Graphite India Reports Whopping Rise in Quarterly Profit

Graphite India, a major graphite electrode producer, has registered a massive surge in its quarterly revenue and profits.

Graphite India’s standalone revenue stood at INR 933.06 crore, reflecting an increase of 160.1% Y-o-Y. A recent growth of 165% Y-o-Y in graphite and carbon market is understood to be a key performer in the organization.

EBITDA for the quarter is registered at INR 518.55 crore, presenting an upsurge of 802% Y-o-Y while its margin swelled by 3955 basis points. In a similar context, EBITDA margin for the quarter was recorded at 55.6% as well, displaying the performance of Graphite India. A lower cost of materials to sales has been identified to have supported the huge gap in the margin, recorded at 19.2% in Q3FY18 against 35.1% in Q3FY17.

Graphite India further witnessed a profit of INR 340.5 crores Q3 FY2018 against INR 23.4 crores in Q3 FY2017, registering a massive increase of 1355% Y-o-Y. The net profit margin also reflected an outstanding result with the same being 36% in Q3 FY2018.

Mr K.K. Bangur, Chairman, Graphite India, has appreciated the growth of Indian steel Industry stating a growth of 6.2% Y-o-Y of the same in Q3 FY2018. He also mentioned the capacity utilization rate of the plants which increased by 10% Y-o-Y to 95% during the period. However, he hinted towards increasing raw material cost, which might affect their margins in the future. Nevertheless, he committed to optimizing the market position of the organization to make it more valuable to the stakeholders.

Albeit, such a performance, the stock price of Graphite India ended the trading session today on a negative mark, creating confusion among the investors. The graphite electrode industry has undergone a revival in demand as China embarks on its drive to shut down polluting industries. Driven by this, steel exports from China fell, with the industry slack taken up by electric arc furnace (EAF) players globally. Graphite electrodes are an essential consumable in the production of steel using EAF. Prices of needle coke – a major raw material used in graphite electrodes – have also risen to significant levels, driven by demand for graphite electrodes and very likely also from lithium-ion batteries, where needle coke has begun to be used. Graphite India Ltd. is one of the major manufacturers of graphite electrodes, accounting for 13% of world capacity.