Graphite India Announces 25,000 TPA Expansion Plan Amid Q1 Performance
Graphite India Limited plans to expand its Graphite Electrodes Division capacity by 25,000 TPA, increasing total capacity from 80,000 TPA to 105,000 TPA. The Rs. 600 crore expansion will be implemented in two phases over 36 months. Q1 financial results show a decline in revenue and profit, with consolidated revenue at Rs. 665 crore, down 8.65% YoY, and profit at Rs. 133 crore, down 43.64% YoY. The company attributed the decrease to falling electrode prices and recognized inventory on a Net Realizable Value basis.
*this image is generated using AI for illustrative purposes only.
Graphite India Limited , a leading manufacturer of graphite electrodes, has unveiled plans for a significant capacity expansion while reporting financial results for the first quarter.
Expansion Plans
The company's Board of Directors has approved an ambitious expansion plan for its Graphite Electrodes Division. The highlights of the expansion include:
- A proposed capacity addition of 25,000 tonnes per annum (TPA)
- The expansion will be implemented in two phases:
- Phase 1: 13,000 TPA to be added within 12 months
- Phase 2: 12,000 TPA to be completed within 36 months
- An investment of approximately Rs. 600 crore, including Rs. 100 crore for captive power through renewable energy sources
- The expansion will be financed through a combination of internal resources and debt
This strategic move will increase Graphite India's total capacity from the current 80,000 TPA to 105,000 TPA, representing a significant 31.25% boost in production capability. The company cited anticipated growth in graphite electrode demand as the primary rationale for this expansion.
Q1 Financial Highlights
Graphite India also reported its financial results for the quarter ended June 30:
| Particulars (Consolidated) | Q1 (Rs. Crore) | Q1 Previous Year (Rs. Crore) | YoY Change |
|---|---|---|---|
| Revenue from Operations | 665.00 | 728.00 | -8.65% |
| Other Income | 150.00 | 194.00 | -22.68% |
| Total Income | 815.00 | 922.00 | -11.61% |
| Profit before Tax | 167.00 | 284.00 | -41.20% |
| Profit for the Period | 133.00 | 236.00 | -43.64% |
| EPS (Basic & Diluted) (Rs.) | 6.87 | 12.11 | -43.27% |
Despite a year-on-year decline in revenue and profit, the company's performance shows resilience in a challenging market environment. The decrease in revenue can be attributed to the overall fall in electrode prices, as noted in the company's statement.
Segment Performance
The Graphite and Carbon segment, which is the company's primary business, reported revenue of Rs. 595 crore for Q1, compared to Rs. 624 crore in the same quarter last year. The Steel segment contributed Rs. 51 crore to the revenue, remaining stable compared to the previous year.
Inventory Valuation
Due to the overall fall in electrode prices, Graphite India has recognized inventory on a Net Realizable Value (NRV) basis, resulting in a write-down of inventory carrying cost. The value of this write-down stood at Rs. 77 crore as of June 30, compared to Rs. 208 crore a year ago, indicating an improvement in market conditions.
Management Commentary
While the company did not provide specific management quotes in the LODR data, the expansion plan clearly indicates the management's confidence in the future growth of the graphite electrode market. The investment in renewable energy sources for captive power also aligns with global sustainability trends.
As Graphite India moves forward with its expansion plans, investors and industry observers will be keenly watching how this increased capacity translates into market share and financial performance in the coming years. The company's ability to navigate the current pricing challenges while positioning itself for future growth will be crucial in determining its long-term success in the graphite electrode market.
Historical Stock Returns for Graphite
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.91% | -4.91% | -7.19% | +30.49% | -2.14% | +169.48% |
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