Graphite India Limited , a leading manufacturer of graphite electrodes, is grappling with intensifying price competition in the graphite electrode market while simultaneously dealing with elevated raw material costs, according to a recent statement from the company's Co-Chair.

Market Pressures

The graphite electrode industry, crucial for electric arc furnace (EAF) steel production, is experiencing significant market pressures. Graphite India, one of the largest producers globally with a manufacturing capacity of 98,000 tonnes per annum, is feeling the impact of these challenging market conditions.

Financial Performance

Despite the challenging environment, Graphite India has shown resilience in its financial performance for the quarter ended September 30:

The company's net sales grew by 13.4% year-on-year, primarily driven by higher volumes at stable realizations. However, the impact of market pressures is evident in the significant decline in EBITDA and net profit.

Operational Highlights

• Capacity utilization increased to 99% in Q2 FY2026, up from 84% in Q2 FY2025.
• The company maintains a strong balance sheet with a net cash position of ₹3,921.00 crore as of September 30.

Industry Outlook

The graphite electrode industry faces both challenges and opportunities:

• Global crude steel production declined by 1.0% year-on-year to 437.1 million MT for the quarter ended September.
• Steel production in India showed robust growth, increasing by 14.9%, supported by ongoing infrastructure investments and manufacturing activity.
• The focus on decarbonization in developing economies is expected to support the growth of the Electric Arc Furnace (EAF) process, potentially driving future demand for graphite electrodes.

Management Commentary

K K Bangur, Chairman of Graphite India, stated, "Prices of graphite electrodes continued to face competitive headwinds while raw material costs, particularly petroleum needle coke, have not declined in tandem and consequently led to an impact on operating margins."

He added, "Graphite India is encouraged by the long-term dynamics of the graphite electrode industry, particularly with the global move towards decarbonization and the resulting adoption of the electric arc furnace process."

Conclusion

While Graphite India faces near-term challenges due to price competition and high raw material costs, the company remains optimistic about long-term industry dynamics. The management's focus on cost competitiveness and operational efficiencies, coupled with a strong financial position, may help the company navigate the current market pressures.

Investors and industry observers will be watching closely to see how Graphite India adapts to these market conditions and capitalizes on potential opportunities in the evolving steel production landscape.

Graphite , a leading manufacturer of graphite electrodes, has reported a significant decline in its consolidated net profit for the second quarter, along with a decrease in revenue. The company's financial performance reflects the challenges faced by the graphite electrode industry, including pricing pressures and market volatility.

Financial Highlights

For the quarter ended September 30, Graphite India reported the following consolidated results:

The company's revenue from operations saw a year-on-year decrease of 17.00%, falling from ₹875.00 crore in Q2 FY2024-25 to ₹729.00 crore in Q2 FY2025-26. This decline in revenue was accompanied by a sharp drop in profitability, with net profit falling by 84.00% from ₹481.00 crore to ₹76.00 crore over the same period.

Half-Year Performance

For the half-year period, Graphite India reported:

• Net profit: ₹206.00 crore (55.00% decrease from ₹463.00 crore in the previous year)
• Revenue: ₹1,394.00 crore (5.00% decline)

Challenges and Market Conditions

The company's financial results reflect the ongoing challenges in the graphite electrode industry. Graphite India has had to adjust its inventory valuation due to falling electrode prices. The value of inventory write-down as of September 30 stood at ₹78.00 crore, indicating continued pressure on prices.

Earnings Per Share

Basic earnings per share for the quarter stood at ₹3.91, compared to ₹24.69 in the previous year, reflecting the significant decrease in profitability.

Corporate Governance

The Board of Directors approved these results at their meeting held on November 10.

Outlook

The graphite electrode industry continues to face headwinds, with global steel production trends and electrode pricing dynamics playing crucial roles in shaping the sector's prospects. Graphite India's ability to manage costs, optimize production, and capitalize on any upturn in the steel industry will be key factors to watch in the coming quarters.

Investors and analysts may look for further guidance from the company's management on strategies to improve profitability and navigate the current market challenges. The company's focus on maintaining a strong balance sheet and its efforts to adapt to market conditions will be critical in positioning itself for future growth opportunities.