HEG shares surge 10% as Q1 results surprise

Shares of HEG Ltd rose 10% on BSE after its April-June earnings beat analyst expectations and expansion in margins came as a positive surprise to investors.

The company's net profit more than doubled to Rs 71.7 crore, while revenue grew 37% to Rs 384 crore. Its EBITDA margins rose 11% year-on-year to 27% in the quarter, which surprised analysts but continued to remain a concern.

"We believe, it could be difficult for the company to maintain such margins in the coming quarters especially in the current scenario, as slowing demand could impact the realizations of graphite electrode and coal supply under the present uncertainty can become an issue," said analysts at Emkay Global in a note to clients.

"Weakening demand, we feel may provide some pressure on the global graphite electrode prices, however, Indian producers are likely to get benefited by weak INR for the near term," they added. HEG shares closed at Rs 225.70 on BSE, 10.8% above their previous close.