HEG’s Capacity Utilisation and Volume Growth Drive Strong Q3FY26 Performance

HEG Ltd has reported strong operational and financial performance driven mainly by higher capacity utilisation and increased volumes. Executive Director Manish Gulati said product pricing has remained stable in recent quarters in an interview with CNBC TV18.

The company achieved significant profit growth in the October–December 2025 quarter, supported by efficiency gains. HEG expects utilisation to remain close to 90% in FY27, with margins steady under current conditions.

Strong Quarterly Results And Share Performance

HEG posted a net profit of ₹207 crore for the October–December 2025 quarter. This figure compares with ₹83.4 crore posted in the same quarter last year, reflecting a growth of about 2.5 times year‑on‑year.

The company’s market capitalisation stands at ₹10,244.21 crore. Over the past year, HEG shares have risen more than 56%, highlighting investor confidence in its operational improvements.

Capacity Utilisation As Key Growth Driver

Gulati explained that the company has prioritised operational efficiency despite challenging market conditions. In the last quarter, HEG operated at roughly 85% capacity utilisation.

Across the first nine months of the financial year, utilisation averaged close to 90%, compared with 80% last year. This improvement is notable because it is achieved on the company’s recently expanded 100,000‑tonne capacity.

Pricing, Raw Material Costs, And Margin Outlook

Product pricing has been largely flat over the last two to three quarters. Raw material costs, especially needle coke, have also remained stable.

As a result, margin expansion has stemmed primarily from higher utilisation and stronger scale benefits. Gulati said the company’s margins reflect its position as one of the lowest‑cost producers globally and its ability to spread fixed costs over increased volumes.

Forward Guidance on Utilisation and Pricing

Looking ahead, HEG aims to sustain around 90% utilisation in FY27 and may exceed this level if conditions allow. However, pricing is expected to remain unchanged for the first two quarters of FY27, as ongoing order bookings do not indicate price movement.

Pricing trends for the latter half of the year will depend on broader industry developments. The company expects stable margins if utilisation and costs hold steady.

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Conclusion

HEG’s recent performance reflects a combination of higher utilisation, stable pricing, and improved operational efficiency. The company has strengthened its competitive position by leveraging scale and maintaining one of the lowest cost structures globally.

Its expansion plans and anticipated demerger signal a strategic shift aimed at supporting future growth. With strong demand expectations and stable margins, HEG appears positioned to sustain its current performance trajectory into FY27.

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