Hold Graphite India; target Rs 81: Firstcall Research
Firstcall Research has recommended hold rating on Graphite India with a price target of Rs 81, in its May 27, 2013 research report.
Firstcall Research's report on Graphite India
"Graphite India is largest producer of graphite electrodes in India and one of the largest globally, by total capacity, reported its financial results for the quarter and year ended 31st March, 2013. The quarter witnesses healthy increase sales due to improved price realization coupled with higher sales volumes but decline the profit due an increase in working capital requirements and expensing of interest on capex incurred on the Durgapur plant expansion."'The company's net profit declines to Rs.415.70 million against Rs.1029.60 million in the corresponding quarter ending of previous year, a decrease of 59.63%. Revenue for the quarter rose 13.05% to Rs.5111.80 million from Rs.4521.70 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.13 a share during the quarter, registering 59.63% decrease over previous year period. Profit before interest, depreciation and tax is Rs.716.00 millions as against Rs.1343.00 millions in the corresponding period of the previous year."Also read: Graphite India standalone Mar '13 sales at Rs 511.18 crore"Outlook and Conclusion: At the current market price of Rs.73.60, the stock P/E ratio is at 8.50 x FY14E and 8.26 x FY15E respectively. Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.8.65 and Rs.8.91 respectively. Net Sales of the company is expected to grow at a CAGR of 6% over 2012 to 2015E respectively. On the basis of EV/EBITDA, the stock trades at 6.30 x for FY14E and 6.06 x for FY15E. Price to Book Value of the stock is expected to be at 0.79 x and 0.72 x respectively for FY14E and FY15E. In the medium term, the Company is well positioned to capitalize on the growing demand for graphite electrodes through its increased capacity and low cost manufacturing base. The Company has continued its penetration of new markets and clients as well as pursues value enhancing inorganic growth opportunities. We recommend 'HOLD' in this particular scrip with a target price of Rs 81 for Medium to Long term investment," says Firstcall Research report.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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