GRAPHITE INDIA LTD
INVESTOR PRESENTATION
Q2 FY 19 RESULTS
ANNUAL REPORT 2017-18
|
Graphite india
|
Sep '18
|
Jun '18
|
Mar '18
|
Dec '17
|
Sep '17
|
YOY
|
QOQ
|
|
|
2,345
|
1,965
|
1,323
|
1,025
|
528
|
344.13
|
19.34
|
|
|
Consumption of Raw Materials
|
504
|
380
|
271
|
189.54
|
166
|
203.61
|
32.63
|
|
|
P/L Before Tax
|
1,668
|
1,451
|
741
|
538
|
149
|
1019.5
|
14.96
|
|
|
Tax
|
555
|
494
|
201
|
178.99
|
46
|
1106.5
|
12.35
|
|
|
Net Profit
|
1,113
|
957
|
540
|
359
|
103
|
980.58
|
16.3
|
|
|
Equity
|
39
|
39
|
39
|
39
|
39
|
0
|
0
|
|
|
Basic EPS
|
56.87
|
49.08
|
27.69
|
--
|
5.25
|
983.24
|
15.87
|
|
|
MP
|
995
|
|||||||
|
PE RATIO
|
4.37
|
|||||||
|
VOLUME
|
550000
|
|||||||
|
52W L H
|
531
|
1126
|
||||||
|
FV
|
2
|
|||||||
|
09.11.18
|
1 week
|
2 week
|
1 month
|
3 month
|
6 month
|
9 month
|
1 year
|
|
|
Price
|
976.5
|
942.6
|
789.75
|
1094.7
|
775.75
|
713.4
|
597.05
|
|
|
Gain / Loss
|
1.87%
|
5.54%
|
25.9%
|
-9.13%
|
28.2%
|
39.4%
|
66.6%
|
GRAPHITE
INDIA-ANNUAL : 2017-18
Revenue
from operations increased by 114% to Rs. 2,983 cr for FY 2017-18 as against Rs.
1,392 cr in the previous year. The increase was primarily driven by higher Sales
Price realization and sales volume
The
continued, consistent slide in the selling prices witnessed during last few
years reversed midway during the current year with better balancing of
demand-supply imbalance.
The
global demand for graphite electrodes was strong due to –
(1)
demand revival in some of the steel producing nations with higher EAF
capacities;
(2)
consolidation in electrode industry which saw approximately 2,00,000 tons of
capacity being shut down and
(3)
Closure Of Significant Steel Capacities in highly polluting induction furnaces
and blast furnaces in China and replaced by environment friendly electric arc
furnaces.
(4)China
also closed down some of its electrode manufacturing capacities.
Graphite
and Carbon Segment accounts for about 95% of the total revenue.
OVERSEAS
SUBSIDIARIES
The
performance of German subsidiaries has
turned around and shown sharp improvement during the year with recovery in
electrode demand as well as prices during the year.
MANAGEMENT
DISCUSSION AND ANALYSIS
Graphite
Electrode is used in electric arc furnace based steel mills for conducting
current that melts scrap iron and steel and is a consumable item for the steel
industry. The principal manufacturers are based in USA, Europe, India, China, Malaysia
and Japan.
The two
basic methods for steel production are - (1) Blast Furnace (BF); and (2)
Electric Arc Furnace (EAF).
Calcined Petroleum Coke and Paste
The Coke
Division in Barauni, Bihar, is engaged in manufacturing Calcined Petroleum Coke (CPC),
Carbon Paste and Electrically Calcined Anthracite Paste. It is one of the
several backward integration initiatives of the Company.
CPC is
primarily used in manufacture of anodes for use in aluminium smelters,
manufacture of graphite electrodes and also used as carburiser in steel. The
division also manufactures four grades of Paste .
This
division’s performance was better due to higher
Realization.
Supply constraints in raw material i.e. Green / Raw Petroleum Coke was the
major hurdle faced during the year.
The impervous graphite equipment Division
is engaged in design, manufacture and supply of Impervious Graphite heat and
mass transfer equipment and turnkey systems.
Impervious graphite
is an ideal
material of construction
in industries like
Chloro-Alkali, Chlorinated Organic
Metal Processing, Polymers
like VCM, Polycarbonate
and Caprolactum, Drug
Intermediates, etc.
Power constitutes
one of the
major costs of
Electrode production. For
captive consumption, the
Company has an installed capacity
of 18 MW of power
generation through Hydel route.
Opportunities and threats
India was
the third largest
steel producer in
2017. India’s steel exports grew
102% YOY to 8.24 milliion tons in 2016-2017, while steel imports declined 37%
year-on-year to 7.4 million tons. l
India is
expected to become the second largest
steel producer in the world
by 2018, based
on increased capacity addition in anticipation of upcoming demand. Moreover
Government of India’s focus on infrastructure and
restarting road projects
is further boosting
demand for steel.
Also, further likely acceleration
in rural economy and
infrastructure is expected to increase the demand for steel.
Outlook
World crude
steel production reached
1,691.2 million tons for
the year 2017,
up by 5.3%
compared to 2016.
The year 2018 and 2019 is expected to see a continuation of cyclical
upturn in steel demand with a continuing. The graphite electrode
industry has historically
followed the
growth of
EAF steel industry and, to a lesser extent, the steel industry
as a whole,
which has been
highly cyclical .
Risks and
Concerns
cyclical nature of the steel
demand / production through
EAF route as also to the risks
arising from the
volatility in the
cost of input materials.
General economic
conditions.
Excess
production capacity may result in manufacturers producing and exporting
electrodes at prices
that are lower
than prevailing domestic prices,
and sometimes at or below their cost of production.
Petroleum needle coke is the primary raw material used
in the production of
graphite electrodes. Supply
of petroleum needle coke has been limited starting in the second half of 2017 as the demand has outpaced supply due to
increasing demand for production
of lithium-ion batteries
used in electric vehicles. Similarly the availability
and price of other materials may impact the operations and/or margins of the
Company.
Disproportionate increase in
taxes and other levies imposed periodically by the Central and State Governments
