Graphite India Ltd share Price

Graphite India (GIL) is the largest Indian producer of graphite electrodes by total capacity. Its manufacturing capacity of 98000 tonnes per annum is spread over three plants at Durgapur & Nashik in India & Nuremberg in Germany.

• While GIL manufactures a full range of graphite electrodes, it stays focused on the higher margin, large diameter, ultra-high power (UHP) electrodes
• GIL has over 40 years of technical expertise in the industry

GIL reported a subdued performance in Q4FY22. Muted performance from German operation impacted overall consolidated performance. German operations were impacted by sharp increase in electricity & gas prices.

• For the quarter, GIL reported a standalone capacity utilisation of 92% compared to 85% in Q4FY21 and 99% in Q3FY22. Standalone topline for the quarter was at ₹ 767 crore, up 36% YoY but down 8% QoQ. Standalone reported EBITDA for the quarter was at ₹ 107 crore, down 16% YoY, 32% QoQ. Ensuing standalone PAT for the quarter was at ₹ 122 crore, up 7% YoY but down 21% QoQ
• For the quarter, GIL reported consolidated capacity utilisation of 76% compared to 73% in Q4FY21 and 90% in Q3FY22 (our estimate of 92%). Consolidated topline for the quarter was at ₹ 844 crore, up 49% YoY but down 4% QoQ
• Consolidated reported EBITDA for the quarter was at ₹ 88 crore, up 13% YoY but down 36% QoQ. Ensuing consolidated PAT for the quarter was at ₹ 95 crore, up 48% YoY but down 29% QoQ

Industrial goods company Graphite India announced Q1FY24 results:

• Consolidated Q1FY24:
  • Net sales of Rs 747 crore, a decline of 13.7% YoY and 8.3% QoQ
  • EBITDA of Rs (13) crore as compared to Rs 59 crore in Q1FY23
  • Net loss of Rs 30 crore as compared to Net Profit of Rs 24 crore in Q1FY23
  • EPS of Rs (1.56) per share
  • Gross debt of Rs 360 crore
  • Cash (net of gross debt) of Rs 2,115 crore
• Standalone Q1FY24:
  • Net sales of Rs 720 crore, a decline of 9.8% YoY and 1.0% QoQ
  • EBITDA of Rs (14) crore as compared to Rs 97 crore in Q1FY23
  • Net loss of Rs 27 crore as compared to Net Profit of Rs 63 crore in Q1FY23
  • EPS of Rs (1.39) per share
  • Gross debt of Rs 280 crore
  • Cash (net of gross debt) of Rs 1,942 crore

K K Bangur, Chairman, Graphite India, said, "In Q1FY24 Graphite India registered Consolidated Net Sales of Rs 747 crore, a decline of 13.7% YoY and a decline of 8.3% on QoQ basis. Operating EBITDA was Rs (13) crore after the provision of inventory write-down of Rs 157 crore which resulted in a Net Loss of Rs 30 crore. The standalone capacity utilization during the quarter was 67% as compared to 80% in Q1FY23. This quarter’s financial results were impacted due to a decline in both realization and volume.

Globally, there has been a 1.7% decline in YoY steel production, mainly attributed to subdued demand for electrodes. This has led to reduced capacity utilization and pricing pressures across the industry. Despite this trend, India has displayed resilience, achieving a substantial 7.8% YoY growth in its steel output during Q1FY24. However, the increased availability of imported graphite electrodes has impacted domestic demand and pricing. Raw Material price correction was not aligned with the fall in electrode price impacting operating margins.

Higher government spending on infrastructure and increased traction of EAFs in the steel industry will drive medium to long-term growth in coming quarters. Stringent emission regulations enforced by the governments globally are compelling the steel industry to seek the more efficient EAF steelmaking technology, will positively impact the demand for graphite electrodes going forward.

From a balance sheet perspective, we maintain a strong consolidated Net Cash position of Rs 2,115 crore at the end of June 2023. We are pleased to announce that on August 07, 2023, Graphite India sold its land in Bengaluru for a cash consideration of Rs 986 crore, which was received in a single tranche. This will be reflected in our H1FY24 Net Cash position.

Overall, Graphite India's outlook on the electrode industry's future remains positive. We continue to adopt efficient operational practices and exercise prudent financial management."

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