Buy Graphite India; target of Rs 1400: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's research report on Graphite India

For Q2FY19, Graphite India reported an outperformance on all fronts. The company reported a consolidated topline of Rs 2345 crore (up 344% YoY, 19.3% QoQ) higher than our estimate of Rs 1990 crore Consolidated EBITDA for the quarter was at Rs 1640 crore (our estimate: Rs 1249 crore). EBITDA margin was at 69.9% (vs. Q2FY18: 27.3%, Q1FY19: 73.1%, our estimate: 62.8%). On a QoQ basis, raw material cost (as percentage of sales) increased to 18.1% from 14.8% in Q1FY19 leading to a moderation in EBITDA margin from Q1FY19 Consolidated PAT was a robust at Rs 1113 crore higher than our estimate of Rs 857 crore.

Outlook

We continue to remain positive on the graphite electrode space and value the stock at 10x FY20E EPS of Rs 140 implying a target price of Rs 1400. We maintain BUY rating.

For all recommendations report, click here

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