Graphite India

Graphite India is the largest Indian producer of graphite electrodes and one of the largest globally, by total capacity – its manufacturing capacity is 98,000 tpa. The company’s performance for Q1FY16 is already showing signs of stress due to concerns of surging steel exports from China and subdued economic activity. And with the yuan now getting devalued, things could only get worse for this company. The lower demand for graphite electrodes, leading to lower capacity utilizations have affected the bottomline. It posted a 13% (YoY) drop in net sales at Rs.322 crore. Operating profit fell 27% at Rs.38 crore. Net profit for the quarter was at Rs.16 crore, down 41% with NPM dropping from 7.4% to 5.1%.

Electrode production volumes decreased by 2% (YoY) and other income was down due to lower income from investments. The only redeeming factor was that interest cost fell from Rs.4 crore to Rs.2 crore, owing to debt reduction with better working capital management and cash accruals. Total debt currently stands at Rs.234 crore v/s Rs.311 crore (YoY).