The shares of HEG extended their winning streak to the 3rd consecutive session, surging over 6% to reach a day high of ₹619.25 on December 5 on BSE. The surge came after a block deal worth ₹172 crore. At 10:30 AM on December 5, HEG shares were trading at ₹593.70 on the BSE, reflecting a rise of ~3%.
In the block deal, 28.8 lakh shares of HEG, representing a 6% stake in the company, were exchanged at an average price of ₹600 per share. The floor price for the deal was set at a premium of over 3% compared to the stock’s Wednesday closing price.
HEG shares saw a sharp 16% increase in the previous session, driven by reports that China has tightened its review of graphite exports to the US. The restrictions, including a ban on dual-use commodities like germanium and gallium, raised concerns about potential global supply shortages, boosting the stock’s performance.
HEG recently completed a significant capacity expansion at its graphite electrode plant, increasing production to 100,000 tonnes, making it the largest single-location facility in the Western world. The company aims to leverage this increase in output for cost advantages over competitors.
In the September quarter, HEG achieved an 80% capacity utilization rate, the highest globally, and expects to maintain this level throughout the year. Despite pricing pressure from reduced global demand, HEG remains optimistic about the medium- to long-term prospects for the industry. If China’s export restrictions cause a supply shortage, HEG stands to benefit from improved demand, further boosting its earnings growth.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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