Hold Graphite India; target of Rs 500: ICICI Direct

ICICI Direct recommended hold rating on Graphite India with a target price of Rs 500 in its research report dated February 17, 2021.

Broker Research

February 18, 2021 / 14:44 IST

26 Aug, 2025 12:21

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ICICI Direct's research report on Graphite India

Graphite India (GIL) reported a mixed set of Q3FY21 numbers wherein while it reported loss at EBITDA level, at the net level its reported profit aided by healthy other income. For Q3FY21, on a consolidated basis, GIL reported capacity utilisation of 65% against our estimate of 75%. Consolidated topline came in at Rs 499 crore against our estimate of Rs 545 crore. For consolidated operations, in Q3FY21, GIL reported EBITDA loss of Rs 74 crore compared to our estimate of EBITDA profit of Rs 27 crore. During the quarter, GIL’s consolidated other income was at Rs 142 crore, higher than our estimate of Rs 55 crore. Other income for the quarter was aided by one-time income of Rs 81 crore on account of electricity refund. Ensuing consolidated PAT for the quarter was at Rs 23 crore. Going forward, we expect GIL’s operational performance to improve from Q3FY21 levels.

Outlook

The pick-up in steel production globally is expected to drive demand for graphite electrodes, auguring well for GIL. Going forward, for FY21E, FY22E, FY23E on a consolidated basis we model capacity utilisation of 62.5%, 72%, 75%, respectively. We introduce FY23E estimates & roll over our valuations to FY23E. We value the stock at 6x FY23E EV/EBITDA and arrive at a target price of Rs 500 (earlier Rs 185). We maintain HOLD rating on the stock.

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