Margin misses estimates… • Graphite India :: ICICI Securities, pdf link

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Graphite India - Q3FY14 Result Update - Sharp fall in realization disappoints; maintain Hold :Centrum

Rating: Hold; Target Price: Rs93; CMP: Rs89; Upside: 4.6%



Margins dip due to weak realizations; maintain hold



We maintain Hold rating on Graphite India Ltd (GIL) with a target
price of Rs93 as operating environment remains challenging for the
company with subdued demand and weak pricing due to increased
competition among global electrode players. FY14 results disappointed
due to sharp drop in realizations and EBITDA was lower by 7.7% YoY on
a consolidated basis as overseas subsidiary recorded losses. We cut
our consolidated EBITDA estimates by 5.4%/6.1% for FY15E/16E on
account of lower realizations and higher costs. Reduction in debt led
by working capital release, strong balance sheet and good dividend
yield are key positives, but valuations at 6.1x FY15E EV/EBITDA leave
limited upside. Recommend a switch to Vesuvius India.

$ Utilizations pick up QoQ, but realizations dip sharply: Capacity
utilization for Q4 stood at 83% (up from 70% in Q3) but realizations
fell by ~9% QoQ due to severe competition among electrode producers
globally for greater market share. Global steel production growth
remains subdued (ex-China) despite improvements in Europe and
management commentary of various producers indicate further weakness
in realizations going ahead.

$ EBITDA margin drops sharply, working capital release reduces debt:
EBITDA was flat QoQ at Rs682mn (vs exp: Rs767mn) and margin dropped by
160bps QoQ to 14.3% (vs exp: 16.6%) due to sharp fall in electrode
realizations and higher other expenses. Cons EBITDA in FY14 was lower
by ~7.7% YoY led by subdued standalone performance and losses at the
European subsidiary. GIL reduced its gross debt on a consolidated
basis from ~Rs7.1bn to Rs4.3bn on the back of working capital release
(led mainly by inventory reduction of needle coke).

$ Earnings revised downwards due to lower realizations: Management has
guided for capacity utilization of ~70% in FY15 while realizations are
expected to remain muted due to high competition. We see pressure on
volumes and realizations due to weak demand and high competition and
reduce our consolidated EBITDA estimates by 5.4%/6.1% for FY15E/16E.
We build in capacity utilizations of 70%/72% for standalone operations
and 55%/60% for overseas subsidiary for FY15E/16E. We factor in lower
debt and reduced working capital requirements going ahead.

$ Valuations – maintain Hold: We like the strong balance sheet and
good dividend yield of the company, but see current valuation at 6.1x
FY15E EV/EBITDA offering limited upside potential, particularly in a
weak global demand environment. We maintain Hold with a revised target
price of Rs93 (based on 6x FY16E EV/EBITDA) as the stock lacks
positive triggers. Recommend a switch to Vesuvius India in steel
consumables space. Key upside risks are better volumes & higher
realizations while downside risks are further investments at the
overseas subsidiary to fund losses and lower realizations.



Thanks & Regards

Graphite India - Q3FY14 Result Update - Sharp fall in realization disappoints; maintain Hold : Centrum

Rating: Hold; Target Price: Rs77; CMP: Rs69.5; Upside: 10.8%



Sharp fall in realization disappoints; maintain Hold



We maintain Hold rating on Graphite India Ltd (GIL) with a target
price of Rs77 as operating environment remains challenging for the
company with increased competition among global electrode players
(despite oligopolistic nature of the industry). Q3 results
disappointed despite marginally better volumes due to sharp
realization fall (~4.5% QoQ) which led to EBITDA fall of ~16% QoQ. We
cut our consolidated EBITDA estimates by 4.7%/7.9% for FY14E/15E on
account of lower realizations and higher other expenses.  Reduction in
working capital debt, strong balance sheet and good dividend yield are
key positives but valuations at 5.6x FY15E EV/EBITDA leave limited
upside.

$ Realizations dip sharply, volumes remain muted: Capacity utilization
stood at 70% (up from 66% in Q2) thereby keeping electrode volumes
muted (marginally lower YoY). Realizations fell by ~4.5% QoQ due to
severe competition among producers and discounts offered by global
majors in order to capture greater market share. Global steel
production growth remained subdued (ex-China) and management indicated
that substantial demand improvements were required from the developed
world for ensuring pricing discipline by producers.

