HEG credits needle coke prices for accrued margins in Q3

HEG, manufacturer and exporter of Graphite Electrodes in India, has reported impressive numbers for Q3. In an interview with CNBC-TV18’s  Nigel D'Souza and Sumaira Abidi, Raju Rastogi, CFO, HEG shared his views on the company’s financial performance and the road ahead.Below is the verbatim transcript of the interview on CNBC-TV18:Q: This quarter your numbers were absolutely splendid, what was different in the past six months because otherwise your numbers weren’t looking very good?A: Our first six months of FY13-14 was weak because of the order book and secondly, we used this first six months in manufacturing products which were taking longer period of time. So we were well prepared for servicing our customers in the second half. Our second half had a strong order book, we are in the process of delivering the order book which is robust, and we hope to achieve 100 percent capacity utilization in the coming quarter as well.

Q: What is your order pipeline for Q4 looking like and what will you end the year with?A: Our order book for Q4 will keep us occupied 100 percent of our capacity which is 20, 000 tonnes for the quarter and our revenue would be higher than Q3 that we have reported in December quarter. Q: In this kind of an environment your margins have been going higher and it is not that graphite prices really have been going much higher, off late they are quite soft actually, can you take us through both, realizations on graphite as well as your margins at around 20 percent, and can you maintain it?A: The margins have been good primarily due to the needle coke prices, which are continuously under pressure over the last two quarters. So with the prices of electrodes being consistent and been maintaining, the needle coke prices, which is our primary raw material, has yielded this incremental margin that we got in Q3 and this will continue in Q4 as well.