Graphite India Ltd (GIL) has released its fourth-quarter results for FY20 ended in March this year and the numbers are quite disappointing. The company’s sales have registered a fall of 64% y-o-y at INR 602 crore against INR 1,693 crore in Q4 FY19.
Along with this, GIL’s profits have plummeted from INR 562 crore in Q4 FY20 to a net loss of INR 7 crore in quarter ended In Mar’20. On a consolidated basis, Graphite India reported capacity utilisation of 41%.
Graphite India reported a muted performance in Q4FY20 on the back of weak demand from the steel sector. However, in its post earning statement, the company has stated that lower volumes and realization has impacted the sales and margins on y-o-y basis in Q4 FY20. Volumes improved in Q4 FY20 as compared to Q3 FY20, however, sales were impacted due to lower realizations.
It also added the company’s operations were affected in the month of March 2020 due to the temporary shutdown of its factories in due compliance of the nationwide lockdown declared on 24th March 2020 by India on account of COVID-19 pandemic.
However, since mid- April the company’s operations/production has commenced in a phased manner adhering to the guidelines/permissions of government authorities as applicable.
Fiscal year performance: For FY20 (Apr’19 – Mar’20), Graphite India’s net profit fell 99% to INR 45 crore against INR 3,396 crore in FY19. Revenue from operations in FY20 declined 61% to INR 3,094 crore as against INR 7,858 crore in 2018-19.
Outlook: Going forward in the near term, the demand for graphite electrodes is expected to remain subdued due to partial closure of steel capacities globally, lower steel production and de-stocking of electrode inventory at customer end at a slower pace than anticipated, thereby adversely impacting demand prospects.
Graphite India is the largest electrodes producer in India with a total installed capacity of 98,000 tonne.
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