Good afternoon, ladies and gentlemen. I am pleased to welcome you on behalf of HEG Limited and SKP Securities to this financial results conference call with the leadership team at HEG Limited.

We have with us Mr. Ravi Jhunjhunwala, Chairman, Managing Director, and CEO; and Mr.

Riju Jhunjhunwala, Vice Chairman; along with their colleagues, Mr. Manish Gulati, Executive Director; Mr.

Om Prakash Ajmera, Group CFO; Mr. Ravi Tripathi, CFO.

We also have Mr. Basant Jain, Joint MD and CEO, Bhilwara Energy Limited; Mr.

Ankur Khaitan, MD and CEO, TACC Limited; Mr. Hiren Pravin Shah, MD and CEO, REPlus; Mr.

Puneet Anand, Group CSO; and Mr. Salil Bawa, Group Head Investor Relations.

We'll have the opening remarks from Mr. Jhunjhunwala, followed by a Q&A session.

Thank you, and over to you, Ravi ji.

Thank you, and good afternoon, friends, and welcome to our financial results conference call for Q3 financial year 2025-26. I would like to begin by setting the context on the global steel market as its underlying trends are critical for understanding the demand conditions for the graphite electrode industry.

As per the latest data published by the World Steel Association, global steel production declined by about 2% year-on-year in calendar year 2025, falling to 1,804 million tons, which is 1.8 billion tons, from 1,841 million tons in 2024, reflecting a challenging macroeconomic environment and subdued demand across major steel-producing regions. China, which is the world's largest steel producer, also recorded a 4.4% year-on-year decline in 2025, with crude steel production reducing from 1,005 million metric tons to 961 million metric tons.

While China steel production has declined by approximately 7.5% over the last five years, its steel exports have increased sharply over the same period, rising by 78% from 67 million tons to 119 million tons in 2025 over these six years, significantly intensifying competitive pressures across global steel and downstream markets. In contrast, India continued to outperform, with crude steel production increasing by 10.4% YoY, supported by strong infrastructure spending, resilient automotive demand, and ongoing capacity additions.

Among other major regions, United States recorded a 3.1% YoY increase in crude steel production, while Japan's output declined by 4%, and South Korea declined by 2.8%. European Union (EU) remained under significant pressure, with steel production declining by 2.6% on YoY basis due to very high energy costs and weak industrial activity.

Against this backdrop, the global graphite electrode market continued to face challenging conditions, with customer demand remaining muted due to cautious procurement behavior and sustained pricing pressure, particularly from elevated steel export out of China. These demand conditions remained uneven across all the regions.

While near-term visibility remains limited, disciplined supply, improving utilization trends in certain markets, and the continued shifts from electric arc furnace steelmaking provide support to the medium-term industry fundamentals. In this environment, our focus on operational efficiency, cost discipline, and customer diversification enabled us to deliver a resilient performance during the quarter, demonstrating the strength of our model.

We continue to operate at the highest capacity utilization in the industry all around the world at 85% in previous quarter and 89% in the last three quarters combined, both of which are highest in the graphite industry worldwide. Just to remind you, we have the single location largest facility in the world at a place called Mandideep near Bhopal with a capacity of 100,000 tons, combined with a cost structure which is amongst lowest, positions us as one of the most efficient and cost-efficient graphite electrode manufacturers globally.

Just to reiterate that these numbers are based on our—just to reiterate, these numbers are based on our expanded capacity of 100,000 tons and not 80,000 tons, which was the case until '23-'24, reflecting a gain in the market share at a time when the electric arc furnace-based steel production is more or less flat. Looking ahead, the global transition towards low-emission EAF steelmaking continues to accelerate, driven by climate goals and regulatory momentum.

We once again reiterate that this transition is expected to generate incremental graphite electrode demand of approximately 200,000 tons by 2030, excluding China, reinforcing the industry's long-term growth potential. To the best of our knowledge, about 20 million tons of new greenfield electric arc furnace capacities have already been added in the calendar years 2024 and 2025, and we believe another 60 million tons will be added between calendar years 2026 to 2028, which is which is not too long in the in the next three years, 60 million tons, and another 30 million tons between 2029 and 2030, taking the total new greenfield electric arc furnace capacity by 110 million tons.

It has never happened in the history that steel industry has added 110 million tons in the last 20, 30, 40 years probably. This would increase the worldwide electrode demand by approximately 200,000 tons compared to what it was till calendar year 2025.

Construction activity of our recently announced expansion by a further 15,000 tons is progressing as per schedule, and we stand by our earlier target of completing this by early 2028, which will position us well to cater to the incremental electrode demand all over the world. I once again reiterate that for the last many years, our exports have constituted around two-thirds of our total sales to more than 30, 35 countries, covering almost almost the entire geography.

Our composite scheme of arrangement is on track. The NCLT bench at Indore has heard the matter and reserved its order on the first motion application.

We expect to receive the order within the next one or two weeks. Upon receipt of this order and in accordance with its directions, we will initiate the process of issuing notices and convening meetings of our shareholders and creditors to seek their approval for the scheme.