$ EBITDA margin drops sharply but inventory clearance picks up speed:
EBITDA fell by ~16% QoQ to Rs685mn (vs exp: Rs797mn) and margin
dropped by 310bps QoQ to 15.9% (vs exp: 17.9%) due to sharp fall in
electrode realizations and higher other expenses (increase in freight
charges and commissions for export sales). GIL has indicated that
working capital was being brought down through clearance of high
needle coke inventories and no new purchases of needle coke are being
undertaken. This has resulted in debt reduction of ~Rs0.9bn during the
quarter.

$ Earnings revised downwards due to lower realizations: High
competition among producers (despite oligopolistic nature of the
industry) is resulting in lower than expected realizations. Domestic
operations capacity utilization guidance remains muted at ~65% while
the overseas subsidiary is operating at sub 50% utilization. We see
pressure on volumes and realizations due to weak demand and high
competition and reduce our consolidated EBITDA estimates by 4.7%/7.9%
for FY14E/15E. We however, reduce our estimates of working capital
requirements and build faster debt reduction on account of strong cash
flow generation and no incremental capex.

$ Valuations - Upside remains capped: We like the strong balance sheet
and good dividend yield of the company but see current valuation at
5.6x FY15E EV/EBITDA offering limited upside potential, particularly
in a weak global demand environment. We shift our valuation base to
Dec'15E and continue to value the company at 5.5x EV/EBITDA to arrive
at a target price of Rs77. Maintain Hold. Key upside risks are better
volumes & higher realizations while downside risks are further
investments at the overseas subsidiary to fund losses and lower
realizations.



Thanks & Regards

--

Outlook-Bajaj Hindusthan, JB Chemicals, Graphite India, UFLEX, PC Jeweller, Parabolic Drugs :: Business Line :: Business Line

• 
• 
• 
• 
• 

Technicals-Bajaj Hindusthan, JB Chemicals, Graphite India, UFLEX, PC Jeweller, Parabolic Drugs :: Business Line

• 
• 
• 
• 
• 

Technicals: Dena bank, Graphite India, Financial Technologies, TVS Motor :: Business Line

Graphite India Ltd: Strong operations with niche capabilities :: Centrum

Strong operations with niche capabilities
We interacted with the management (Mr. S. Chaudhary, SVP,
Corporate) of Graphite India Ltd (GIL) to get recent updates on the
business and market for graphite electrodes globally. Key takeaways
are as follows:

Angel Broking - Graphite India - RU4QFY2012 - Result Updates ::PDF link

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��



Graphite India - RU4QFY2012

Graphite India (Rs 75.8): BUY :: Business Line

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

We recommend a buy in the stock of Graphite India from a short-term perspective. It is seen from the charts of the stock that after retracing to Fibonacci retracement level of 50 per cent of its prior up move, it found support around Rs 65 in December 2011. This level is also a significant long-term base level.

The stock, thereafter, started to move higher triggered by prolonged positive divergence in daily moving average convergence divergence indicator and weekly relative strength index. On Thursday, the stock emphatically broke through its medium-term downtrend-line by surging 6.7 per cent with good volume. This up move has also breached its 21- and 50-day moving averages decisively.

The daily RSI has entered into the bullish zone and weekly RSI has entered into the neutral region from the bearish zone. After signalling a buy, the daily MACD is on the brink of entering into the positive terrain. Both daily and weekly price rate of change indicators are featuring in the positive area indicating buying interest.

Our short-term outlook on the stock is bullish. We anticipate it to move higher and reach our price target of Rs 78.5 or Rs 81 in the approaching trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 73.5.

