Gladiator Stocks - Graphite India - ICICI Direct

Technical View

• The Nifty metal index is on the cusp of generating a resolute breakout above last five months range (6312-5174) with a higher base formed in the vicinity of 200 days EMA, highlighting robust price structure. We expect the metal stocks to continue with its relative outperformance. Preferred picks within the midcap metal stock is Graphite India, which has already seen a price/time correction and currently witnessing buying demand from the major support area of Rs. 430-460, thus offers fresh entry opportunity with a favourable risk reward set up
• Key point to highlight is that the stock has already taken nine months to retrace just 61.8% of the preceding seven month's up move (Rs. 173-815) and is currently seen rebounding from the long term 200 weeks EMA (currently at Rs. 440). A shallow retracement and a rebound from the long term average signals strength and positive price structure

Fundamental View

• Graphite India (GIL) is the largest Indian producer of graphite electrodes and one of the largest globally, by total capacity. Its manufacturing capacity of 98000 tonnes per annum is spread over 3 plants at Durgapur and Nashik in India and Nuremberg in Germany
• Graphite India's standalone capacity utilisation levels have increased from 93% in Q2FY22 to 99% in Q3FY22, while consolidated capacity utilisation level has increased from 81% in Q2FY22 to 90% in Q3FY22, reflecting sequentially healthy improvement in demand. Going forward for the standalone operations we have modelled capacity utilisation of 91% for FY22E and 93% for FY23E, while for the consolidated operations we have modelled capacity utilisation of 80% for FY22E and 85% for FY23E
• As on December 2021 for the consolidated entity GIL has net cash and cash equivalents of Rs. 2452 crore, while for the standalone entity GIL has net cash & cash equivalents of Rs. 2219 crore

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Link to the report

Shares of Graphite India Limited was last trading in BSE at Rs. 504.10 as compared to the previous close of Rs. 494.55. The total number of shares traded during the day was 107380 in over 3139 trades.

The stock hit an intraday high of Rs. 513.90 and intraday low of 491.40. The net turnover during the day was Rs. 54374943.00.

Source : Equity Bulls

Keywords

GraphiteIndia INE371A01025 GladiatorStocks ICICIDirect