Once the approval process is completed, we will file the second motion petition. We anticipate that this entire scheme will be approved by NCLT by Q1 2027.

With that, I would now like to invite our CFO Ravi Tripathi to present the financial quarters for financial results for the matter for the quarter, and then we'll open up for Q&A. Thanks.

Ravi, over to you.

Thank you, sir. Good afternoon, everyone.

I will briefly walk you through the company's operating and financial performance for the period ended 31st December 2025. For the nine months ended December 2025, revenue from operations stood at ₹1,965 crores compared to ₹1,616 crores in the same period of last year.

For Q3 FY26, revenue was ₹656 crores versus ₹477 crores in the corresponding quarter of the previous year. EBITDA for the nine-month period was ₹623 crores, up from ₹393 crores of the previous year.

On a standalone basis, profit after tax for the nine months of FY26 was ₹344 crores compared to ₹163 crores in the same period of last year. On a consolidated basis, profit after tax stood at ₹455 crores as against ₹189 crores in the previous year.

Our balance sheet remains strong. The company continues to remain long-term debt-free and maintained a treasury balance of approximately ₹1,155 crores as of 31st December 2025.

Looking ahead, we are confident that any improvement in the industry can significantly boost our profits. The detailed presentation has been uploaded on the company's website as well as with the stock exchange for your reference.

We would now be happy to take your questions. Thank you for your time.

Over to you, Naveen ji.

In the meantime, I just have an announcement. We just spoke about this NCLT order, which was supposed to be coming very soon.

We just, a minute ago, got this in our hand right now.

So—

No, no, I have finished.

Hi. Thank you very much, and congratulations for declaring great results.

I'm very happy to see the utilization that the company has been able to clock. I have three quick questions.

Number one, if Ravi, we can repeat the statement that he made about the NCLT order just before the Q&A started. Second is I wanted to get a sense of the realization that the company has been clocking in this quarter and what is the overall realization that is expected for the full year in dollar terms for the graphite electrodes?

Third question is if you can indicate the product mix of the graphite electrodes between ultra-high power and high power, please. Thank you.

You see, the first figure that you're talking about, obviously, it's a competitive world, and we don't want to give any number. It's not very difficult.

The turnover, you know the capacity utilization, we know the total capacity of the plant. It's not very difficult to calculate that.

Don't, please, ask me to give that number. Your second question was?

Sir, about the product mix between ultra-high power and high power.

It is more or less in the region of 70%, 75% ultra-high power.

Got it. Sir, the statement that you just made on the NCLT, that you've got some intimation about a minute ago?

We just got that. As I was just saying that we are expecting it soon, it just so happened that while we were speaking, the order came.

Great. Thank you.

Thanks for the opportunity. My question is on the volume growth.

Is it fair to expect our nine-month volumes would have grown by about 20%?

I gave you the utilization rate and our capacity is 100,000 tons. It's very simple to calculate from there.

Sure. I'm assuming 20% plus/minus.

Asked another way, is that just want to understand if we have improved our volumes by say 18,000 to 20,000 tons, where have we gained market share from? Either is it from the Japanese competitors or the Chinese players?

Because GrafTech has improved volumes of about 6%. Graphite has improved by a few percentages.

I'm just trying to understand from which players, which sort of geography have we gained market share, and in which end market—Europe or Middle East or whatever or India—which geographies we have gained market share, if you can just give some sense?

You see, there are only four, five major regions in the world, and US is the only country which produces more than 70%, 72% of their total steel through electric arc furnace. That is by far the single largest market after China.

Then rest everybody is like 30%, 35%, 40%. Europe is about 40 about 45% to 50%.

We have gained market share everywhere. There's no one specific region that we are catering to.

We have been catering to more than 30, 35 countries all over the place. Wherever the market is, we have gained a little bit of market share.

Okay. Would you like to add from which sort of players have we gained share from?

Is it fair to assume we have gained from Japanese players or Chinese players?

There are only basically three or four bigger players in this industry now. There's an American company, there's a Japanese company, and then there are a couple of very small companies.

It's very difficult to give you a particular name because everybody sells a little more in one area, a little less in another area. Obviously, we probably have gained from each one of them a little bit here and there.

Sure. In terms of your annual pricing arrangement, would you like to give some sense despite all the tariffs and everything, is it fair to assume our broad realization will remain more or less the same, or from whatever arrangements or the contracts we have put in for some of the geographies?

You see, a lot of these orders have been negotiated on a 12-month basis, especially in US. In other countries, some companies negotiate on a quarterly basis, others do it on a six-monthly basis.

It's not easy to give one simple answer to that. Yes, I could safely say that at least 50% to 60% of whatever volume that we are going to sell in the next year, we have settled everything for the 50%, 60% kind of a number.

Got it. For that, the pricing sense will be more or less similar to what we have done last few quarters, or will there be a major

shift? You're right.

Got it. Another question was with the still with 18% tariff, I'm not sure how much disadvantage or advantage we have compared to other competitors in US market.

For our business mix overall, you have spoken about I think 20% in US, Americas. That sort of number should sustain in US, or will there be a significant business mix shift for us for different geographies for 2026?