Buy Graphite India; Target :Rs 83 ::ICICI Securities

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


P e r f o r m s   w e l l …
Graphite India’s (GIL’s) quarterly performance for Q2FY12 was broadly
better than our expectations, primarily on the back of higher sales
volumes. The capacity utilisation during the quarter stood at a healthy
97% level (standalone entity). During the quarter under review, the
topline came at | 461.6 crore (higher by 42.5% YoY and 44.9% QoQ),
which was better than our expectation of | 337.9 crore. The EBITDA
margin declined 290 bps QoQ and 970 bps YoY to 16.4% (our estimate:
19.2%). The ensuing EBITDA during the period under review stood at |
75.6 crore (our estimate: 64.8%), higher by 23% QoQ but lower by 10.5%
YoY. The ensuing reported PAT during the period under review stood at |
41.9 crore (our estimate: | 38.1 crore), higher by 13.6% QoQ but lower by
14.9% YoY.
ƒ Capacity utilisation levels higher both YoY as well as QoQ
Due to the improved demand scenario, there was a sharp increase
in capacity utilisation levels. The capacity utilisation level increased
to 97% in Q2FY12 from 78% in Q2FY11 and from 79% in Q1FY12.
During the quarter under review, electrodes production and sales
volume increased by 24% and 40%, respectively.
V a l u a t i o n
At the CMP of | 72, the stock is discounting its FY13E EPS by 6.7x and
FY13E EV/EBITDA by 4.9x. We expect the company to operate at ~ 70%
utilisation at its consolidated expanded capacity of 98,000 tonnes in
FY13E. Furthermore, we expect demand to stay firm on the back of higher
production through the EAF route of steel making. We have valued the
stock at a 15% discount to the global average EV/EBITDA of 6.5x,
subsequently  arriving  at  5.5x  FY13E  EV/EBITDA.  We  have  assigned  a
BUY rating to the stock with a target price of | 83.

Buy Graphite India - 2QFY2012 Result Update ::Angel Broking

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


For 2QFY2012, Graphite India’s (GIL) top line came in at `462cr, an increase of
42.5% yoy. EBITDA margin contracted by 970bp yoy to 16.4%. EBITDA declined
by 10.5% yoy to `76cr. PAT declined by 32.4% to `42cr on the back of margin
compression. Going ahead, the scenario is positive for the company, as it has
started steel production again in June 2011 (post the shutdown) and is showing a
strong rising trend. We maintain our Buy recommendation on the stock.
Strong sales growth but margin decline: GIL reported strong sales growth in
2QFY2012. Revenue increased by 42.5% yoy and 44.9% qoq to `462cr. The
graphite and carbon segment posted a 45% yoy increase in revenue to `398cr.
Sequentially also, the increase was very strong, with sales increasing by 46.5% on
the back of strong volume growth. The steel division’s revenue increased by 203%
qoq to `28cr. The company’s OPM declined by 970bp yoy to 16.4% due to
increased raw-material cost and other expenses as a percentage of sales.
Consequently, PAT declined by 32.4% yoy but increased by 13.6% qoq on the
back of higher top line. PAT margin came in at 9.1%, down 250bp qoq and
1,005bp yoy, during the quarter.
Outlook and valuation: We remain positive on the prospects of GIL, owing to
strong demand from steel manufacturers. Realizations are also set to increase, as
global players have hiked their prices recently. Post 2QFY2012, we have tweaked
our numbers slightly, and we expect sales to post a 19.2% CAGR over
FY2011–13E and PAT to witness a 17.7% CAGR over the same period. At the
CMP, the stock is trading at attractive valuations of 0.8x its FY2013E BV,
respectively. We have valued the stock at its five-year median of 1.1x one-year
forward book value to arrive at a target price of `102. We maintain our Buy
recommendation on the stock.

Hold Graphite India; Target :Rs 93:: :: ICICI Securities,

Please Share:: 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.

KIFS Result update of Graphite India-Thermax-Maruti Suzuki-NTPC-Glenmark Pharma

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

KIFS Result update of:

GRAPHITE INDIA

OVERVIEW

Graphite India (GIL) is engaged in manufacturing of graphite electrodes. Besides graphite electrodes, the company also manufactures anodes, other miscellaneous carbon and graphite products and calcined petroleum coke. The capacity expansion by 20,000 MT of Graphite Electrodes at Durgapur Plant is progressing well and it is expected to be completed in the first quarter of the FY 2012-13. Power supply from Wardha Power Company (WPC), with whom the Company had entered into a long term agreement and had made a commitment to invest ` 9 crore in WPC, is expected to commence from the second quarter of FY 2011-12.

