Graphite India Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Growing EAF production points to healthy demand prospects Due to stringent environmental norms, China has shut ~155-160 million tonne (MT) of largely unaccounted induction furnace capacity along with ~115 MT steelmaking capacity in 2016-17. These capacity cuts have led to steel export reduction by ~40% from the region, thereby encouraging steel production via EAF route in other countries. Industry sources indicate globally ~55 MT of EAF steel production was added in 2017. On...

Riding the golden wave of GE, retain Hold We continue to remain positive on prospects of Graphite India (GIL) led by our view of electrode industry remaining in an upcycle for next few years as postulated in our recent sector report. We continue to expect extremely strong earnings trajectory for GIL in next few years with peak earnings in FY19E and moderation kicking in from FY20E/21E. GIL remains the best bet to play the electrode upcycle with healthy balance sheet, strong adj. FCF generation, high dividend payout and strong management pedigree. GIL reported another record earnings performance...

decline in both steel and graphite electrode exports from China on 1467.8 3266.0 6685.3 6933.2 account of capacity closures. Going forward, on the back of sustained 39.6 1444.2 3428.9 3485.3 increase in graphite electrode prices, we believe there is more leg room...

Golden times continue getting better, retain Hold We continue to remain positive on prospects of Graphite India (GIL) led by our view of electrode industry remaining in an upcycle for next few years as postulated in our recent sector report. We continue to expect extremely strong earnings trajectory for GIL in next few years with peak earnings in FY19E and moderation kicking in from FY20E. GIL remains the best bet to play the electrode upcycle with healthy balance sheet, strong adj. FCF generation, high dividend payout and strong management pedigree. Q4 results were well above expectations and...

ICICI Securities Ltd | Retail Equity Research Graphite India's Q4FY18 performance was broadly in line with our estimates. Income from operations were at | 1212.2 crore (up 225% YoY, 30% QoQ), higher than our estimate of | 1173.3 crore EBITDA for the quarter came in at | 668.6 crore, higher than our estimate of | 612.2 crore. The subsequent EBITDA margin was at 55.2% (our estimate of 52.1%, Q4FY17: 3.9% and Q3FY18: 55.6%) The company reported other income of | 37.0 crore, depreciation of...

ICICI Securities Ltd | Retail Equity Research Graphite India (GIL) reported a stellar Q3FY18 performance. On the back of higher-than-expected realisations, the performance was significantly higher on all fronts. The company reported a capacity utilisation of ~95% in line with our estimates. Income from operations...

Both HEG and Graphite India, domestic graphite electrode stocks, have seen a sharp run up on the bourses in the last few months. A sustained positive outlook on the global graphite electrode segment coupled with healthy realisations of both global and domestic manufacturers has driven the strong rally. Key triggers have been: 1) consolidation of graphite electrode market globally, 2) ~20% of the global graphite electrode capacity (ex-China) shutting down in the last three years, 3) increase in steel production through EAF route (outside China) coupled with an...

Graphite India has been one of the good wealth creators for investors with the stock price nearly multiplying ~3.3x since our Sector Update in July, 2017. However, we believe there is more leg room in the stock price appreciation given the bright outlook of the global graphite electrode sector. Graphite India is the largest producer of graphite electrodes by capacity in India and accounts for 12.6% of global capacity (ex-China). Multiple triggers put graphite electrode industry in sweet spot The fortunes of the graphite electrode sector have been on an uptrend....

Graphite India (GIL) reported a good operational performance for the quarter. For Q1FY18, GIL reported healthy capacity utilisation levels of 95%. The raw material cost (as a percentage of sales) came in lower QoQ & YoY, supporting EBITDA margins. EBITDA margins came in at 10.1% (up 618 bps QoQ and 632 bps YoY) Gross income from operations was at | 376.3 crore. After adjusting for...