Our product mix is not going to change much here and there. It could be a couple of percent plus/minus, but not more than that.

We are not going to lose market share in any part of the world because of any reason. Whether it is US or Europe or Southeast Asia or wherever, of course, to the extent that we will have to still pay 18% duty, to that extent, there will be a hit, but for the long-term basis, we don't want to lose a customer.

We will absorb that cost.

Sure, got it. Thank you.

Hi. Good evening, everybody.

Sir, I was wondering about our investment in GrafTech. Now it is worth half the value that we invested in, and the state GrafTech is going in, in another two quarters, that company may actually close down partially, from what I understand.

Is that a correct assessment, first of all, and secondly, what do we do with the investment?

No, we don't think so. There's no scope for any company in this industry to close down because, with the kind of growth in the electrode demand that we are talking about—we are talking about 150,000 to 200,000 tons increase in the demand of electrodes in a market where the total production capacity is not more than 500,000 tons.

We're not anticipating any situation where any one of us is going to go out of business. Something or the other will have to happen to every one of us.

Otherwise, if you're talking about 175,000-ton company, which is what GrafTech is, closing down, you're talking of what? About 30% of the total world capacity going out of business.

I'm not talking about full closure,

but

partial closure because, as per GrafTech, cash cost of production is somewhere around $3,700, and from next quarter, the US tariffs are also going to come down to 18% for Indian exporters. They've mentioned in the call that would lead to lower realizations going forward.

Does that mean that the company has a negative—

No. For US, you see, US customers generally decide everything practically 100% of their needs at the beginning of the year for the whole year.

The prices and the quantities and everything is more or less frozen for the whole of 2026. There is no negotiation happening right now in America especially.

Okay. Assuming prices to remain where they were, and they're already at the kind of peak realization of $4,000, and they're still making about $65 million losses every quarter, I don't see it coming down significantly.

That is a dire scenario for a company with a net worth of just about $450 million. That's why I thought that maybe some capacity, because you've seen it even in NIPPON that some capacities have closed.

Is it possible that some capacity of GrafTech gets closed?

I don't see that. If you heard their conference call and if you saw their reports, they are saying the same thing.

Everybody is saying the same thing that the demand of electrode is likely to increase by 150,000 to 200,000 tons in the next two, three years. As I gave you the figure recently, in the last two, three years, capacity of 20 million tons of new electric arc furnaces have already been added.

That 20 million ton additional capacity means about 30,000 tons of demand. In the next two years, we have the data for each company, each location of the new plants which are coming in, let's say, US.

US is the main country where more and more electric arc furnaces are being built because US is the only one place where 70% plus steel is produced through electric arc furnace. Without US, that average is about 40%, 42%.

As I said, 20 million tons has already been added in the last two years. Between now and end of '28, which is only 2.5, 3 years away, we have list of at least 25 to 30 million tons which are coming, and we more or less know which plant is going to be commissioned in which month, in which quarter in the next two years.

At least this 20 plus 30, which is likely to come in the next two, 2.5 years, is 100% coming because where 15%, 20%, 30%, or 50% work has already happened at the site, and these companies have committed millions of dollars of investments. So, 20%, 30%, 40% investment is already committed, work has started, orders have been placed for all the equipments.

All these are bound to come. Unless there's a total U-turn in the world towards carbon emissions and everything, it is not likely to happen.

All these additional EAF, electric arc furnaces, are only coming because of carbon emission. As the same steel produced through electric arc furnace versus blast furnace emits one-fifth of the carbon.

That's the only reason why more and more electric arc furnaces are coming. That story is not going to go away anytime soon.

Yes, sir.

That's a different point that 100, it is possible ki instead of 100, 80 will come. For this industry, even 80 or even 70 million tons of new electric arc furnace, resulting into additional demand of 125,000 to 150,000 tons, is a very big, huge number.

Yes.

I understand that. In the GrafTech call, they also mentioned that China has a capacity of 800 kt, of which nearly 200 kt odd is coming in the UHP market, and that is also operating at about 50% utilization.

Is it possible that the additional demand gets filled by Chinese electrodes? That was my related question, actually.

You see, China, of course, produces much more than the rest of the world produces in terms of electrodes, but they're still pretty far away from producing the right ultra-high power electrodes that we talk about. While they are taking away the market share from all of us on the small-size electrodes, what we call non-ultra-high power, but they're very far away from meeting the quality standards that we are able to meet, what Americans are able to meet, what the Germans or Japanese, all the Western players, to say.

That risk is not there at least in the foreseeable future.

Right. Last question on this.

Because you've already invested about ₹283 crores at a much higher level. Do we increase our investment in GrafTech, or we stay put, or what is the final decision on that?

No, we are staying put. When we took this view and started buying some shares of GrafTech, we were very clear that we are in it for a long haul.

You see, till that last Friday, when the results were declared, these shares were $1.9, $19.

Right.

It went up from current level of $7 to $19 over the last six, nine months. These bumps will keep coming in any industry, but we are here on a long-term basis.

We are not bothered about this. Neither we were going to sell at $1.8 or $18, nor we are going to sell at the current price, at $17.

