Good afternoon, everyone, and welcome to the Q1 FY '27 earnings call of HEG Limited. We have with us today Mr.

Ravi Jhunjhunwala, Chairman, Managing Director and CEO; and Mr. Riju Jhunjhunwala, Vice Chairman; along with their colleague, Mr.

Manish Gulati, Executive Director; Mr. Om Prakash Ajmera, Group CFO; Mr.

Ankur Khaitan, MD and CEO, TACC Limited; and Mr. Ravi Tripathi, CFO, HEG Limited; Mr.

Puneet Anand, Group CSO. Also on the call are Ms.

Neha Rajvanshi, CFO, HEG Advanced Materials; and Mr. Salil Bawa, Group Head, Investor Relations.

Sir, congratulations on a very good quarter on the first quarter. Without much ado, I would like to hand over the call for the opening remarks of the management.

Good afternoon, everyone, and welcome to our conference call for the first quarter of financial year 2026-'27. The year began in a shadow of an ongoing war in the Middle East, which materially impacted energy prices globally, besides disturbing world trade and pushing shipping costs disproportionately very high in some cases, and also increased transit times.

In this backdrop, let me give you a broader picture of the global steel industry and its resultant impact on our company. According to World Steel Association's data, global steel production during the first half of calendar year 2026 showed signs of gradual stabilization, declining by a marginal 0.7% year-on-year to around 931 million tonnes.

This indicates that the contraction is bottoming out and global steel demand is beginning to find its floor. Surprisingly, steel production outside of China remained highly resilient, expanding by 2.1% year-on-year to 431 million tonnes after many years.

This positive momentum in the world steel, excluding China, represents a supportive demand environment for our products. While HEG does not sell electrodes directly to China, Chinese domestic steel market dynamics continue to influence global pricing.

A weak real estate sector in China has forced domestic mills to export surplus production of steel. While Chinese steel exports for the first half of 2026 eased slightly to 55 million tonnes, which is a 5.6% decline from the peak of 2025, they still remain at historically elevated levels.

This sustained export pressure has prompted a broad wave of defensive trade measures, including anti-dumping and safeguard duties across key regions like the US, EU, and India. Among key steel-producing regions, India remained one of the strongest-performing markets, with crude steel output increasing by approximately 7.1% year-on-year to around 87 million tonnes in the first half of 2026.

This growth was supported by robust domestic demand for infrastructure development, construction, and manufacturing activities. In matured economies, we saw a solid, broad-based recovery.

Steel production in United States recorded an year-on-year growth of 6.3% in the first half of 2026 to reach 43 million tonnes, while Germany's output also rose close to 8% to 18.6 million tonnes. We also saw an exceptional growth in Vietnam, which surged by as high as 27% year-on-year to over 15 million tonnes, cementing its position as a major Southeast Asian steel powerhouse.

Various changes in the trade policy in several countries and ongoing geopolitical tensions remain key sources of near-term uncertainty. Changes in US trade policies, including tariffs and several country- and product-specific measures, are disrupting the established global trade channels.

At the same time, tensions in the Middle East are affecting the oil and gas markets, contributing to severely higher freight and energy costs, and creating a challenging business environment across industries. These pressures are also being felt across all raw materials like needle coke and other key inputs in the supply chain, which are gradually getting reflected in our input costs.

We continue to manage these developments through operational efficiencies. Despite all this, the medium- to long-term outlook for graphite electrodes demand remains highly positive.

Decarbonization policies, including EU's Carbon Border Adjustment Mechanism, CBAM, are accelerating the global shift from carbon-heavy blast furnace steel to lower-emission electric arc furnaces. This structural trend is heavily supported by latest OECD Steel Outlook, which highlights that approximately 71 million tonnes of new electric arc furnace steelmaking capacity is planned globally for completion between now and end of 2028.

As graphite electrodes are indispensable for electric arc furnace steelmaking, these planned capacity additions support a favorable long-term demand outlook for the industry and validate the strategic rationale for our recent expansion from 80 to 100,000 tonnes, and a further expansion that we are currently undertaking to reach 115,000 tonnes, which is on track and should be in operation by early 2028. Against this backdrop, we remain confident of HEG's long-term growth prospects, and we believe that we are very well-positioned to benefit from the continued transition towards electric arc furnace steelmaking, resulting into increasing demand for electrodes.

