Buy Graphite India, target price Rs 475: Jefferies

Jefferies has buy call on Graphite India with a target price of Rs 475. The current market price of Graphite India is Rs 390.95.

Graphite India, incorporated in the year 1974, is a Mid Cap company (having a market cap of Rs 7647.98 Crore) operating in Industrial Consumables sector.

Graphite India key Products/Revenue Segments include Graphite Electrodes Anodes & Miscl., Graphite Equipments, Calcined Petroleum Coke, High Speed Steel, Electricity, Others, Export Incentives, Carbon Paste, Alloy Steel, GRP Pipes, Tanks & Soils, Royalty Income, Sale of services for the year ending 31-Mar-2022.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 936.00 Crore, up 4.35 % from last quarter Total Income of Rs 897.00 Crore and up 21.40 % from last year same quarter Total Income of Rs 771.00 Crore. Company has reported net profit after tax of Rs 92.00 Crore in latest quarter.

The company’s top management includes Mr.K K Bangur, Mr.Ashutosh Dixit, Mr.P K Khaitan, Mr.N S Damani, Mr.N Venkataramani, Mr.Gaurav Swarup, Mrs.Sudha Krishnan, Mr.A V Lodha. Company has S R Batliboi & Co. LLP as its auditors. As on 30-09-2022, the company has a total of 20 Crore shares outstanding.

Investment Rationale
The brokerage expects the company's EBITDA margin to revive from 12% in FY23e to ~24% by FY25. But, historically over FY20-22, the company's PAT has revived swifter from a low base, posting growth of 11x vs 7x PAT growth in HEG.

Promoter/FII Holdings
Promoters held 65.34 per cent stake in the company as of 30-Sep-2022, while FIIs owned 5.32 per cent, DIIs 8.69 per cent.