HEG Advanced Materials Limited reports ₹122.34 crore Q1 profit

HEG Advanced Materials Limited reported consolidated revenue of ₹680.79 crore and net profit of ₹122.34 crore for the quarter ended June 30, 2026. Revenue rose 11.10% year-on-year and 12.86% sequentially, while profit recovered from a ₹113.77 crore loss in the March 2026 quarter.

What did HEG Advanced Materials report for Q1 FY27?

HEG Advanced Materials reported a marked sequential improvement in its June 2026 quarter, supported by a recovery in operating profitability. Revenue was ₹680.79 crore, compared with ₹603.21 crore in the preceding quarter and ₹612.80 crore in the year-earlier June quarter, based on the quarterly financial data provided.

Operating profit increased to ₹150.58 crore from an operating loss of ₹148.29 crore in the March quarter. The operating profit margin consequently improved to 22% from negative 25% in the preceding quarter. Profit before depreciation and tax stood at ₹214.67 crore, against a loss of ₹87.32 crore in Q4 FY26.

Profit before tax was ₹165.08 crore, compared with a ₹139.91 crore loss in the prior quarter. Net profit was ₹122.34 crore, versus a loss of ₹113.77 crore in Q4 FY26. The reported net profit was also 16.71% higher than the June 2025 quarter, while earnings per share were ₹6.34 against ₹5.43 a year earlier.

Why did operating profitability improve in the June quarter?

HEG Advanced Materials' operating recovery reflected lower expenses relative to revenue compared with the March quarter. Expenses were ₹530 crore in Q1 FY27, down from ₹752 crore in Q4 FY26, even as revenue increased by nearly ₹78 crore sequentially. This change moved the company from an operating loss to a positive operating profit.

The supplied company information also said capacity utilisation remained above 90% during the quarter. That level was stated to be higher than the 60% to 65% utilisation cited for global peers. The core graphite electrode business remained the principal contributor to the company's operations before the proposed separation.

Other income was ₹74 crore in the June quarter, compared with ₹72 crore in the March quarter. Interest expense fell to ₹10 crore from ₹11 crore, while depreciation was ₹50 crore compared with ₹53 crore. These movements, along with the operating turnaround, supported the return to profit at the pre-tax and net-profit levels.

How important is graphite electrodes to HEG Advanced Materials?

Graphite electrodes have been the dominant revenue source for HEG Advanced Materials, accounting for about 99% of FY26 revenue before the proposed demerger. The company reported standalone FY26 revenue of ₹2,569 crore and profit after tax of ₹181 crore for the year ended March 2026.

About 67% of FY26 revenue was exported to more than 40 countries, according to the information provided. This makes overseas demand relevant to the company's performance, while also placing its earnings in the context of global graphite electrode market conditions.

The quarterly results show that the business has experienced meaningful fluctuations in profitability. Operating profit was ₹143 crore in the December 2025 quarter before falling to a ₹148 crore operating loss in the March 2026 quarter. The June-quarter profit recovery therefore follows a period of elevated cost pressure and weaker March-quarter financial performance.

What is the status of the proposed business separation?

HEG Advanced Materials has disclosed a Composite Scheme of Arrangement under which the graphite electrodes business is intended to move to HEG Graphite. The existing listed company is expected to retain the advanced materials, battery energy solutions and green power businesses under the HEG Advanced Materials name.

The company said the National Company Law Tribunal had reserved its final order on the scheme as of July 2, 2026. The filing did not provide a final implementation date in the information supplied. Until the process is completed, the historical financial profile remains predominantly linked to graphite electrodes.

The planned separation is material for investors because the current revenue base is concentrated in the graphite electrode operation, while the listed entity is intended to hold the other identified businesses after the arrangement. The relevant regulatory order and subsequent company disclosures will determine the timing and structure of the change.

What does the Q1 result mean for investors and operations?

The Q1 FY27 result shows that HEG Advanced Materials returned to profitability after the March-quarter loss, with revenue, operating profit and net profit all improving sequentially. The 22% operating margin also compares with 17% in the June 2025 quarter, indicating stronger operating performance based on the reported quarterly figures.

No share-price movement was provided, so the immediate stock-market response cannot be assessed from the available data. For investors, the key disclosed indicators are the recovery in core earnings, utilisation above 90%, the company's export exposure, and the pending tribunal order on the business separation.

The company has also announced a board meeting for approval of unaudited financial results for the quarter and half year ended September 30, 2026. The agenda includes implementation of the HEG Advanced Materials Limited Employee Stock Option Plan 2026 and other business matters. An earnings conference call intimation for Q2 FY27 was issued on October 29, 2026.

Conclusion

HEG Advanced Materials delivered a profitable June quarter after reporting a loss in the preceding three months. Revenue of ₹680.79 crore, operating profit of ₹150.58 crore and net profit of ₹122.34 crore indicate a substantial sequential recovery, while the company continued to report high capacity utilisation in its core business.

The next scheduled result date is November 3, 2026, when the company is expected to report results for the September quarter. Investors will also monitor the NCLT's final order on the Composite Scheme of Arrangement and any further disclosures on the transfer of the graphite electrode business to HEG Graphite.