Graphite India gets Centrum’s buy

Graphite India’s (GIL) earnings is at an inflection point with improved industry demandsupply outlook led by closures, consolidation and reduced Chinese exports of both steel and electrodes. After several years of stagnation, Electric Arc Furnace (EAF) steel production is expected to grow at a CAGR of 4.6 per cent during CY16-18 and drive incremental annual electrode demand of 60kt by CY18. With recent commissioning of key technology upgradation projects providing an improved and flexible production base coupled with sharp improvement in gross profit per tonne, GIL is set to take a big leap in EBITDA per tonne over FY17-19. GIL has nearly completed its capex of `200 crore, undertaken over the last few years for technology upgradation and modernisation of its production facilities in Durgapur and Nasik which has increased its capability of achieving full capacity utilisation with a better product basket.

Broking firm: Centrum Rating: Buy Closing price: `152.65