Q1 earnings: Graphite India shares plunge 8% as EBITDA, net profit fall

Shares of Graphite India Ltd. fell by 8% on Friday on financial results for the April to June quarter. The results indicated a significant decline in key financial metrics, with net profit decreasing by 43.6% to ₹133 crore compared to ₹236 crore in the same period last year. The company's EBITDA also experienced a drop of 61.2%, down to ₹43 crore from ₹113 crore in the previous year, while the EBITDA margin contracted to 6.5% from 15.5% a year earlier.

The company currently operates with a production capacity of 80,000 tonnes per annum (TPA) in India, maintaining a capacity utilisation rate of 80% to 85%. Graphite India has announced a strategic plan to expand this capacity by an additional 25,000 TPA, which will be implemented over two phases. Phase 1 will see the addition of 13,000 TPA within the next 12 months, and Phase 2 will add another 12,000 TPA over the subsequent 36 months.

The total investment for this expansion is estimated at ₹600 crore, part of which includes ₹100 crore allocated for captive power generation through renewable energy sources. This investment underscores the company's commitment to sustainable growth.

This development comes as the company's revenue also declined by 8.7%, reaching ₹665 crore from ₹728 crore in the year-ago period. These financial figures have had a direct impact on the company's stock performance.

The stock ended 7.93% lower at Rs 527.40 on BSE today. The proposed expansion could potentially bolster future growth and improve profitability, provided the increased capacity aligns with market demand. Investors and stakeholders are now closely watching these developments and their implications on the company's market position, anticipating how they might influence future earnings.