Our plant with an installed capacity of 100,000 tonnes per annum remains by far world's largest single-location plant in the world. Its scale and cost-efficient operations place HEG among the most competitive producers globally.

During the past quarter, we operated the plant at an average capacity utilization of more than 90%, reflecting strong operating efficiency, and expect to continue operating at more than 90% in the forthcoming quarters as well. Further expansion that we undertook to reach 115,000 tonnes is likely to be commissioned by early 2028.

This will further increase the gap between our plant and the next two largest plants in the world, which are in the region of 70,000 tonnes per annum. With our scale, competitive cost position, location, high utilization levels, and expanding capacities, we believe HEG is very well-placed to capture the long-term growth opportunities emerging across the global electrode industry worldwide.

Now update on demerger, which my colleague Puneet is going to do.

Hi, good afternoon, everyone. We are pleased to inform you that the composite scheme of the arrangement is progressing very well.

The NCLT has received its order, and the company is awaiting pronouncement of the order. The company will provide an update shortly on the timeline of affecting the scheme and the record date.

We will also hold an investor call to explain the HEG Advanced Material business once the order is pronounced and a copy of it is being received.

With that, I'll now hand over to our CFO, Ravi Tripathi, to take you through the quarterly financial performance, after which we will open the floor for Q&A. Thank you.

Thank you, sir. Good afternoon, everyone, and thank you for joining us.

I will briefly take you through our financial and operational performance for the first quarter of FY 2026-'27. We have begun the financial year on a strong note, delivering a meaningful improvement in profitability despite a marginal decline in volumes.

The quarter demonstrates the strength of our operating model, supported by improved realization, driven by product and geographical mix, disciplined cost management, and continued focus on operational excellence. On a standalone basis, revenue from operations increased by 11% on year-on-year basis to ₹681 crores, compared with ₹613 crores in Q1 of the previous year.

Total income also increased by 11% to ₹731 crores from ₹660 crores. On a consolidated basis, revenue from operations also grew by 11% to ₹681 crores, while total income increased by 8% to ₹724 crores from ₹673 crores in the corresponding quarter of the last year.

Standalone EBITDA increased by 38% on year-on-year basis to ₹211 crores from ₹154 crores, with EBITDA margins also improved to 29%, compared with 23% in the corresponding quarter of last year. At the consolidated level, EBITDA increased by 17% to ₹194 crores from ₹166 crores, while EBITDA margins improved to 27% from 25% of the last year.

Standalone profit after tax increased by 53% on year-on-year basis to ₹110 crores from ₹72 crores, while consolidated profit after tax increased by 23% to ₹122 crores from ₹100 crores. Capacity utilization during the quarter stood at 90% plus, which is marginally lower than the corresponding period of last year.

However, the impact of lower volumes was more than offset by better realization, improved operating efficiencies, and effective cost management, resulting in a healthy expansion in both margins and earnings. Sequentially, the business witnessed a strong recovery compared with the previous quarter.

Standalone revenue increased by 13% over Q4 FY 2025-'26. More importantly, the standalone EBITDA improved from a loss of ₹126 crores in the previous quarter to a positive EBITDA of ₹211 crores in the current quarter.

Standalone profit after tax also recovered from a loss of ₹163 crores to a profit of ₹110 crores. Similarly, on a consolidated basis, EBITDA improved from a loss of ₹108 crores in Q4 FY 2025-'26 to ₹194 crores, while profit after tax improved from a loss of ₹119 crores to a profit of ₹122 crores.

In previous quarter, the loss reported due to MTM loss in foreign equities investment. Our balance sheet continues to remain one of our key strengths.

The company remains debt-free, with no long-term loan borrowings, and our treasury stood at approximately ₹858 crores as of 30th June, 2026. This strong liquidity position provide us with the financial flexibility to pursue future growth opportunities while maintaining resilience across business cycles.

Overall, we are encouraged by this strong start to the year. While the external environment continues to evolve, our focus remains on enhancing operational efficiency, maintaining cost discipline, strengthening our competitive position, and creating sustainable long-term value for our stakeholders.

