This company's stock has yielded 107% return in a year
HEG, a leading Indian graphite electrode manufacturer, has experienced a significant financial upswing. Its shares have rocketed from Rs. 920.70 to Rs. 1,902 in a year, marking an extraordinary 107% return for shareholders. Moreover, the company's stocks have climbed by 365% from their March 2020 low of Rs. 409, rebounding after a sustained decline from October 2021 to March 2023.
HEG: A global powerhouse in graphite electrode production
HEG, a division of the LNJ Bhilwara Group, is among the world's top producers of graphite electrodes. The company is renowned for its UHP (Ultra High Power) electrodes. With the world's biggest single-site graphite electrode factory under one roof, HEG boasts an expanded capacity of 100,000 tons per year. This positions it as the third-largest producer in the Western hemisphere.
ICICI Direct Research gives 'buy' rating to HEG
Brokerage firm ICICI Direct Research has given a 'buy' rating to HEG, pointing to structural demand drivers amid a worldwide shift toward the EAF method of steelmaking. The firm has set a target price of Rs. 2,420 per HEG share. This suggests an upside possibility of 27.3% from the stock's last closing price, indicating strong faith in the company's future performance.
Global transition to EAF route amplifies demand
The worldwide transition toward the EAF method for steel production, which cuts carbon emissions by roughly 75% compared to conventional methods like blast furnaces, is fuelling demand for graphite electrodes. The proportion of EAF in international crude steel production (barring China) has increased from about 44% in 2015 to nearly 50% in 2022. This trend is expected to persist, placing HEG advantageously as one of the top five global graphite electrode producers.