Okay. Thank you so much.

Good evening, sir. Congratulations on really very strong numbers and congratulations on the demerger as well.

Sir, my first question was, can you just help us understand how we are, given where we are in the cycle and we've been talking about it in the last many calls, in terms of realizations being really low, but we've continuously posted very good margins. If you can really share some more insights on what is enabling us because if you look at the Indian peer and even if you look at some of the Chinese companies' numbers, whatever is available, everybody is, needless to say, GrafTech, but we are sort of a clear outlier in this.

What has really happened in this cycle that has enabled us to do this kind of divergence? If you can please share that, that will be really, really useful.

How do you want me to respond to that question, I don't know. I cannot talk about my competitor, and obviously, the facts are facts.

What is their annual revenue, you know the price of electrode, and by that, you know what is the tonnage that they have sold and what is the tonnage that we have sold. Obviously, there's a difference in cost of production.

That's the advantage of a plant in India versus a plant in Germany or France or Japan. The second thing is if you look at all the graphite players, which is GrafTech and the Japanese company Resonac and two of us in India, we have by far the single largest plant at one location.

Our plant is 100,000 tons. The average of other plants will be 50,000, 55,000 tons.

Except Graphite India, who has a plant in India, all other plants are either in Germany or France or Italy or US or Spain, Japan. Obviously, we have a cost advantage being in India, and the size.

When you're talking of a 100,000-ton plant located in India versus a 50,000-ton average in Germany or France or US or Japan, it makes a huge difference.

Got it. The other question was, sir, if I look at the realizations, you've yourself mentioned the realizations have been at pretty low numbers for many quarters now, and if you look at the utilization for the industry also, it is much lower.

Even GrafTech in this call, they mentioned that they don't see any uptick in realization, and extremely competitive market is continuing, and you also mentioned that for '26, you don't see much in realizations. Given that there is this consistent overcapacity in industry despite shutdowns, at the same time, you've been saying that this additional 30,000 tons of electrode market has been there, and another 30,000, 35,000 electrode market is going to come in next two years.

Still the pricing is still challenged. What is your sense on that?

You see, this 20 million tons new electric arc furnace capacities have just been finished, let's say, in the last six months, nine months, 12 months. That's a number which everybody knows.

We can give you the names if we speak to you one-to-one. We can give you the names of this 20 million tons and the country and the size and everything.

Being steel industry, when you put up a 20 million-ton new capacity, it takes two months, three months, six months to stabilize, to reach 80%, 90%, 95%. Gradually, their capacity utilizations are increasing.

As I said, this year and '28, between now and '28, two, 2.5 years, again, we have a list of 30 million tons. We know the names, we know the country, we know the locations, and we practically know at what stage is plant A, plant B, plant C, plant D.

Because most of these investments and new capacities are being added by our existing customers. Practically, there is no new steel company emerging anywhere in the world.

All these expansions are happening by all the established names, which are already our customers. Since we are a regular supplier to them, we keep meeting them at various locations.

We know more or less whether they are coming in July of 2026 or '27 or '28 or whatever. Even if it is 20 instead of 30, it's fine.

These things will happen. Six months here and there, delays are bound to occur in any place.

If 20 has already come in, which will, let's say, stabilize more and more this year, and another 20, if not 30, is coming in the next two, three years. Every ton means you need more or less 1.5 to 2 kilos.

A million ton means 1,500 to 2,000 additional tons of electrodes required. If you're talking of 20, 25 million tons, you're easily talking of 20 to 35,000 tons of new demand.

The plants which have been closed down in the last three, four years, it'll be very difficult to restart those plants. After closure of two, three years in the Western world, to restart that plant is not going to be very easy, and especially you'll be surprised when I tell you that HEG, we came with this plant in Bhopal in 1976, which is exactly 50 years today.

This is the last new greenfield plant put up anywhere in the world. All these plants that we are talking about, the American company and the European companies and the Japanese companies, they are much, much older than 1976.

It's easy to close this plant because of their cost structure, because of their size. Again, if you go through the list of the plants which have closed down in the last two, three years, they are all in the region of 30, 35, 40,000 tons.

It's simple to calculate a 30, 40,000-ton plant in Germany or Japan or US or France, their cost versus a 100,000-ton plant in India. In fact, despite everything that we spoke about, we just announced about six, nine months ago that we are adding another 15,000 tons.

The work has already started. We have already placed most of the long-term delivery items, and we should be ready by middle to end of 2028, between two, 2.5 years from now.

As we keep adding more and more capacity, obviously, our cost per ton keeps coming down. We have this advantage of one large plant, and that large plant being in India versus Germany, versus Japan, versus US.

This is an inherent advantage of any plant in India.

Right. Thank you very much, sir, for that very detailed answer.

One more question was, sir, as this new addition sort of comes through in terms of end customers putting in new plants, and both the Indian players almost now at peak utilization, if you will, do you see that that could be one contributing reason for the realization to start inching up? Because, as you said, all the other plants are losing money, and it doesn't make sense to run those plants at these kind of realizations.

