Graphite India Q2 profit zooms over 10 times to Rs 912 crore

By Anuradha Himatsingka

Kolkata: Graphite IndiaNSE 1.39 % reported a 913 % jump in its standalone net profit at Rs 912 crore for the second-quarter (Q2) ended September 30, 2018, compared to Rs 90 crore profit posted in the corresponding period previous fiscal. The growth in net profit follows a 335 % rise in gross sales at Rs 2008 crore in the said period as against Rs 462 crore earned in the corresponding previous quarter. 

Company officials attributed the improved performance to higher capacity utilization levels of 93% and improved price realizations. However, this quarter margins were partly impacted due to higher cost of needle coke, the company release stated. 

Operating profit (EBITDA) in the quarter under review stood at Rs 1409 crore, up 839% from Rs 150 crore in the corresponding previous period. Capacity utilization in Q2 FY2019 was 102% compared to 89% in Q2 FY2018. 

The company's board of directors has recommended an interim dividend Rs 20 per equity share for the financial year 2018-19, the release pointed out. 

Commenting on the industry's future outlook, Graphite India chairman K. K. Bangur said, world crude steel production continued to maintain its momentum of steady growth. Additionally, "the Chinese steel industry is shifting steadily from the polluting blast furnace route to cleaner electric arc furnace technology, resulting in an increased electrode demand. At the global level, shift towards EAF production is clearly evident with an increase in its market share from 25% in 2015 to 28% in 2017," he said. 

Bangur further added: "In our home market too, India registered a growth of 4.6% in Q3 CY2018 with steel demand expected to be driven by higher capacity utilization and large scale infrastructure investment programs. Consequently, market buoyancy is expected to continue." 
Company officials are, therefore, optimistic about the prospects of the graphite electrodes industry.