Key Points
Domestic brokerage firm ICICI Direct Research has assigned a 'buy' rating to HEG on the back of structural demand drivers in place amid an ongoing global shift towards the EAF route of steelmaking, capacity expansion-led volume growth in the offering, and graphite anode business..
By 2030, it is anticipated that over 170 million tons of EAF capacity (excluding China) will be added, resulting in an additional demand for graphite electrodes, a crucial component in EAF, by approximately 200,000 tons compared to the current industry size of around 800,000 tons, as stated by the brokerage...
With its largest single-site plant boasting a capacity of 100,000 tons, including a new capacity of 20,000 tons, the brokerage expects the company will benefit significantly from the growing demand for graphite electrodes...
Li-On batteries are the new sunrise sector catering to E-mobility space (Electric Vehicles) & stationary applications, with demand pegged at 150160 GWh by 2030, resulting in 1.5 lakh tons of demand for graphite anode, a key component in lithium-ion cells..
HEG is setting up a capacity of 20,000 tons of this material (catering to ~20 GWh of cell capacity) at a capex cost of 1,7001,800 crore with expected commissioning in H2FY26 and an intended asset turnover of 1-1.1x, EBITDA margins of 25%+, and a RoCE of 20%," said ICICI Direct Research..
