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Graphite India Surges 2.15% After Strong Q3 Results

05 August 20226 mins read by Angel One
Graphite India Surges 2.15% After Strong Q3 Results
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The shares of Graphite India rose 2.15% to Rs. 491.65 on 15 February 2022 after a strong return of profits for the December 2021 quarter of FY 2021-22. The company has announced a 76.35% increase in net sales to Rs. 880 crores in Q3 FY 22 over Rs. 499 crores in Q3 FY 21.

Its consolidated net profits have increased to Rs. 132 crores in this quarter, an increase of 473.91% from Rs. 23 crores in last year. According to Graphite India, the recent announcement of government spending on the country’s infrastructure and the revival of certain key sectors led to such strong financials.

On 16 February, the shares of Graphite India opened at Rs. 499.95 and were trading at Rs. 510, up by 3.58% as of 12 PM on the NSE. Now, let us take a deeper dive into the details of this company and its shares.

A Brief Overview of Graphite India

Graphite India Limited (GIL) started in 1964 as a collaboration with GLCC (Great Lakes Carbon Corporation), with its first facility set up in Durgapur. Today, this company is India’s largest producer of graphite electrodes on a total capacity basis. These electrodes are a consumable item for the steel industry and are used for EAF (electric arc furnace) steel mills.

Besides graphite electrodes, GIL is engaged in manufacturing steel, graphite equipment and GRP (glass reinforced plastic) pipes and tanks. It also produces anodes, CPC (Calcined Petroleum Coke), flexible graphite sheet and tubes and other miscellaneous products. The company has two business segments:

  1. Graphite and Carbon Segment – This includes producing and processing miscellaneous carbon and graphite products.

  2. Others Segment – This includes manufacturing GRP pipes, high-speed steel, alloy steel and power generating units for sale.

Graphite India’s has manufacturing plants in Bengaluru, Durgapur, and Nashik. It also has a coke plant in Barauni, Bihar, for producing carbon paste, CPC, and ECAP (Electrically Calcined Anthracite Paste). Additionally, the company has set up an 18MW hydel power plant in Karnataka.

GIL also undertakes R&D (research and development) activities. Some of its latest research has gone into carbon-carbon composites for defence aircraft and unexplored speciality applications of graphite.

The company owns subsidiaries like Carbon International Holdings NV and Graphite International BV. 65% of its production is exported to overseas markets, including around 50 countries.

Graphite India’s Financial Performance in FY 22

The company reported a strong financial performance for Q3 FY 22, showing a 76.35% increase in total income from operations. Its net profits after minority interest and loss from associates had increased by around 474% from the previous year.

On a consolidated basis, its PBT (profit before tax) had surged 254% to Rs. 184 crores on a YoY (year-on-year) basis. Graphite India’s EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 198.53% to Rs. 203 crores from Q3 FY 21. Meanwhile, its EBITDA margin stood at 23% in Q3 FY 22 against 14% for the last fiscal.

A key reason for such strong financials was the Government of India’s recent proposal to increase spending on the country’s infrastructure. Moreover, a revival in sectors such as mining, construction, automobile, and capital goods likely led to a rise in steel production and, thus, the company’s business. Withdrawal of custom duty on scrap imports in India also helped.

Now let us take a look at the company’s financials for FY 2021-22.

Particulars for the Quarter

December 2021

September 2021

June 2021

March 2021






Total Operating Expenses





Net Profit after Taxes





Note: All values are in Rs. Millions

Share Price Performance for Graphite India

After the announcement of GIL’s Q3 results, its shares surged 2.15% Rs. 491.65 on 15 February 2022. The stocks had hit lower levels in November and December 2021, but since the start of 2022, it has shown a sharp upside trajectory. As of 10 February 2022, the stocks showed a 5% jump YTD (year to date) from Rs. 510 to Rs. 535 per share.

Both NSE Nifty and BSE Sensex, in contrast, delivered zero returns during this period while BSE Mid-Cap Index went down by 2%. According to various stock market experts, Graphite India shares had hit the death cross pattern in November 2021 as its 50 DMA declined below its 200 DMA.

However, they recovered to their 52-week low levels at Rs. 396 at the end of 2021. After the New Year 2022, it bounced back from its lower levels, climbing to an intraday high of Rs. 543 on 10 February 2022. That is why experts have said that these are high beta stocks and will likely reach Rs. 600 followed by Rs. 650 in the short term.

Parting Thoughts

Some experts are very optimistic about Graphite India’s stock and have recommended ‘hold and buy’ ratings for investors. However, other experts have stated that the stock may display a bullish or bearish trend, rising to Rs. 600 levels or falling to Rs. 450 apiece. Thus, investors may want to exercise caution and do adequate research before investing.

Frequently Asked Questions

  1. How have the stocks of Graphite India performed recently?

As of 2:06 PM 16 February 2022, Graphite India shares have fallen 7.38% from Rs. 538.90 to Rs. 513.60. From the start of 2022, the shares have jumped 0.84% YTD from Rs. 507.90 to Rs. 513.60.

  1. What was Graphite India’s annual financial status for FY 21?

As of 31 March 2021, Graphite India had seen a decrease in revenue from Rs. 30,935 million in FY 20 to Rs. 19,576.20. It experienced a net loss of Rs. 192.50 million from net profits of Rs. 127.30 million in the previous year.

  1. How much did Graphite India spend on various expenses in Q3 FY 22?

GIL’s total expenses increased to Rs. 759 crores, up 29.52% from Q3 of the previous year. Its power and fuel expenses increased 67.11% to Rs. 127 crores while the cost of raw materials rose by 71.37% to Rs. 425 crores.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.

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