H1 FY26 revenue grew 15.5% to Rs 1,316 crore at 90%+ utilization. PAT jumped 136% to Rs 248 crore, margins up 500 bps to 17%. Q1 FY26 alone saw consolidated PAT soar 355% YoY to Rs 105 crore on 8% revenue rise. ​ EV Battery Upside HEG Greentech targets graphite anode production from 2027 (35-40% margins), serving non-China demand for 150-160 GWh by 2030. BESS EPC capacity hits 6 GWh by Q1 FY27, plus solar+BESS projects up to 2,000 MWh. This taps 3x global Li-ion growth to 4,700 GWh by 2030. ​ Electrode Expansion Boost Core business expands to 115,000 tons by 2028 (Rs 650 crore capex via accruals/debt), riding EAF steel shift adding 200,000 tons demand. Low-cost edge beats China amid supply curbs. ​ Demerger Value Unlock Splitting unlocks Greentech's high-ROCE potential (20%+), boosting focus and multiples. EV tailwinds from India's 500 GW renewables and 7.3% EV penetration enhance growth. ​ Valuation and Risks At 18.3x EV/EBITDA (premium to 9.4x median), it reflects growth but trails peers on returns (RoCE 4%, RoE 2.6%). Execution risks in new tech exist, yet Q1 stock jumped 12% on results. ​ This pivot massively benefits shareholders via profit surge, diversification, and demerger value—far outweighing capex risks in booming EV/green steel markets.