Key highlights:

· Total income  grew by 23% Y-o-Y to Rs. 319 cr. v/s Rs. 258 cr in June-10

· Operating Profit grew by 10% Y-o-Y to Rs. 68 cr.  v/s Rs. 62 cr in June-10

· OPM fell by 258 bps Y-o-Y to 20.4%  v/s 23% in June-10

· Net profit grew by 7% Y-o-Y to Rs. 37 cr.  v/s Rs. 34 cr in June-10

· NPM fell by 168 bps Y-o-Y to 11%  v/s  12.7% in June-10

· Interest cost grew 408% Y-o-Y to Rs 3 cr. v/s Rs 1 cr.

THERMAX

OVERVIEW

Thermax offers engineering solutions to various industries. It offers wide range of products and services in heating, cooling, waste heat recovery, captive power, water treatment, recycling and waste management. The company has three plants coming up in the next 18 months including supercritical boilers, chemicals and air pollution control equipments. The company has consolidated its strong position in the sub-15 MW power plants with a 40% market share. Commercial production from manufacturing and assembly shop for air pollution control equipment at Solapur is expected to begin in the last quarter of FY12.

Key highlights:

· Total income grew by 32% Y-o-Y to Rs.1044 cr. v/s Rs. 790 cr in June-10

· Operating Profit grew by 17% Y-o-Y to Rs.128 cr. v/s Rs.110 cr in June-10

· OPM fell by 162 bps Y-o-Y to 12.3%  v/s 13.92% in June-10

· Net profit grew by 21% Y-o-Y to Rs. 80 cr.  v/s Rs. 66 cr in June-10

· NPM fell by 73 bps Y-o-Y to 7.65%  v/s 8.38% in June-10

MARUTI SUZUKI

OVERVIEW

Maruti Suzuki (Maruti) is one of India’s premier Auto Companies. Maruti’s Gurgaon Facility is spread across 300 acres with a capacity of 7 lakh cars/annum, Manesar Facility which is spread across 500 acres has a capacity of 14 lakh cars/ annum. Maruti also has a Diesel Engine JV with SPIL with a capacity of 2 lakh units/annum. All in all, Maruti has a total capacity of 21 lakh cars/annum. Maruti has multiple offerings in  A1, A2, A3, B & C car segments. Maruti also exports cars to Europe, Africa & S. America. Demand outlook for FY12 remains uncertain due to headwinds on rising fuel prices and interest rates as 75% cars are purchased on finance.

Key highlights:

· Total income grew by 3% Y-o-Y to Rs.8529 cr. v/s Rs. 8309 cr in June-10

· Operating Profit grew by 11% Y-o-Y to Rs. 994 cr. v/s Rs. 893 cr in June-10

· OPM grew by 80 bps Y-o-Y to 10.46%  v/s 9.66% in June-10

· Net profit grew by 18% Y-o-Y to Rs. 549cr.  v/s Rs. 465 cr in June-10

· NPM grew by 74 bps Y-o-Y to 5.78%  v/s 5.04% in June-10

· Other Income increased sharply by 79%

NTPC

OVERVIEW

NTPC is a leading power generator in India with a regulated business model. NTPC’s capacity addition is expected to accelerate, as 14.7 GW of projects under construction are anticipated to be commissioned over the next few years. With commissioning of the 1st Unit of 660 MW of Sipat Super Thermal Power Project, the total capacity of NTPC group has become 34,854 MW. The total installed capacity of Sipat Super Thermal Power Project has become 1,660 MW. NTPC has recently signed an MOU with Government of Kerala with an objective to plan and develop around 200 MW Wind Energy based power projects.