For a more detailed discussion on the quarterly performance, I would request you to refer to the investor presentation, which has been uploaded on the company's website as well as with the stock exchanges. With that, I would now like to hand over the call for Q&A session.

Thank you. Over to Madam.

Thanks for the opportunity. My first question is on revenue mix.

How much was the share of Middle East in Q1, and to which region did we divert lost volumes?

Sorry, Amit. Can you repeat this for us?

Actually, the voice was echoing. Go ahead.

Please repeat it.

Yeah. My question is on revenue mix.

How much was the share of Middle East, and to which region did we divert lost volumes due to war?

I understood the question anyway. We understood the question.

Amit is asking what was our share in Middle East. See, over the years, it's around 20%.

It hardly matters because we are so well diversified across countries that some temporary delay in shipping, etc., was easily spread over to the rest of 30 countries we operate

in. Sir.

We did not lose any volumes in Q1? No,

no. We didn't lose any volume.

As you can see, we still operated in excess of 91%. Okay.

My second question is on implied price realizations, which I calculate using the revenue and the volumes. It appears that the benefit of any recent price hike is yet to flow into earnings.

How much of price increase can we expect in the coming quarters?

See, for companies like us, in this electrode business, normally are always booked 3, 4 months ahead. Whosoever is announcing a price hike, and we also have to start raising prices, will only happen October onwards because we anyway committed up to September.

Whatever price hikes which will come in later, will actually start showing up later in the year. However, in our existing markets, whether it's India or elsewhere, whatever new business we are booking are at higher prices.

We continue to gradually raise prices because our input costs are increasing, also needle coke prices are increasing.

Okay. Thank you, sir.

Thanks for the opportunity, and congratulations on great set of numbers and execution in the tough environment. Same follow-up question to what Amit was asking.

If you have had 20% roughly volumes from Middle East market over the years, then can you elaborate little bit which markets we have diverted those volumes to, where you see the better demand and has absorbed your balance volumes? Also, you can quantify, if possible, how much the Middle East volumes have degrown by?

Amit, it is not the right forum to talk of in so much of details. Obviously, it's a listed company, we have competitors all over the world.

We should not be divulging these kinds of numbers. Suffice it to say that our exports continue to be in the region of 70%, 75%, which has been the case for not now, but last 25, 30 years.

We are practically exporting our electrodes to each part of the world, to the smallest countries sometimes in Africa, to Latin America, to the largest consuming countries to the US and Europe. More than that, we should not be talking in public about how much we are selling to whom, how much has our market share come up or come down.

It happens from quarter to quarter. It's nothing so special about this particular quarter.

The world is large enough to take a small piece of drop in one region to some other region.

Sure, sir. I understand it.

Where the question I was coming from is if you look at whatever the regulatory action being planned in the US market, in terms of both CVD and ADD, in that case, what rate in your internal assumptions you would have considered so that the US volumes for us continue to hold or grow? My question was coming from that angle.

Okay. Let me try and take this question.

See, first, when we talk about Middle East, we're not talking about one or two countries or Strait of Hormuz or whatever. We are talking about the bigger MENA region, Middle East, North Africa.

Only 3, 4 countries are impacted. Rest of the business is still ongoing.

They're just postponements. Of course, if they don't take it this one, they will take it next one.

There is no connect between this and the US business per se. The CVDs and ADs which you were mentioning, that thing will keep ongoing, and we will see what results come.

Right now, of course, as Chairman said, We have very well-diversified markets. It remains to be seen.

Maybe we'll come to know around September what was the final result of the CVDs and anti-dumpings. Sure, sir.

In terms of pricing, obviously you will have had all committed volumes and you are saying from October onwards there will be price hike. There will be, I'm assuming, proportionate hike in the needle coke as well.

How will you assume in terms of your net EBITDA expansion, whether the price hike will be much higher than the cost increase we have seen? Any sort of sense you can give?

You see, we have seen two of our colleagues announcing fairly steep increases: the American company and a Japanese company. Obviously, their costs have also gone up, have our costs gone up.

I think one of them has announced a price increase of between $600 to $1,200 depending on the size and quality. The other one has given one number of $930.

They have just been talking about these in the last 6, 7 weeks. As Manish said, we are more or less booked.

Each one of us is more or less booked at least for the next one quarter or two quarters. It's a very favorable trend and it had to happen in any case.

