Graphite In­dia Ltd

(BSE Code: 509488) (CMP: Rs.932.45) (FV: Rs.2) By Hema Holi­ho­sur

Money Times - - Stock Pick -

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.

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