HEG, Graphite India Surge 12.5% Today; Key Drivers Revealed

19 Sep, 2024

HEG, Graphite India Surge 12.5% Today; Key Drivers Revealed

HEG's share price surged by 12.5% to ₹2,376 on Wednesday after ICICI Direct reiterated its 'Buy' rating with a target price of ₹2,520 per share. This recommendation was supported by the ongoing global shift towards Electric Arc Furnace (EAF) steelmaking, which emits 75% less carbon and reduces production costs compared to traditional methods. As one of the top 5 global producers of graphite electrodes, HEG stands to benefit significantly from this transition.

ICICI Direct projects a strong recovery in demand and pricing for graphite electrodes from the second half of FY25. With EAF capacity expected to grow significantly in the coming years, HEG is poised for further growth. The company is also planning a new venture with a 20,000-tonne graphite anode capacity, backed by a ₹1,800 crore investment.

On the global front, Resonac Graphite announced a 20% price hike on all new graphite electrode orders, further boosting HEG and its peer Graphite India. Since September 9, shares of HEG have risen by 18%, while Graphite India saw a 19.4% increase, outpacing the BSE Sensex’s 2.1% rise over the same period.