The world has seen so many different kinds of problems relating to several price increases in raw material, oil, shipment, this, that, like anything else, prices are going up for everything. We will obviously follow, and we are following.

There are only 3, 4 of us in the world. Two of them have already announced their intent, they have given the numbers, and they are all available in the public domain.

Apart from these 2, 3 companies that we spoke about, then there is only we and our Indian colleagues. Obviously, we will follow suit.

Nothing substantial is going to happen in the next one quarter or next two quarters because, more or less, everybody is booked more or less fully, if not fully, more or less fully, for the next two quarters.

Sure,

sir. Just...

Is the case with our raw material. Whatever prices of raw material will go up like needle coke and all, the impact of that product will only come by November, December, January.

Everybody is covered or everybody has ordered needle coke at the old price.

Sure, sir. Just one accounting question.

If I look at our other income number, that's close to ₹43 crores, and there will be about ₹7, ₹8 crore interest income, which you disclosed in the segmental numbers. CFO sir, if you can explain what the balance component is?

Is it forex gain or anything else?

It is a fair valuation gain on the investment side. The second part.

Sorry, can you come again, please?

This is a fair valuation gain on the investments.

Okay. Sure, got it.

Thank you so much. I have a few more questions, I'll come back in the queue.

Thank you so much for the opportunity. Congratulations on the good set of numbers.

I have couple of questions. My first question is on the EAF capacity commissioning.

We were talking about 30 million tonnes of capacity commissioning in CY '26. Now since 1H is already past, how much of that has already been kind of commissioned or what's the status on that as of now?

You see, a lot of this has been in operation, and balance is going to be in operation in the next 2, 3 quarters. We are tracking each and every new facility, and whatever we have been talking about in terms of new capacity for last two years, we are very happy to say that they're all happening.

These are all $1 billion, $2 billion kind of a greenfield expansion. Couple of weeks or couple of months delay or, in some cases, early implementation is very, very practical.

Between 25, 30 million tonnes has already come in in the last 3, 4, 5 quarters. From all our conversation with our existing customers and from whatever we hear from the market, we are seeing that whatever numbers that we have been talking about about new electric arc furnaces coming up in the next 2, 3 years and then let's say in 2029, '30 is more or less correct.

We could be out by 10%, 15%, 20% plus, minus here and there, but they are all on the anvil and they're all coming.

Right. Is it fair to say since in 2025 close to 18 million tonnes of capacity got commissioned, first half should be somewhere around 8 to 10 million tonnes already been commissioned, right?

Yes. Between these two years, 24 and 25 sorry, '24 and '25, about 20, 21 million metric tons has certainly come up.

I have the name if you'd like to know offline. Then in these three years, '26, '27, '28, we're talking about almost 60 metric tons to come.

During the year, half year has gone by, I think 8, 10 million metric tons has already come up. If you really want really very interested in knowing which customer where, I'll be happy to provide, but offline.

Sure. Thank you for that, sir.

My second question is on price hike. There were a lot of concerns which were coming up regarding the GrafTech price hike, that it is not getting absorbed in the market.

What's the status on that since now Tokai Carbon has also come up with the price hike? How does the situation improves for us from Q3 to Q4, and do we see that sustenance of price hikes in further years also, FY '28 and FY '29, for example?

See, we would not like to really comment upon the GrafTech and Tokai pricing, except sharing with you what we have seen in the public domain. This is an intent to raise prices.

How much gets eventually absorbed by the steelmakers, that remains to be seen. That will be known in next one or two quarters.

Yes, these are the announcements. Of course, we also have to raise prices because, in our case, the energy cost, the ocean freights, and even needle coke is now going to go up.

Far it was not, but now going to go up. I think as an industry, we all need a price increase.

Now how much actually gets translated and what is anybody's basket is every company's thing, how much is already booked, now being booked, something like that. We can't really say about if GrafTech price is getting absorbed or not absorbed, it is not for us to comment, and neither we are aware.

Got it. Fair point.

My another question is on Greentech. How much of that 20,000 tonnes of anode volumes is already contracted or let's say is in the advanced stages of the contracts because FY '28 is now only 8 months away.

Any clarity on that?

Ankur? Ankur?

Yeah. We are talking with the customers for 3- to 5-years contracts.

