Synopsis:
Graphite India Limited acquired a 6.82 percent stake in US-based GrafTech International for Rs. 168.13 crore, a leading vertically integrated manufacturer of high-quality graphite electrodes.
During Friday’s trading session, shares of the largest supplier of graphite electrodes in the domestic market and one of the leading players in a highly consolidated industry surged nearly 2 percent on BSE, after the company announced investing nearly Rs. 168 crores in a US-based graphite electrode manufacturer.
At 02:40 p.m., the shares of Graphite India Limited were trading in the green at Rs. 572.35 on BSE, up by around 1.2 percent, as against its previous closing price of Rs. 565.85, with a market cap of Rs. 11,182 crores. The stock has delivered positive returns of nearly 1 percent YTD, and has gained by over 24 percent in the last six months.
What’s the News
According to the latest exchange filings, Graphite India Limited has invested in the shares of GrafTech International Ltd., an NYSE-listed company, via an acquisition of a 6.82 percent stake worth a total of Rs. 168.13 crores. The company has also filed the required information with the US Securities and Exchange Commission under the Securities Exchange Act of 1934.
Graffech International Limited is a leading manufacturer of high-quality graphite electrode products, critical for producing electric arc furnace steel and other ferrous and non-ferrous metals. It has a competitive portfolio of low-cost, ultra-high power graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. Additionally, GrafTech is substantially vertically integrated into petroleum needle coke, a key raw material for graphite electrode manufacturing.
Financials & more
Graphite India reported a decline in its revenue from operations, showing a year-on-year decrease of around 9 percent from Rs. 728 crores in Q1 FY25 to Rs. 665 crores in Q1 FY26. Likewise, its net profit decreased during the same period from Rs. 236 crores to Rs. 133 crores, representing a decrease of around 44 percent YoY.
In terms of financial ratios, Graphite India has reported a RoE of 8 percent and ROCE of 10 percent, with a debt-to-equity ratio of 0.03. Further, the stock is currently trading at a P/E of 31.2, compared to the industry average of 42.7.
Considering the expected rise in graphite electrode demand, evolving global industry dynamics, and current capacity utilisation, the company has initiated a 25,000 TPA capacity expansion with an investment of Rs. 600 crore, including Rs. 100 crore for renewable captive power. The expansion will be executed in two phases: 13,000 TPA within 12 months and 12,000 TPA within 36 months.
Graphite India Limited operated across three reportable segments: Graphite & Carbon, Steel, and Others. The Graphite & Carbon Segment produces graphite electrodes, miscellaneous graphite and carbon products, and provides related processing/service charges.
The steel segment is engaged in the manufacturing of high-speed steel and alloy steel, while the Others segment focuses on GRP pipes manufacturing/installation and power generation for external sale.
The company also manufactures Calcined Petroleum Coke (CPC) for use in electrode manufacturing and is expanding its presence in value-added graphite products for the auto, aerospace, chemical, pharmaceutical, metallurgical and machine tool industries. Its total manufacturing capacity of 98,000 tonnes per annum spans three plants at Durgapur and Nashik (India) and Nurnberg (Germany).
Written by Shivani Singh
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