HEG Ltd.'s shares fell by over 7% in a flat market on Wednesday due to disappointing Q1FY25 financial results.
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The company reported an 83.4% year-on-year (YoY) decline in net profit for the June quarter, dropping to ₹23 crore from ₹139 crore last year.
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HEG's total income decreased by 15% YoY, reaching ₹591.90 crore compared to ₹697.55 crore a year ago.
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Following the results, HEG's stock hit a low of ₹2,011, nearly 27% below its 52-week high of ₹2,744.60 reached on May 22, 2024.
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Despite the recent decline, HEG's stock is 37% above its 52-week low of ₹1,466.85 (recorded on October 26, 2023) and has risen 26% over the past year, with a 5% gain year-to-date in 2024.
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The company’s EBITDA fell by 73% YoY to ₹38 crore, with the EBITDA margin dropping to 6.7% from 21% in the same quarter last year.
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The decline in margins was attributed to a 37% increase in other expenses during the quarter.
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HEG announced a stock split to increase liquidity, dividing each equity share with a face value of ₹10 into five shares with a face value of ₹2. The record date for the split will be announced later.
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This stock split is a first for HEG, although the company previously conducted a buyback of equity shares in 2019 but has not issued a bonus.
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HEG continues to be a critical manufacturer of graphite electrodes, which are essential for steel production using the less polluting Electric Arc Furnace (EAF) method, favored by the steel industry over traditional blast furnaces.