Almost about 70% of the contracts will be closed by next 1, 1.5 months. All these contracts will be long-term contracts with the top Tier 1 players across the world.

When we say 70% of the contracts, that would be how much percentage of our capacity?

70% of the capacity, basically.

Okay, 70% of the capacity.

Okay.

My second question is on the BEL. How much of the debt do we have in BEL as of FY '26, and how do we see it progressing for FY '27 and '28?

See, there is no debt in the company.

It's zero, basically.

It's zero. It's a debt-free company right now.

It has been like this for a number of years.

Okay. Let's talk about then Greentech as an entity.

How much of that debt would be coming to Greentech, and how much would be stay with the graphite?

That would be ₹1,500 crores.

₹1,500 crores

of

debt. Gross debt or net debt?

It's a gross debt.

Gross.

Okay.

Just to explain you, till date, we haven't drawn any much money for TACC as of date. It's just started.

When this entire demerger exercise will completed, and when you see 31st March, '27 balance sheet, then there will be approximately around ₹1,500 crore of debt lying on the company on a gross basis.

Okay. Consecutively, we'll take debt for TACC in FY '28, '29 because 70-30 kind of project financing will be there.

This 15% ₹1,500 crores would go up eventually, right? Is my understanding correct?

For

TACC debt, what we have secured till date is 1,240 from SBI, and balance is from our own capital and the internal accruals. FY '29, we will see how we have to go about the additional debt if it is required for the additional capacity, per se.

Okay.

Out of ₹3,100 crores of debt which out of ₹3,100 crores of capex which is there for TACC, earlier our plan was that 70-30 we will do, ₹2,100 crores of debt we would be... No,

when you're talking about 1,300 ₹3,100 crores of capex, that is for 30,000-tonne capacity, which the management has given a timeline that will be coming in next few years. If you talk about in that phase, then 3,100 70% will be through the financing.

Yes, the debt will increase for that.

Perfect. That answers my question.

Thank you so much for the opportunity.

Hello. My question is, can you hear me?

We can.

Yeah. Sir, our total...

Hello? Hello.

Hello? Okay.

Everyone is on hold.

Yeah.

Yes.

Hello, sir. Thank you for the opportunity, and congratulations for the good set of numbers.

My question was, sir, you recently yesterday, you had announced that needle coke prices is expected to rise by another 10% to 15%. Given the coverage cycle of our roughly 45...

Hello? Am I audible?

Yeah. Go ahead.

Yeah. Given the coverage cycle of roughly 45 days of shipping and 45 days of processing, in which quarter do we expect this higher-cost material to actually flow into our P&L side?

What could be the spread per tonne we can expect on this, sir?

See, just to clarify that 10% to 15% what Riju ji said yesterday was of the total our cost of making electrodes. That was roughly 10% to 15%.

Left to needle coke itself, then that's gone up by a higher amount. This will start taking effect in, I think, towards the end of the year, because, of course, it's a long process cycle.

It takes 1.5 months to make electrodes, stocks, etc., etc. The rise will start taking effect towards the end of the year.

As we are unbooked for that quarter, we will be raising prices for that end of the year to cover the rise in cost.

Got it, sir. A run rate of around 24,000 tonnes annualized to roughly around 96,000 tonnes, sir.

Against our 100k capacity, how much headroom we can expect to have on the overall utilization level what we can expect for the FY '27 level, sir? See,

production varies quarter to quarter. I think there's no more headroom beyond 20 94% or 95%.

That's about the peaking. We are running in excess of 90% at present.

Quarter-on-quarter, it varies a little bit. We think we'll close the year between 92%, 95%, something like that.

I don't think there's any more headroom because then you have to create ideal conditions to reach 100, and conditions are never ideal.

Got it, sir. One last question is, sir, in the recent media interview, we said around 7% to 8% price improvement we had in the first quarter.

In last quarter concall, you've guided for $300 to $500 dollar per tonne price increase we expect for FY '27. What have you contracted on the new bookings in dollar-per-tonne basis?

What percentage of your second half volumes is now booked at this level, sir?

Okay. Here we cannot speak in terms of specific numbers or dollars.

What I remember is the last concall, we said that this is a kind of which we definitely require to cover our cost. Right now, we are booked up to September or even I would say up to October.

