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I n l i n e p e r f o r m a n c e …
Graphite India’s (GIL’s) numbers for Q1FY12 were generally in line with
our estimates. Net sales came at | 318.5 crore, higher by 23.3% YoY and
5.1% QoQ (Our estimate: | 308.3 crore). During the period under review,
the electrodes sales volume increased by 33% YoY, primarily driven by
healthy demand from the domestic market. Sales volumes in India grew
by 55% while export sales volumes grew by 19%. The EBITDA at | 61.4
crore was higher by 4.6% QoQ and 3.5% YoY (Our estimate: | 59.5
crore). Interest expenses increased sharply by 407.7% YoY to | 2.6 crore,
due to increase in working capital requirements and rising interest rates.
The subsequent PAT at | 36.9 crore was higher by 7.2% YoY but lower by
17.2% QoQ (Our estimate: | 38.9 crore).
ƒ Capacity utilisation levels higher YoY
On a YoY basis, due to the improved demand scenario there was a
sharp increase seen in capacity utilisation levels. The capacity
utilisation level increased from 59% in Q1FY11 to 79% in Q1FY12.
During the quarter under review, electrodes production and sales
volume increased by 34% and 33%, respectively.
V a l u a t i o n
At the CMP of | 88, the stock is discounting its FY13E EPS by 7.1x and
FY13E EV/EBITDA by 5.2x. We expect the company to operate at ~70%
utilisation at its expanded capacity of 98,000 tonnes in FY13E. Going
forward, with higher production through the EAF route of steel making,
we expect the company’s sales to grow at a CAGR of ~14.4% whereas
EBITDA and PAT are expected to grow at a CAGR of ~14.5% and ~13.0%
through FY11 to FY13E. We have valued the stock at a 20% discount to
the global average EV/EBITDA of 6.8x subsequently arriving at 5.5x FY13E
EV/EBITDA. We have assigned a HOLD rating to the stock with a target
price of | 93.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
I n l i n e p e r f o r m a n c e …
Graphite India’s (GIL’s) numbers for Q1FY12 were generally in line with
our estimates. Net sales came at | 318.5 crore, higher by 23.3% YoY and
5.1% QoQ (Our estimate: | 308.3 crore). During the period under review,
the electrodes sales volume increased by 33% YoY, primarily driven by
healthy demand from the domestic market. Sales volumes in India grew
by 55% while export sales volumes grew by 19%. The EBITDA at | 61.4
crore was higher by 4.6% QoQ and 3.5% YoY (Our estimate: | 59.5
crore). Interest expenses increased sharply by 407.7% YoY to | 2.6 crore,
due to increase in working capital requirements and rising interest rates.
The subsequent PAT at | 36.9 crore was higher by 7.2% YoY but lower by
17.2% QoQ (Our estimate: | 38.9 crore).
ƒ Capacity utilisation levels higher YoY
On a YoY basis, due to the improved demand scenario there was a
sharp increase seen in capacity utilisation levels. The capacity
utilisation level increased from 59% in Q1FY11 to 79% in Q1FY12.
During the quarter under review, electrodes production and sales
volume increased by 34% and 33%, respectively.
V a l u a t i o n
At the CMP of | 88, the stock is discounting its FY13E EPS by 7.1x and
FY13E EV/EBITDA by 5.2x. We expect the company to operate at ~70%
utilisation at its expanded capacity of 98,000 tonnes in FY13E. Going
forward, with higher production through the EAF route of steel making,
we expect the company’s sales to grow at a CAGR of ~14.4% whereas
EBITDA and PAT are expected to grow at a CAGR of ~14.5% and ~13.0%
through FY11 to FY13E. We have valued the stock at a 20% discount to
the global average EV/EBITDA of 6.8x subsequently arriving at 5.5x FY13E
EV/EBITDA. We have assigned a HOLD rating to the stock with a target
price of | 93.
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