Does that then probably lead to an improvement in realization at some time as these new plants come in sometime this year and as in the next couple of years?

Exactly. Obviously, the demand has to increase.

This 20 million tons, which is already in operation, it may take another six months, nine months, 12 months to reach 70%, 80%, 85% capacity utilization. This 20 million itself will require 25 to 30,000 tons of electrodes.

Then we are talking about another 30, 35 million tons before 2028.

Right. The capacity that we are putting in, or even what the other Indian company is putting in, would that not sort of put a brake on the price increases because we will have those volumes to sort of cater to?

We can continue to gain more market share and outprice the other players. What is your sense on that?

Manish, would you answer that?

Yes, sir. See, like Chairman said, the demand which is coming is much larger than what we are adding.

We are talking about 200,000 ton coming up to 2030, and the plant which we are building today, that 15,000 additional capacity is going to come on stream in the first quarter, early 2028. By that time, a couple of more electric arc furnace plants would have come up, and we also think that this is for the last two, three years, the steel has been stagnant, declining in some regions, and there will be a turnaround.

We expect that this 15,000 would easily get absorbed.

Right.

If you follow some of our international competitors, and even Graphite India, you will probably hear the same thing. Everybody is talking about the same 20 million tons, 30 million tons, demand increasing by 15, 100,000 tons.

Everybody has the data from the same source, and it's basically the source is all our customers themselves.

Right, right. Sir, sorry, one more question on GrafTech, if I can.

You mentioned to a previous question that you don't see them going under, and but just from their survivability or for them to make even decent amount of profits, the realizations have to significantly go up from where they are right now. While I understand that it's not like a year or even two years that you're looking at.

This is a long-term investment, and looking at the overall industry dynamics. Clearly, they're an inefficient player given where we are located.

How do you see their survivability or let's not say survivability, but them making even at least half of our margins or half of your trough margins, forget peak margins. Because the costs are what they are, right?

The plants where their plants are located. So—

We should not be talking about them, honestly, about their costs. You missed their concall, which happened a few days back.

You are on the wrong concall with this question. We can't say yes, of course, prices should go up for everybody.

The prices prevalent today are one of the lowest. All these are very right.

We have a big plant at one place, so, of course, our costs are lower, but doing India. I think we would like to avoid answering questions on competitors' costs and all that.

Hello. Hi, sir.

Am I audible?

Yes. Yes, please.

Hi, sir. Congratulations on a wonderful set of results.

I just had a few questions regarding the bookkeeping. Currently, the dividends that we get from the hydropower assets, in which segment is that reported?

Does that come under the share of profit and loss from the associates?

My colleague is going to answer that question. Puneet.

Hi. Puneet Anand this side.

BEL, which owns the hydro asset, hasn't given any dividend to HEG in last couple of years. Whenever the revenue will come, that revenue will be shown in the other income.

Understood. The other—

The profit you see on the associate is the profit which Bhilwara Energy has made, and since it's an associate, we show a proportionate profit in consolidated financials of HEG.

Understood. Then the revenue that comes under or the share of profit that comes from Bhilwara, that's technically from the power business only, right?

Currently, yes, Bhilwara Energy largest revenue is coming from the hydro assets. Apart from that, we have the BESS company underneath that, which will generate the profits in coming quarters.

Plus, since Bhilwara Energy is also sitting with liquid money cash, there is other income coming in Bhilwara Energy because of that, which is being in FDs and all.

Understood, understood. Currently, the other income that we are seeing in the P&L, what does that include?

Other income which you see in the P&L, it's primarily the income of the liquidity and liquid assets which we have in HEG per se.

Understood.

Ravi Yeah, sorry. Please.

Sir, currently, apart from the hydropower assets, if you're looking at the HEG Greentech business, we have the energy storage, the BESS for the IPP and the BESS for the commercial and industrial use, right? Currently, do we have any sort of revenue from that business?

Currently, yes, we have revenue from our BESS company, which is REPlus, but it is not significant compared to the hydro revenue which we are making. You will see the right numbers of revenue from BESS and our IPP business, C&I, and the BESS tender which we have already won, and in which we are being declared as L1 from, say, quarter one of FY28.

Quarter one of FY28.

HEG Greentech will also hold the anode business, which will also contribute in the revenue.

That will come in FY29, right?

Our plant is getting commissioned by quarter one of FY28, and so we have assumed a certain capacity utilization in FY28. Yes, the peak revenue will come from FY29.

You will see a contribution from TACC also in FY28.

Understood, sir. Sir, lastly, like post demerger, will there be any debt in the Greentech business?

Surely there will be a debt. The debt which we'll be securing for doing our projects, which is the anode, the C&I IPP, they will be having the debt.

I think in January, we did our detailed presentation on HEG Greentech where we mentioned the entire project which we will be doing in coming two to four quarters, and the subsequent debt along with that.

Understood, sir. Can you just call out the numbers?

What could be the debt in the Greentech business post the demerger?

If you ask me, post the demerger, which will be done by quarter one of FY27, the debt will be negligible there. Once the demerger is done, yeah, it will be negligible.

There will be no debt there per se. Once the company is created and all the projects will be on full go, that time the debt will be coming.