We are trying various markets, what market, what customer, what price. Still a little while away.

We'll know in next 1 or 2 months what kind of price increase average we are able to get from various markets. Can't say, but surely, we would definitely like to cover our cost and increase margins, if possible.

Got it, sir. Sir, if times allow, one last is on the...

No worries, ma'am. Thank you.

Hi. Actually, my question was so our total anode project cost which has been guided for about ₹2,200, ₹2,300 crores, what can the phasing look like over the years to come?

Chirag, you're asking for what?

GreenTech? Anode project, the capex, ₹2,200, ₹2,300 crores we had guided, right?

Yes.

I think it will be safe to assume around 4- to 5-year payback on that amount.

No. I was asking what our phasing would look like, how much have we spent for Q1 and for the rest of the year, FY '27, '28, basically?

Puneet, would you want to get that exactly? Because I think we've spent...

You are asking how much capex we have spent in FY 2026-'27, right? FY 2027-'28, my plant is coming online.

I'm not able to understand your question.

I'm asking for the anode project, how much have we spent in Q1 and for in Q1 FY '27, and for how much will we spend for the rest of the year and for '28?

Okay. Out of the entire 2,200, 40% is already been spent.

The larger amount will be spent in next three quarters. We are hoping that the entire 95% 90% payment will be done by FY '27, and balance 10% will be done in FY '28 first quarter.

Sir. Balance 10% in FY '28.

Got it. That was it.

Am I audible, sir?

Hi Deepak. Yes.

Hi.

Yes, sir.

Thank you very much for this opportunity, sir. Sir, just wanted to understand now on the pricing front.

You mentioned that all the new business we are booking at higher prices, right? Already we have taken a price hike of 5% to 7%.

You would like to maintain the margins. The balance price hike you take in the range of 5% to 10% more because you mentioned your cost of production is increasing by 10% to 15%.

Just wanted to understand what's the price hike we are expecting and what is the sustainable margins we want to keep, given this scenario?

Rather than going into the specific numbers and all, which is very very risky on a call, I can only tell you that we'll be able to maintain the margins that we are now talking about. We will have higher margin than anybody else.

Okay. When we say maintain the margin, you're talking about this first quarter margin?

Yes. Last quarter, this quarter, not much different.

Yes, that 28%, 29% including other income, right? That's what we are talking about.

Yeah.

Fair point. My second question is on your Greentech business.

Can you throw some light on the potential of revenue from the anode capex that we are doing in TACC and plus the Bhilwara Energy, what sort of potential we are looking at? I'm not aware much on this Greentech part.

If you can just throw some light, it would be very helpful, yeah. What's the potential we are looking at in each of this segment in Greentech, yeah?

I can take that question quickly. For the anode project, it'll start commercial production Q1 of next year.

We hope to operate at around 40% to 50% capacity utilization, which should give us a revenue of around ₹600 to ₹700 crores in the first year, which would ramp up to more than ₹1,200 crores in year two, and in year three crossing around ₹1,500, ₹1,600 crores. Again, the margins that we are looking at without getting into more details, roughly an EBITDA margin of 35% under all these three numbers.

As far as Bhilwara Energy is concerned, we've got two hydro plants, which are totaling around 300 megawatts, and they give us a free cash flow of between 3 ₹320 to ₹350 crores of cash flow per year. Because both the projects are debt-free, and these are the free cash flow that will come in from these two projects.

Apart from that, we plan to put up one more hydro project, which will start operations by 2030, and one solar project, which will start operations in the next 18 months. Both of them combined should add another ₹200 crores of EBITDA over here.

Basically in a nutshell, from HEG Greentech, we can safely say by the year 2030, we should be aiming at a four-digit EBITDA between all the businesses combined.

Four-digit EBITDA. This solar project is coming in 18 months, and one more hydro project is coming by 2030?

Yeah, 2.5 years from today.

2.5 years, okay. Close to '29 maybe, yeah.

Right.

Yeah. What is the capacity of this hydro project?

This is 75 megawatts, and we've actually acquired this project from our previous partner, Statkraft. A lot of work around 30% of the work has already been done.

That's why I'm saying 2.5 years. Otherwise, the normal time for a hydro plant would be anywhere between 4 to 5 years.

