HEG shares fall nearly 10% due to weak Q3FY24 performance

HEG shares witnessed a decline of upto 10% as the company reported a lackluster performance in the third quarter of fiscal year 2023-24. With revenue amounting to ₹562 crore, reflecting an 8% dip from the previous quarter, the company faced challenges in maintaining its financial momentum.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) also experienced a significant downturn, standing at ₹87 crore, marking a 35% year-on-year decrease and a 15% quarter-on-quarter decrease. EBITDA margins plummeted to 15.4%, compared to 25.1% in the same quarter last year and 16.7% in the preceding quarter.

Advertisement

As of 11:00 am the shares were trading 5.35% lower at ₹1,667.80

Such a decline in margins has raised concerns among analysts, prompting them to await management commentary on potential strategies for margin recovery. This uncertainty has led to a negative sentiment surrounding HEG shares in today’s trading session. Despite short-term challenges, analysts hold a positive long-term view on the company, citing global trends favoring electric arc furnace (EAF) steelmaking and limited capacity expansion in the graphite electrode sector. Additionally, the company’s significant investments in manufacturing raw materials for lithium-ion cells further bolster their optimism.

However, the immediate impact of HEG’s weak Q3FY24 performance has led to a decline in share value, signaling investor caution amidst ongoing challenges.