For example, the BESS tender which we have won for Gujarat and the Maharashtra tender where we are L1, whenever those projects are being PPA being signed, then money will be mobilized for that. Likewise, in anode also today, we haven't taken any debt per se today as in date.

There is a contribution of large equity from the company. We are utilizing that, but we will be doing it once the scheme is being done, the money and deployment.

Thanks for the opportunity again. My question was on your remarks regarding the Chinese supply, right?

If I quote from GrafTech's concall, they spoke about 2.5, 3 lakh tons of UHP coming out of China. In our conversation, we have always spoken about, no, five major suppliers probably having about 6, 6.5 lakh tons.

What are your thoughts on the Chinese supply, which probably we should account for in terms of supply dynamics? Aren't we competing with Chinese players in Europe and other markets?

Manish, will you take that?

Yes, sir. Let me answer this.

Actually, most of the capacity which is in China is geared towards a non-UHP grade. We agree, yes, there are one or two companies which are now making UHP products, but to achieve that kind of consistency and reliability does take time.

At the same time, China is definitely working towards increasing their own electric arc furnace production. Some of this capacity, we hope, will be absorbed inside China.

Outside China, as you have seen from our results itself, that HEG is also a very competitive company. We don't worried about their impact of their UHP on us and this because we can also see the commensurate demand coming.

It's not that the electrode demand is going to be stagnant and Chinese will eat into everybody's share. There, we don't really agree.

There's demand also coming within China and from outside China to the extent of 200,000 tons.

In terms of our, if I just look at the segmental profitability of the electrode business, excluding the other income, etc., the margins have improved over last three quarters. I'm assuming there is a component of operating leverage with higher production.

Is there any advantage on raw material cost?

Not really. It's very, very marginal because the key raw material is needle coke, and prices have been pretty much consistent.

It takes a while for the slightly higher-cost inventory to go away. There's a marginal drop in the consumed raw material.

What do you see improvement in margins is basically coming from our operating levels, nothing else.

The size. Now that we can add another 20,000 tons from 80 to 100, that gives us a cost advantage.

Okay. Sure, got it.

Thank you.

Yes, hi. Thanks for the opportunity, and congratulations on a good set of numbers.

Many of my questions have been answered. As we have settled contract for half of the volumes for this year, would it be fair to take third-quarter spreads as the baseline assumption for electrode and needle coke pricing, basically just in terms of gross spreads, if they can sustain in the coming quarter?

Amit, for the next two quarters, you can just assume a similar price. Don't expect any uptick in that.

It is just going to be very, very similar. Of course, everybody hopes for a price increase, but for the next two quarters, we don't see it happening.

Right, got it. Then we did, of course, have about 50% tariff impact to US, even if we take, let's say, 10% as the share of your exports into US.

There has been a significant impact from that perspective. Now with that going down to 18%, how much of incremental delta are we looking at, if you can quantify some numbers in terms of how much the impact was and then how much it will be in the coming quarter?

Just a minute, Manish. Just a second.

In fine prints, if you see the tariff, how it is applied, there's a provision that let's say, I'm just giving an example, if you are selling electrodes to somebody in America at X dollars, and if you are buying your raw material or anything from America for Y dollars, so that Y dollars ki jo value hai, wo aapke X se ghat jayegi. For duty calculation, they are exempting the portion of the cost that you have already imported from US.

Whatever is the selling price of electrode, usme se that portion will be reduced. To that extent, you saved the duty.

Now the duty has come down from 50 to 18, we're quite all right. Of course, if this was the case of 50%, then it will have a severe hit on our bottom line.

With 18%, of course, it'll hit the profit, but it is not going to be very significant.

Okay. Even with the duty hit, which was clearly there for the third quarter in entirety, and given that the performance of our peers like Graphite India and GrafTech, it has been affected by prices, our performance has been pretty resilient.

To that extent, how much of that tariff impact goes away now, if you can quantify that bit?

Sir, main bolun? Isko quantify ab aap apne aap hi kar lo, matlab.

Haan. More or less how many tons we are selling in America, you know more or less the price, and I gave you the formula if you're importing something from US, that is exempted.

So, 18% is still 18%, but that number is not staggering. Of course, it will hit the bottom line to some extent, but we can very easily absorb that.

Because we are a long-term player. We are not looking at the next 12 months only.

We don't want to vacate the market just because there is a duty.

Right. Then just one housekeeping question on other expenses.

There is a positive delta sequentially with cost reduction in other expenses. What exactly is it coming from, and then is it sustainable going forward?

One second. I think Ravi is answering this.

Our CFO will answer this. Go ahead.

Yeah. In other expenses, as compared to previous quarter, it is reduced mainly because of the slightly sales reduced.

In that proportion, the selling cost is also reduced. That's why the other expenses is lower than the previous quarter.

Because selling also has a cost by way of commissions and all that. As you can see the reduction in top line, there's slight less volumes translated into sales, and that is what you see the corresponding difference in the other expenses also.

Hi. I have two questions.

One, you were talking about China, how competitive are their prices versus ours, and what is their cost structure like? I'm sure you would know.

