GRAPHITE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.7

📊 Core Financials Breakdown

Profitability

ROE: 8.26% and ROCE: 10.3% — moderate returns, below industry leaders but stable.

EPS: ₹20.1 — decent earnings base, though quarterly profit declined 29.3%, indicating margin pressure.

PAT Qtr: ₹145 Cr vs ₹62 Cr — sequential improvement, but YoY trend remains volatile.

Balance Sheet & Leverage

Debt-to-Equity: 0.02 — virtually debt-free, a major strength in a cyclical industry.

Book Value: ₹286 — implies a P/B ratio of ~1.98, attractive for value investors.

Dividend Yield: 1.95% — healthy payout, adds long-term holding appeal.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 28.2 Below industry average (43.0) — fair valuation

PEG Ratio -3.67 Negative PEG suggests unreliable or declining growth

Intrinsic Value ~₹520–₹540 CMP slightly above fair value zone

Valuation is reasonable, though PEG ratio flags caution due to earnings volatility.

⚙️ Business Model & Competitive Edge

Sector: Industrial materials — graphite electrodes for steel manufacturing.

Strengths

One of India’s largest graphite electrode producers with global exports.

Benefiting from anti-dumping duties on Chinese imports in Japan

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Strong operating leverage and cost control in recent quarters.

Challenges

FII and DII holdings declined — signaling cautious institutional sentiment.

Highly cyclical demand tied to global steel production.

PEG ratio and profit contraction suggest growth headwinds.

📉 Technicals & Entry Zone

Current Price: ₹566

DMA 50: ₹536 | DMA 200: ₹524 — bullish trend intact

RSI: 67.8 — nearing overbought zone

MACD: Positive — momentum strong

📌 Suggested Entry Zone: ₹520–₹540

A dip near the 200 DMA would offer a better margin of safety for accumulation.

🧭 Long-Term Holding Guidance

Hold if invested: Strong balance sheet, dividend yield, and global positioning make Graphite India a viable long-term play.

Accumulate on dips: Ideal for investors seeking exposure to industrial materials with cyclical upside.

You can explore Graphite India’s financials and peer comparison or review its stock overview and analyst sentiment for deeper insights. Let me know if you'd like a comparison with HEG or De Nora India.

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