Graphite India Ltd
(BSE Code: 509488) (CMP: Rs.932.45) (FV: Rs.2) By Hema Holihosur
Graphite India Ltd (GIL), which was incorporated in 1967 in collaboration with erstwhile Great Lakes Carbon Corporation (GLCC) of USA, manufactures graphite electrodes as well as carbon and graphite speciality products. K. K. Banger, Chairman of the company, said that crude steel production continued to maintain steady growth. For FY18, GIL reported an EPS of Rs.53 v/s Rs.4 in FY17. In Q2FY19, its consolidated PAT skyrocketed 980% to Rs.1113 crore from Rs.103 crore in Q2FY18. Operating Profit (EBITDA) zoomed to Rs.1409 crore from Rs.150 crore in Q2FY18 and the management recommended an interim dividend of Rs.20/share for FY19. Based on its robust performance, an EPS of Rs.101.5 can be anticipated for FY20. Its cash flows have also grown at 170% CAGR over the last 3 years.
Technical Outlook: The stock trades above its 50-day moving average, which signals a ‘buy’ on the weekly chart. Therefore, we recommend this stock for a price target of Rs.1250 with a stop loss of Rs.763.