Secondly, how are the contracts for needle coke structured? If tomorrow electrode prices were to go up 20%, would the needle coke companies try and claim their pound of flesh, or is that a contract linked to oil prices?

Main answer doon kya, sir? Haan.

See, the needle coke is being contracted quarter-by-quarter, and it's a process of two months for making an electrode. We are also on the base for whatever we book in the market, we make sure that the cost of that required needle coke is already locked.

That if prices go up and down, we don't take a hit. That is let's say, generally, we wouldn't like to take a call for more than six months.

Some markets, we can, so that we take care of making sure that the cost is frozen, we know it exactly. Of course, when prices go up for everybody, when the graphite electrode industry will make money, of course, needle coke suppliers will not be left behind.

They will also increase. First, it has to come from the market.

First, electrode prices have to go up.

Right. I'm only just trying to understand the last cycle that happened in 2017, '18, right, when electrode prices just shot up, and needle coke lagged quite a lot, and then they kind of went up.

You had this supernormal margins for a little while, and then they compressed because needle coke prices shot up despite oil prices.

Supernormal margins came for the simple fact that the kind of product we have takes two months to make. There's certain inventories in the system, a certain finished goods, certain work-in-progress, certain raw material waiting because it's all getting imported coming from outside India, something on high seas.

When electrode price suddenly shot up, we did get a cushion. It worked the other way round two years later when the electrode markets fell.

Everybody in the graphite industry had to take a big NRV hit.

Right, right. Okay.

This is all because of nature of the industry, nature of the product.

Understood. What about the Chinese UHP makers?

In the last cycle, they weren't really doing any UHP. Now they've gotten to the UHP market.

How competitive is their cost versus our cost in India?

See, no one else outside China has been able to really explain how Chinese price their products because if you sit with a piece of paper, it doesn't work out for any product. We can't help it.

We can just speak for ourselves that we are a competitive company, a large plant, and we have all the wherewithal, the quality, the customer base, the costing, and we can fight it out.

Fair enough. All right.

Thank you.

Thank you very much, sir. Most of my questions have been answered.

Thank you.

Thank you for the opportunity. It's a fantastic set of numbers, and always enjoy your calls given how detailed and how patiently you answer all our questions.

My question is on the steel capacity that you mentioned is coming up in Europe and US over the next five years, right? I'm not able to reconcile that data with the current capacity utilization there.

Capacity utilization of steel is, I believe, between 50% to 65% right now, which means you have a lot of capacity lying idle. Even though new capacity will come, and the numbers that we are discussing is let's say quite large in context of the current capacity already there.

We're talking about 10%, 15% extra capacity coming. Where will the demand come from, right?

Without the steel demand coming through, we will not be able to utilize the incremental electrode capacity also, or the incremental electrode demand will not come. The capacity addition is fine, but it is coming at a time when the utilization itself is low.

How sure are we of the utilization for the new capacity and existing capacity is a question that I'm not able to reconcile with the capacity coming online.

No, no,

it is it is pretty clear. I'll tell you what it is.

Basically, what is happening is, and as a preamble to that, see, the same steel which is produced through electric arc furnace and the same steel which is produced through the blast furnace, the carbon emission on the blast furnace steel is between four to five times of the same steel which is produced through electric arc furnace. Now for the last three, four years, ever since everybody in the world, every country in the world is concentrating very strongly, very seriously to reduce carbon emission, there is this huge movement which is happening for the last two, three years, and in which context, I just said that about 20 million tons of the new electric arc furnaces through electric through 20 million tons of steel capacity through electric arc furnaces have come up in the last 12 months in calendar year 2025.

Another 25 to 30 are on the way between now and 2028. These are not additional capacities.

They're coming in place of blast furnaces. Because a country like America will not allow you to produce steel in huge volumes where the carbon emission is five times compared to the same steel produced through electric arc furnace.

They're replacing the old blast furnace route through the electric arc furnace. The demand of steel We are not saying demand of steel is going going to go up by 200, 300,000 tons, 2 million, 3 million tons.

We are talking of demand of electrodes going up because there will be more electric arc furnaces, which will be replacing the existing blast furnaces.

Do you mean to say that with this capacity addition that is coming for electric arc furnace across the Western world, we are seeing an equivalent capacity of blast furnaces shutting down as well, is it?

Exactly. Exactly.

That is exactly what is happening. If you go through some communications and on the websites of some of these companies like let's say ArcelorMittal, I don't remember the exact number, but they are doing exactly this.

They're closing the blast furnaces and replacing them by the new electric arc furnaces because there is a big carbon tax that every steel company has to pay to the government as a penalty if you keep polluting the atmosphere five times more by producing that steel through blast furnaces. The steel capacity is not increasing, but equivalent amount of blast furnace steel is being closed.

Understood. Okay.

That was helpful, sir. Given your exposure to the Western steel companies, do you have any commentary on because in your initial commentary, you talked about how Chinese steel production is coming down, but the exports have gone up significantly.

How do they see this anti-involution campaign that's happening there? Do they see their impact, and is there any thought on how that might evolve over the next couple of years?

