Jul 12, 2012, 08.23 AM IST | Source: Moneycontrol.com

Buy Graphite India; target of Rs 102: Firstcall Research

Firstcall Research is bullish on Graphite India and has recommended buy rating on the stock with a target of Rs 102 in its July 2, 2012 research report.

Firstcall Research is bullish on Graphite India and has recommended buy rating on the stock with a target of Rs 102 in its July 2, 2012 research report.

“Graphite India Ltd is the largest producer of graphite electrodes in India and one of the largest globally, by total capacity. Its first Plant at Durgapur in East India in collaboration with Great Lakes Carbon Corporation of USA was commissioned in 1967. The company its combined manufacturing capacity of approximately 78,000 tonnes per annum is spread over four plants - 3 in India at Durgapur (34KT), Bangalore (13KT), Nashik (13 KT) and the 4th in Nurnberg, Germany (18KT). The Company accounts for approximately 6.5% of global electrode capacity. The Company has over 40 years of expertise in the industry and is globally competitive. With its corporate office in Kolkata, India, the Company services its clients in over fifty countries. Graphite India manufactures the full range of graphite electrodes but stays focused on the higher margin, large diameter, ultra-high power (‘UHP’) electrodes. Approximately 85% of the Company’s total capacity is currently UHP.”

“Graphite India is well poised in the global graphite electrode industry through its quality, scale of operations and low cost production base. The Company also has facilities designed for the manufacture of Calcined Petroleum Coke (30 KT), Impervious Graphite Equipment and Glass Reinforced Plastic Pipes and Tanks. It has an installed capacity of 33 MW of power generation through hydel and multi-fuel routes. Graphite India Ltd conducts business with a respect for the environment at every stage of its product cycle across all its plants. As a result, the company is committed to sustainable development. The Graphite India Ltd products are produced at state-of-the-art ISO 14001:2004 and DIN EN ISO 9001:2008 certified manufacturing facilities.”

“Graphite India Ltd has reported net profit of Rs 1029.60 million for the quarter ended on March 31, 2012 as against Rs 445.40 million in the same quarter last year, an increase of 131.16%. It has reported net sales of Rs 4521.70 million for the quarter ended on March 31, 2012 as against Rs 3030.50 million in the same quarter last year, a rise of 49.21%. Total income grew by 48.19% to Rs 4740.70 million from Rs 3199.10 million in the same quarter last year. During the quarter, it reported earnings of Rs 5.27 a share.”

“At the current market price of Rs.90.50, the stock is trading at 5.94 x FY13E and 5.12 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.15.23 and Rs.17.67 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 23% and 26% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 3.94 x for FY13E and 3.44 x for FY14E. Price to Book Value of the stock is expected to be at 0.95 x and 0.80 x respectively for FY13E and FY14E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 102 for medium to long term investment,” says Firstcall Research report.

Non-Institutions holding more than 90% in Indian cos

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