Graphite India investors have suffered substantial losses in over 1.5 years. Graphite India share price, which closed at Rs 1,100 on August 14, 2018 ended at Rs 181 on May 21, 2020. An investment of Rs 1 lakh in Graphite India stock on August 14, 2018, would have decreased to Rs 16,400 today. The mid cap stock has lost 49.24% during the last one year and fallen 40.38% since the beginning of this year. During last one week, Graphite India share price is down 2.17%.
The stock hit a 52-week high of Rs 458.70 on May 29, 2019 and touched a 52 week low of Rs 103 on March 25, 2020. The stock hit its yearly low two sessions after the worst fall for Indian benchmark indices ever.
Sensex plunged 3,934.72 points or 13. 15 per cent to 25,981.24 on March 23 this year after several Indian states announced lockdown following a spurt in the number of coronavirus cases. Nifty too lost 1,135.20 points or 12.98 per cent to settle at 7,610.25.
Apart from the negative sentiment affecting Indian markets, the stock has been hit by other factors.
The ongoing economic slowdown has adversely impacted the demand for graphite electrodes, a primary product of the company. Graphite electrodes are used to melt scrap in electric arc furnaces to produce new steel. Global slowdown due to the US-China trade war has led to a fall in steel demand which has affected demand for electrodes.
China is the biggest producer of graphite electrodes which are used in automobile and steel industries. China which saw a flurry of coronavirus cases in December has not been able to control the situation. The country in which the virus originated is facing second wave of infections, according to reports.
The rise in coronavirus cases since December has hampered industrial activity in the country which is largest producer of graphite electrodes in the world. In September 2018, India removed antidumping duties on graphite electrodes imported from China which led to an increase in their imports.
Steel prices also continue to remain under pressure and combination of these factors has resulted in significant correction in electrode prices. This has adversely affected financial performance of Graphite India since 2018.
For quarter ended June 2018, net profit rose 77.22% to Rs 957 crore compared to net profit of Rs 540 crore for quarter ended March 2018. On an year-on-year basis, net profit grew 3,090%. For quarter ended September 2018, the firm posted a net profit of Rs 1,113 crore.
For quarter ended December 2018, net profit fell to Rs 765 crore. Since then, net profit has been falling continuously on a quarter-on-quarter basis.
Net sales rose to Rs 1,965 crore for June 2018 quarter compared to Rs 1,323 crore in March quarter. For quarter ended June 2017, net sales stood at Rs 390 crore. In September 2018 quarter, net sales rose to Rs 2,345 crore. Since then, net sales have been falling continuously.
Sales fell to Rs 1,855 crore in December 2018 followed by Rs 1,693 crore sales for quarter ended March 2019. In the third quarter of last fiscal, net sales fell to Rs 643 crore, a decline of 65% year-on-year.
Graphite India is engaged in the manufacturing graphite electrodes, graphite equipments, steel, glass reinforced plastic (GRP) pipes and tanks and generation of hydel power. The company operates through three segments: Graphite and carbon, steel and others.