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HEG Ltd

| Audited Standalone Financial Results for the Quarter and Year Ended March 31, 2026

Report Source

⬤29th Apr 26

Summary : HEG reports mixed FY26 financials with profit, dividend, but quarterly loss and hydro project challenges.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Cost of materials consumed (Standalone FY26: ₹954.73 Cr, Consolidated FY26: ₹975.52 Cr).
  2. Employee benefit expenses (Standalone FY26: ₹123.53 Cr, Consolidated FY26: ₹123.68 Cr).
  3. Finance costs (Standalone FY26: ₹37.21 Cr, Consolidated FY26: ₹37.21 Cr).
  4. Depreciation and amortisation expense (Standalone FY26: ₹213.20 Cr, Consolidated FY26: ₹213.32 Cr).
  5. Power and fuel (Standalone FY26: ₹369.49 Cr, Consolidated FY26: ₹369.49 Cr).
  6. Other expenses (Standalone FY26: ₹607.20 Cr, Consolidated FY26: ₹613.60 Cr).
  7. Standalone FY26: Graphite (₹2,539.55 Cr), Power (₹28.95 Cr).
  8. Consolidated FY26: Graphite (₹2,532.19 Cr), Power (₹28.94 Cr), Others (₹7.37 Cr).
  9. Standalone Net Cash from Operating Activities FY26: ₹354.87 Cr (FY25: ₹318.99 Cr).
  10. Consolidated Net Cash from Operating Activities FY26: ₹213.19 Cr (FY25: ₹279.70 Cr).
  11. Standalone Net Cash used in Investing Activities FY26: (₹453.39) Cr (FY25: (₹246.36) Cr).
  12. Consolidated Net Cash used in Investing Activities FY26: (₹320.24) Cr (FY25: (₹208.45) Cr).
  13. Standalone Net Cash from Financing Activities FY26: ₹96.88 Cr (FY25: (₹159.13) Cr).
  14. Consolidated Net Cash from Financing Activities FY26: ₹96.88 Cr (FY25: (₹159.15) Cr).
  15. Standalone Total Assets FY26: ₹5,693.54 Cr (FY25: ₹5,345.81 Cr).
  16. Consolidated Total Assets FY26: ₹6,165.75 Cr (FY25: ₹5,648.16 Cr).
  17. Standalone Total Equity FY26: ₹4,303.17 Cr (FY25: ₹4,159.53 Cr).
  18. Consolidated Total Equity FY26: ₹4,757.92 Cr (FY25: ₹4,453.17 Cr).
  19. Standalone Current Borrowings FY26: ₹793.28 Cr (FY25: ₹584.86 Cr).
  20. Consolidated Current Borrowings FY26: ₹793.28 Cr (FY25: ₹584.86 Cr).
  21. Corporate Guarantee for TACC Limited (Wholly Owned Subsidiary) is a related party transaction, stated to be at arm's length.
  22. Both Standalone and Consolidated Audited Financial Results are presented.

Corporate Overview

  1. India (Mandideep, Noida)
  2. USA (Graftech International Limited - investment impact)
  3. Himachal Pradesh (Hydro Power projects)
  4. Chango Yangthang Hydro Power Limited (CYHPL) project surrendered due to socio-legal issues and non-availability of clearances.
  5. NJC Hydro Power Limited (NHPL) project on hold due to environmental clearance suspension and deemed not doable.
  6. Significant net loss on fair value of investments, including in Graftech International Limited.
  7. Reliance on State Bank of India for credit facilities for TACC Limited (subsidiary).
  8. Manufacturing and sale of Graphite electrodes.
  9. Power generation through Hydro Power Plant.
  10. Investments in Portfolio Management Services (PMS) and inter corporate loans through subsidiary.
  11. Management is confident of recovering upfront fees and security deposits for surrendered hydro projects.
  12. Graphite
  13. Power
  14. Others
  15. Hydro Power Plant operations are seasonal and intermittent.
  16. Financing arrangements for TACC Limited project, including additional equity/support and security creation.
  17. CYHPL acquired 49% equity in Malana Power Company Limited (MPCL) and plans to acquire remaining 51% to consolidate hydro power assets.

Risk Factors

  1. Hydro power projects face litigation.
  2. Significant fair value investment losses.
  3. New Labour Codes increase expenses.
  4. Subsidiary project on hold.

Key Drivers

  1. Final dividend recommended for shareholders.
  2. Unmodified audit opinion received.
  3. Strategic hydro asset consolidation plans.
  4. Financing secured for subsidiary project.

Auditor’s Report

  1. Unmodified opinion on Standalone Annual Financial Results.
  2. Unmodified opinion on Consolidated Annual Financial Results.
  3. Chango Yangthang Hydro Power Limited (CYHPL) project surrendered due to socio-legal issues and non-availability of clearances; company is demanding refund of upfront premium and security deposit.
  4. NJC Hydro Power Limited (NHPL) project on hold due to environmental clearance suspension and deemed not doable; company is seeking refund of ₹25.47 crores from GoAP, matter under arbitration.

Board Commentary

  1. Continuation of Shri Shekhar Agarwal as Non-Executive Non-Independent Director.
  2. Re-appointment of N. D. Birla & Co. as Cost Auditor for FY 2026-27.
  3. Re-appointment of S.L. Chhajed & Co. LLP as Internal Auditor for FY 2026-27.
  4. Re-appointment of SCV & Co. LLP as Tax Auditor for FY 2025-26.
  5. Final dividend of Rs. 3.40/- per Equity Share (face value Rs. 2/-) recommended for FY 2025-26, subject to shareholder approval.
  6. No financial/operational impact foreseen from the invocation of guarantees for TACC Limited.
  7. Impact of new Labour Codes (Code on Wages, Industrial Relations Code, Code on Social Security, Occupational Safety, Health and Working Conditions Code) on employee benefit provisions.
  8. Ongoing litigation/arbitration for hydro power projects (NHPL, CYHPL).
  9. Approval for creation of security in favour of Lender/Security Trustee for TACC Limited (Wholly Owned Subsidiary).
  10. Corporate Guarantee provided for State Bank of India credit facilities up to ₹1,239 crore availed by TACC Limited.
  11. Security creation includes pledge of 51% equity shares of TACC, non-disposal undertaking for 49% equity shares, and hypothecation over unsecured loans/quasi-equity contributions.
  12. Acquisition of 49% equity in Malana Power Company Limited (MPCL) by CYHPL, with plans for further acquisition and merger.

Corporate Governance

  1. Amended 'Code of Conduct for Procedure of Fair Disclosure of Unpublished Price Sensitive Information' adopted.
  2. Continuation of Non-Executive Non-Independent Director Shri Shekhar Agarwal.
  3. Audit Committee and Nomination and Remuneration Committee are involved in board appointments.

Management Discussion & Analysis

Future Strategy

  1. Consolidating hydro power assets through acquisitions and mergers (MPCL with CYHPL).
  2. Exploring new business opportunities for Bhilwara Infotechnology Limited (BIL).

Risk Control Measures

  1. Management is confident of recovering funds for surrendered hydro projects (CYHPL, NHPL).

Critical Risks

  1. Socio-legal and environmental clearance issues affecting hydro power projects (CYHPL, NHPL).
  2. Litigation and arbitration for refund of upfront premiums and security deposits for hydro projects.
  3. Volatility in fair value of investments, leading to significant losses.
  4. Increased employee benefit expenses due to new Labour Codes.