HEG shares jump 6% after Rs 172 crore block deal; extend gains to third session

HEG shares are up 40 percent for the past week.

Shares of HEG extended its winning streak to the third session, surging over 6 percent to hit a near 6 year high of Rs 619 on December 5 after a block deal worth Rs 172 crore took place in the counter.

As many as 28.8 lakh shares of HEG, making up a 6 percent stake in the company changed hands on the exchanges at an average of Rs 600 per share. The floor price of the block deal sits at an over 3 percent premium to the Wednesday closing price of the stock. However, Moneycontrol could not immediately ascertain the parties involved in the transaction.

At 09.27 am, shares of HEG were trading at Rs 616.45 on the NSE. With this, the stock has clocked in stellar gains of over 40 percent in the past week.

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Shares of the graphite electrode manufacturer surged over 16 percent in the previous session, driven by reports that China has tightened its review of graphite exports to the US and effectively banned the export of dual-use commodities like germanium and gallium. The move sparked concerns about potential supply shortages in the global market.

HEG also recently completed a capacity expansion at its graphite electrode plant, increasing output to 100,000 tonnes, making it the largest single-location facility in the western world. The company aims to leverage this ramp-up to achieve cost advantages over other major producers.

In the September quarter, HEG recorded an 80 percent capacity utilisation rate—the highest globally—and expects to maintain this level for the remainder of the year. Despite reduced global demand putting pressure on pricing power, HEG remains optimistic about the industry's medium- to long-term prospects. In addition, if China's restrictions do lead to to a supply shortage, it would provide HEG with better demand prospects and aid its earnings growth.

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