ICICI Direct recommended hold rating on Graphite India with a target price of Rs 80 in its research report dated December 02, 2016.
Graphite India reported healthy capacity utilisation for Q2FY17. Capacity utilisation was at 75%, higher than our estimate of 65% (capacity utilisation of 63% in Q2FY16 and 68% in Q1FY17). Hence, we have upward revised the consolidated capacity utilisation level to 70% for FY17E (from 65% earlier) and to 75% for FY18E (from 70% earlier). We have valued the company at 6.5x FY18E EV/EBITDA thereby arriving at a target price of Rs 80, with a HOLD recommendation on the stock.
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