Manish, bataye.

I didn't hear the question clearly because the voice was not very clear to me. Can you please repeat it once more?

Sorry for that. Are you mentioning CBAM?

What exactly are you mentioning?

Over the last four years, we've seen the Chinese steel production coming down.

Okay. Okay.

Okay.

We've seen the exports go up over the last around by 78%,

right?

In your conversation with your current customers, there is talk of anti-involution going on in China in terms of curbing destructive price reduction, and you can see

that

in petrochemicals. Is there any clarity on if we see export reduction or pricing improvement of steel coming from China?

Okay. Now I have clearly understood.

You see, the last five years, the production has declined by 7.5% in China. The problem is, as you keep hearing in the news also, everywhere, that their housing demand has gone down a lot, their real estate consumption of steel has gone down.

Despite a reduction in their production, their exports have gone up by 78% from 67 million metric tons to 119, which are a record high. Now about the pricing, the destructive pricing, etc., you see, like, for example, EU has a duty on You know that Section 232.

They have a severe duty on Chinese steel. Now EU has introduced a CBAM.

A lot of these Chinese steel was finding its way into EU. EU was importing almost 27 million metric tons, and obviously, most of that was blast furnace-based.

If they put that additional carbon tax on that, to that extent, they will protect their EU industry. Similarly, there is some duty on Chinese imports into India.

The other countries, when they are seeing low-priced steels hitting their own domestic industry, they're, of course, raising their safeguards in whatever way possible, like a Section 232 in US, like a CBAM in EU, like something like a safeguard in India. Whatever, but we can't say, but so far we have not seen this destructive or the word which you used, involutionary.

We have not seen that in steel. Yes, we are, of course, observing how each country is trying to protect their own industry from the onslaught of Chinese steel exports.

Almost questions were answered. Basically, I wanted to ask something about company's interest to increase its stake in GrafTech since Graphite is also having some stake in the company.

Any view on that?

Can you repeat your question, please?

Is there any view about GrafTech, do we plan to increase since the price has come much lower? Even Graphite has taken some stake in the company since the price has crashed way off.

Is there any scope of increasing the stake when it's much cheaper?

What was the last line you said? Is there any—

Scope of increasing the stake, that's what he meant, do you want to increase your stake because the prices have fallen to that level?

Yes, yeah.

I don't think we should talk about it publicly.

Basically, we have an Investment Committee who takes a decision on this investment. More than that, we can't discuss anything on this.

Sure. Thank you.

Hi, sir. Thank you for the opportunity.

My question is on the graphite anode business. I think in the last call for the demerger, you had referred to some margins based on power cost, and you had spoken about our power cost being significantly better than our competitors globally.

I was wondering if you could throw some color on that and provide some clarity. I think that would be great, sir.

Thank you.

Sir, hi, Riju this side. Last time we had spoken in detail that in the anode project, almost 30% of the cost is power cost, and the state government of MP has given us a real good deal in which our power prices will remain lower than ₹5, significantly probably lower than ₹5 for at least five years from today.

That itself, we don't see anywhere, whether it is China or anywhere else in the world, where you would find cheaper power than this today. That should be a good advantage to us, and that's that power subsidy for us starts from the day of commencement of operations, not from today.

We'll have a good five years to take advantage of that, less than ₹5. Right,

right. Sir, just a quick follow-up on that.

You had also spoken about how you're seeing like 50—

Sir, just one question. What is the peak utilization that we can do in terms of the capacity?

Is it 100% or whether the practical peak that we can do from the current capacity, 100,000 tons?

Obviously, theoretically, anybody, everybody can go to 100, but you see, it's a very complicated technology, and that's the reason that our plant was established in 1976, exactly 50 years ago, and there has not been a new greenfield plant of this product anywhere in the world except China. The technology is very, very complicated, and just to give you a feel of what the complexity that you're talking about, the minimum time that you take to produce a small-size electrode, low-grade electrode, is 5 to 7 weeks.

The longest time that you take is as high as 5 to 6 months. That is the complexity of the technology.

If you're producing something where the process is 2 to 5 or 6 months, anything goes wrong on any particular day or on any of the 5 or 6 different processes that we have to handle, it becomes a scrap. That is the only reason that there has not been any new plant in the last 50 years.

I I just want to add one point here that, you see, 100,000, of course, can be made, but sometimes you don't get the ideal the the product mix you like from the market. Of course, if I limit ourselves to reduce a couple of sizes, we can, of course, do 100.

Just to answer your question or try hazarding a guess, because we will also I I will also would like to see next year how far we can push ourselves. Probably 94%, 95% might might be, in real working conditions.

That is the I think, but we have to try. We're already at our 90 level.

Now we'll see with how far we can push ourselves to 94% or 95% subject to a certain product mix.

Got you, sir. Thank you very much.

This is very helpful, and all the very best for the coming year.

Thank you, friends, for joining us on this call today. It's probably been the longest call in the last two, three, four years, and a lot of probing questions, and all of you seem to be extremely well informed about this industry.

Thanks a lot, and I look forward to meeting and speaking to you once again in 3 months' time. Thank you.