Are HEG Ltd latest results good or bad?

HEG Ltd's latest financial results for Q3 FY26 highlight a significant year-on-year growth in both net profit and net sales, showcasing the company's operational excellence. The consolidated net profit reached ₹206.97 crores, reflecting a remarkable 148.17% increase compared to the same quarter last year. Additionally, net sales amounted to ₹656.33 crores, which is a 37.20% rise year-on-year, although there was a sequential decline of 6.13% from the previous quarter. The operating margin, excluding other income, stood at 21.69%, marking the highest level in eight quarters, indicating improved operational efficiency. The profit after tax margin also saw a substantial increase to 31.53%, up from 20.50% in the prior quarter, which demonstrates the company's ability to convert revenue growth into profitability effectively. Despite these strong results, there was a cautious reaction from investors, leading to a decline in the stock price following the announcement. This response may reflect concerns regarding the sustainability of the current profit margins and the company's valuation, as it trades at a relatively high price-to-earnings ratio. Overall, HEG Ltd's performance in Q3 FY26 illustrates a strong recovery trajectory, supported by favorable industry dynamics and operational improvements. However, the company experienced an adjustment in its evaluation, suggesting that market perceptions may be weighing on its current valuation amid ongoing uncertainties in the cyclical graphite electrode market.