HEG Share Price Jumps 14% on Capex Plans, Demand Boost; Graphite Stocks Shine Despite Weak Market

On July 31, 2025, HEG share price (NSE: HEG) soared 14.35% to ₹610.90, while Graphite India share (NSE: GRAPHITE) rose 6% to ₹586, even as the broader Sensex fell 0.70%. HEG shares touched a high of ₹612 during the day, nearing its 52-week peak of ₹619.50.

Why HEG Is Rising: Better Q1 FY26 Earnings and Expansion Plans

HEG reported a rise in revenue in Q1FY26, mainly due to a 6% quarter-on-quarter increase in graphite electrode prices, assuming 85% capacity utilisation. However, margins dropped slightly due to higher raw material, power, and fuel costs.

The company also announced a ₹650 crore capex to add 15,000 TPA capacity over the next 30 months. This move aims to meet growing global demand for graphite electrodes.

Industry-Wide Capacity Crunch Aids Sentiment

HEG’s announcement comes at a time when several global graphite electrode plants have shut down, removing 1.2 lakh tons of capacity, or 16% of global supply (excluding China and Russia). This has improved the demand-supply outlook.

Demand Boost from Steel and EV Sectors

Graphite electrodes are key components used in electric arc furnace (EAF) steelmaking, a cleaner method of steel production. As the world moves towards low-carbon steel, demand for electrodes is expected to rise.

By 2030, 170–180 million tons of EAF steel capacity (excluding China) may be added, leading to an extra 200,000 tons of graphite electrode demand.

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Entry into EV Battery Space

HEG is also entering the graphite anode market used in lithium-ion batteries. Currently, India depends on China for this material, but domestic demand could rise to 1–1.4 lakh tons by 2030. HEG plans to tap into this market with local production.

Conclusion

HEG’s strong Q1 performance, expansion strategy, and entry into the EV supply chain have boosted investor confidence. With global demand rising and supply tightening, the outlook for graphite electrode makers like HEG and Graphite India appears strong.

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