We are saving on that 1 year because a lot of the tunneling, etc., work has already been done from before.

The solar project capacity?

Solar project, if it comes up, it's a 300-megawatt C&I project, which will just be a plain-vanilla solar project of around 300-megawatt DC capacity.

Okay. All these hydro projects are IPP, right?

The hydro projects are run-of-the-river IPPs with around 30% to 40% peak power. Average rate of selling, we've assumed that around ₹5.5, which surely we're going to attain this year because 30% to 40% of the power is sold as peaking power, which goes up as high as ₹10, ₹7, ₹8, and the regular power that you sell most of the time is around ₹4.

A weighted average would be around ₹5.5

plus. I got it.

That would be from my side. Just one last thing: the anode capex of ₹2,200 crores is for 20,000 capacity, right?

That's for 20,000 capacity. This 1 lakh

the expansion towards 1 lakh, that any plan we have firmed up or we have not firmed up any plan as of now?

No. Right now the land that we have is capable of taking around 30,000 tonnes.

As soon as we complete this particular project of 20,000 tonnes, we'll quickly take a decision of expanding it to 10,000 tonnes more. That would be done at a capex of around ₹800 crore rupees.

Okay. That would be from my side.

That facility would come up by 2029, not before that.

No, but this 20,000 is coming by first quarter of '28, it will hit your P&L FY '29 entire year, right?

Yes. FY '29 will be 100% there, and FY '28, it would be a kind of 40% capacity utilization.

Yeah. I think that's very useful, sir.

Wish you all the very best. Thank you so much,

yeah. We can send you all the details on Greentech on a separate call if whenever you need.

We

can just touch base

with Salil. Sure.

Thank you so much, yeah.

Thank you.

Since the start of the Middle East disruptions, what kind of needle coke price increase that we have seen happening in the industry? Do we see further...

See,

so far, I can't give a specific figure, but you can just take a ballpark number of between anywhere between $200, $250, or $300. There's a kind of increase we are now seeing because of this rise in oil prices and also increase in demand.

Going forward, we really can't comment because it is done quarter by quarter. Can't really say what happens next.

It all depends. We are just concluding quarter by quarter and, accordingly, pricing our products.

Just to clarify, it will not have a very immediate effect. Everybody carries stock of at least 3, 4 months, and then the process of converting needle coke to electrode itself is 3 to 4 months process.

The impact will not be there for let's say at least the next 3 to 4 months, 5 months.

Understood. In terms of sort of our improvement in EBITDA from 14 million, the segmental profit from 14 million to around 140 million in this quarter, is it primarily because of the improvement in the realization, or are there any cost elements which has also reduced, which has helped in this improvement?

There is improvement in realization, because as we carry old stocks of needle coke, needle coke prices remains there, and there is improvement in realization.

Would you be able to comment on regional trend in terms of are this improvement coming in any specific regions?

No. It is actually it's coming from everywhere.

Wherever, because these are global prices, whichever market, it's not that one market increasing and one market is not increasing at all. The quantum matters, differs from market to market, but when the price increase happens, it happens globally.

Right. Just second follow-up question was on the US regulatory actions.

There is a potential that the preliminary result can come by July and final could be come by September. What is our exposure to that market?

How much volume we sell into US at this point of time?

Hardly, I would say, less than about 10%.

About 10%.

That, because as a company like HEG, with our, we're very well entrenched in so many countries, all the major steelmaking nations, HEG is present. US is hardly 10% of our business.

It's fine. We'll see what comes.

As you rightly said, let me tell you a little more specific: CVD is by end July, dumping is by end September. We'll see what they come up with.

We know that we have not done dumping, that is for sure.

Understood. In terms of the outlook on the prices is primarily Would you be able to...

Sure.

Thanks for the opportunity again. If I try to understand the structure of Bhilwara Energy, the hydro power plant owning entity, it owns 51% stake in the Malana Power entity, and the balance was with Statkraft, which we bought in.

To buy that stake, how we paid around ₹1,200 crores...

How did we fund that amount? I'll come back again.

Is it clear?

I was saying that we bought 49% stake of Statkraft in Malana Power. How did we fund that?

See, we borrowed money, 50% from the commercial banks and 50% partly coming from the family office and partly from BEL.

Hello? Yes.

