Q3FY21 Result Update - Graphite India - ICICI Direct

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.

Valuation & 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.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GraphiteIndia_Q3FY21.pdf

Shares of GRAPHITE INDIA LTD. was last trading in BSE at Rs.472.2 as compared to the previous close of Rs. 486.7. The total number of shares traded during the day was 121226 in over 6785 trades.

The stock hit an intraday high of Rs. 495.05 and intraday low of 466.15. The net turnover during the day was Rs. 58108373.

Source : Equity Bulls

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