HEG share price jumps 6%, hits 52-week high on Rs 172 crore block deal buzz
HEG shares soar as block deal and Chinas export curbs drive market optimism; capacity expansion and robust global demand strengthen the companys position in the graphite electrode industry.
Shares of HEG Ltd extended their winning streak for the third session, rising over 6 per cent in early trade to touch Rs 619, the highest level in nearly 6 years. The surge followed a Rs 172 crore block deal in which 28.8 lakh shares, representing 6 per cent of the company’s equity, changed hands at an average price of Rs 600 each.
The stock has gained over 40 per cent in the past week, fueled by robust demand prospects and the ongoing rally in graphite electrode prices.
China's export restrictions lift prospects for HEG
The rally in HEG shares has been driven in part by China's decision to tighten reviews of graphite exports to the US. This move, aimed at curbing the export of dual-use materials like germanium and gallium, has raised fears of supply shortages in key markets.
HEG, a leading graphite electrode manufacturer, is well-positioned to capitalize on the potential supply gap, as over seventy per cent of its revenue comes from exports, with the US contributing a significant portion.
Capacity expansion to boost production
HEG recently completed the expansion of its graphite electrode manufacturing facility, increasing capacity to 100,000 tonnes per year. This positions the company as the largest single-location graphite electrode manufacturer in the Western world.
In the September quarter, HEG achieved an 80 per cent capacity utilization rate, the highest globally, and expects this momentum to continue. The company also plans to leverage its capacity ramp-up to drive cost advantages and strengthen its market position.
A favourable industry outlook supports growth
The global shift toward electric arc furnace steelmaking, a process that relies on graphite electrodes, is expected to boost demand. HEG projects an additional demand of 200,000 tonnes of electrodes by 2030, excluding China.
The government’s Rs 9,000 crore production-linked incentive (PLI) scheme for battery components could also benefit HEG as it eyes entry into the graphite anode market, a critical component in lithium-ion batteries.
With strong fundamentals and a favourable industry backdrop, HEG remains a key player to watch in the graphite segment.
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