When you merge it with the Greentech entity, will any of that debt come on the books, is my question.

No, actually ₹600 crore is already there in the books of BEL through subsidiary. That will be there.

I think by that time, we will be retiring all these debts.

Got it. Second question is, post all the consolidation and when the Greentech business list separately, what will be the outstanding shares?

It will be around 39 crore around 39 crore shares, sorry, 32.9 crore shares.

32.9 crore shares. If we add the...

Sorry.

Got it, 32.9. Then there will be one more tranche of Singularity which is left to be used, I'm assuming.

No, it's done.

Okay. After everything, it is 32.9.

I'll explain you. Today, HEG share number of shares are around 19.7, 19.8.

There will be around around 13 crore shares which are being issued additionally, which is which is to be given to Singularity for their investment and for to the other shareholder which are promoter and RSWM Limited, who's the shareholder in BEL. After that, there is no fresh issuance of shares once this is being allotted.

Understood. My only question was that there were two tranches of Singularity, in 32.9 both tranches are covered?

Yeah. It already been done.

Done. Got it.

Sure. Thank you so much.

Okay.

Yeah. Am I audible?

You are.

Hello? Sir, congratulations on a great set of number.

Once again, just I wanted to understand a bit about America putting ADD and CVD. Let's say if ADD comes just in a hypothetical scenario, how are we looking to de-risk the volumes?

I think we sell around 20% of our revenue in America. How are we looking to de-risk the same?

What kind of contracts do we have with the players where we're selling? See,

first of all, it's not 20, it was 10. I said 10.

With the kind of presence we have in the other markets, God forbid, if it happens and if something comes which is totally unreasonable, it will not be difficult for us to absorb that volume in elsewhere. We will cross the bridge when we come to it.

Right now, it's a speculation what will come, what will not come. We'll see.

If it makes sense, yes, we'll be there. We would love to be there.

If it doesn't, we have alternate markets.

Okay. You are confident of the same that you'll be able to ship it to some other countries?

Totally. Totally.

Okay. That's it from my side, sir.

Thank you for the opportunity again. One question on the graphite electrode market.

The way if I understand the market, I think it's global market is around 600 kt for the UHP electrodes, and roughly 1/3 is supplied by the Chinese. Amongst the balance market, I think two Indian players and couple of larger Western players operate.

While we operate at around 90% utilization, the Western capacity utilization is still in the range of 60%, 65%. What gives us a confidence that the pricing can improve when the market is still sort of in a supply surplus?

Okay. Now you see, if you look at the figures since that COVID times, if you look at steel production of major steel-producing countries, they've been quite stagnating.

Today, I can safely say that steel industry utilization is even less than 75%. The moment the production starts to increase, and ex-China is more than 50% from electric arc furnace, the graphite electrode demand will grow.

The figures which you gave that the market of 600,000 and 200,000 is supplied by China, they tend to differ. It's not that number.

It is much less, maybe half of that. We are operating at higher capacity utilizations, as you rightly said.

That means we have market presence to be able to sell our product. We are all looking at the return of demand.

We are looking at the new electric arc furnaces. Please tell me if you have ever heard of a new blast furnace coming up in Europe or US.

No. Whatever capacities are coming are coming in electric arc furnaces.

There'll be increase of demand. One, by the production increasing; and second, that new EAFs coming, which will add to that steelmaking capacity.

Right. Primarily, I think it's tied to the return of demand on new EAF as and when it comes through.

If US market sort of levies the ADD or something, that market could become sort of relatively less lucrative for us. Then would we be more dependent on the demand coming up in Europe, which will decide where the prices would move and whether we can benefit from it?

Not just Europe, steel is produced in all parts of the world. It's Middle East, it's Turkey, and believe me, we will retain America.

American prices are higher than most of the others. We might lose some sort of a market share, but we're not going to leave that country.

Right. Sure.

Thank you.

Hello. Hi, sir.

My question has been answered. Thank you.

Thank you. Thank you for a large presence today and some very, very probing questions, which obviously mean that you guys are really focusing on HEG and the graphite industry.

I look forward to speaking to you in 3 months' time with maybe some better information, more knowledge. I can only tell you that we will produce at 90%, 95% capacity utilization come what may.

Thank you.

Thank you.