HEG Advanced Materials Q2 FY27 Results (NSE: HEGAM)
Signal: Margins at cyclical peak
The read
The immediate earnings trajectory is a structurally distorted post-demerger reset: Q2FY27 PAT rose 19.2% sequentially to ₹133.26 Cr but fell 29.2% YoY, while the company approved roughly ₹4,931 Cr of anode, crucible and graphene projects whose execution and funding will determine whether the new advanced-materials platform replaces the demerged graphite earnings base.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹534.16 Cr | -24.1% | -21.9% |
| Net profit | ₹133.26 Cr | -29.2% | |
| EPS | ₹5.48 | -33.3% | |
| EBIT margin | N/A |
P&L walk
Standalone Q2FY27 total revenue was ₹534.16 Cr, down 24.1% YoY and 21.9% QoQ, while PAT fell 29.2% YoY to ₹133.26 Cr; the comparison is distorted by the September 1, 2026 graphite demerger and classification as discontinued operations.
Segments
Graphite remained the earnings driver with ₹526.57 Cr revenue and ₹113.78 Cr PBIT, up 53.0% YoY, while Power dragged with ₹1.15 Cr loss versus ₹5.94 Cr profit a year ago; however, the graphite undertaking was demerged effective September 1, 2026.
Key positives
- Graphite PBIT was ₹113.78 Cr, up 53.0% YoY, despite graphite revenue falling 24.5% to ₹526.57 Cr, indicating improved segment profitability before its demerger.
- The company approved a revised ₹2,350 Cr Phase-I anode project for 20,000 MT with target COD by June 2027, plus a ₹1,606 Cr expansion to 44,000 MT by March 2029.
- The company approved a new 80,000-unit-per-year crucible plant costing approximately ₹475 Cr with target COD by September 2028 and a 500 MT graphene plant costing approximately ₹500 Cr with target COD by September 2028.
Key concerns
- Total revenue fell 24.1% YoY to ₹534.16 Cr and PAT fell 29.2% to ₹133.26 Cr; the demerger makes historical growth and margins difficult to interpret.
- Other income fell 63.0% YoY to ₹74.04 Cr, reducing a material source of reported profit support.
- Power moved from ₹5.94 Cr segment PBIT profit to a ₹1.15 Cr loss, while H1 operating cash flow fell to ₹131.53 Cr from ₹227.93 Cr.
- The approved advanced-materials program represents approximately ₹4,931 Cr of stated project cost, creating substantial execution and capital-allocation risk relative to the post-demerger asset base.
Research and educational content only. Not investment advice.