Key highlights:

· Total income grew by 12% Y-o-Y to Rs.14524 cr. v/s Rs. 13006 cr in June-10

· Operating Profit grew by 15% Y-o-Y to Rs. 3826 cr. v/s Rs. 3331 cr in June-10

· OPM grew by 73 bps Y-o-Y to 26.34%  v/s 25.61% in June-10

· Net profit grew by 13% Y-o-Y to Rs. 2076 cr.  v/s Rs. 1842 cr in June-10

· NPM grew by 13 bps Y-o-Y to 14.29%  v/s 14.16% in June-10

GLENMARK PHARMA

OVERVIEW

Glenmark is a leading research based pharmaceutical company based in India. The company is a leading player in the discovery of new molecules both NCEs (new chemical entity) and NBEs (new biological entity) with eight molecules in various stages of clinical development. Glenmark Generics Ltd (GGL), a subsidiary of Glenmark Pharma, is engaged in marketing of APIs in US and other regulated markets. Currently the company has production facilities at Nasik, Goa, Baddi, Pune and Ankleshwar for manufacturing formulations and specialized bulk drugs.

Key highlights:

· Total income  grew by 27% Y-o-Y to Rs. 868 cr. v/s Rs. 685 cr in June-10

· Operating Profit grew by 28% Y-o-Y to Rs. 309 cr.  v/s Rs. 242 cr in June-10

· OPM grew by 22 bps Y-o-Y to 35.6%  v/s 35.38% in June-10

· Net profit grew by 23% Y-o-Y to Rs. 210 cr.  v/s Rs. 171 cr in June-10

· NPM fell by 71 bps Y-o-Y to 24.19%  v/s 24.9% in June-10

Thanks and Regards,

KIFS Research

Graphite India --1QFY2012 Result Review --::Angel Broking,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Graphite India
For 1QFY2012, Graphite India (GIL) posted top line of `319cr (`258cr), registering an
increase of 23.3% yoy, which was below our expectation, owing to the lockdown in their
Powmex Steel Division. OPM contracted by 371bp yoy to 19.3%. Despite contraction in
OPM, PAT increased by 7.2% yoy to `37cr (`34cr) because of higher sales. Going ahead
also, the scenario is positive, with the commencement of steel production again in June
(showing a strong pick-up). We continue to maintain our Buy recommendation on the
stock with a target price of `123. We may change our recommendation and target price
post interaction with the management.

Add Graphite India - Muted results for this quarter; Target :Rs91 ::ICICI Securities

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Graphite India - Muted results for this quarter…
Graphite India Ltd (GIL) reported muted numbers for Q3FY11. The
topline registered some improvement (up 4% YoY and 21% QoQ) led by
an increase in graphite electrode volumes (up ~7% QoQ and 34% YoY)
aided by improved capacity utilisation levels at ~84% despite moderate
electrode realisations. EBITDA margins saw a sharp erosion (down
~440 bps QoQ and ~1510 bps YoY) due to a spike in raw material cost
(up ~15% QoQ and 65% YoY) partially led by rising non-needle coke
input costs, fuel cost (up 15% QoQ and 106% YoY) and one-time rise in
employee costs. PAT also fell ~ 10% QoQ and 29% YoY partially due to
lower other income component (down ~73% QoQ) and high
operational costs (up ~50% YoY and ~10% QoQ). We expect a stable
performance, going ahead, based on improved volumes from the EAF
segment and stable electrode pricing regime. Also, we expect some
nominal decline in needle coke prices based on yearly contractual rates
for FY12E as guided by the management. We have revised our target
price to | 91/ share and assigned an ADD rating to the stock.

Buy Graphite India – 3QFY2011 Result; Target Rs.114; Angel Broking

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Graphite India – 3QFY2011 Result Update

Angel Broking maintains a Buy on Graphite India with a Target Price of Rs.114.

For 3QFY2011, Graphite India (GIL) posted top-line growth of 21.0% yoy to

`337cr (`279cr), which was below our estimates of `354cr. However, PAT

declined by 29.8% to `44cr (`63cr), mainly because of margin contraction. OPM

came in at 21.7% (36.8%), much below our expectations of 24.8%. The main

reasons for lower-than-expected OPM were a one-time dearness bonus, high

input costs and higher electricity consumption. Going ahead, we expect OPM to

improve from the current levels and the top line to post strong growth.

We maintain our Buy recommendation on the stock.

Graphite India -Impressive run rate to continue… ICICI Sec

Visit http://indiaer.blogspot.com/ for complete details �� ��


Impressive run rate to continue…
Graphite India Ltd (GIL) reported good set of numbers for Q2FY11.
Topline registered stellar growth (up 16% YoY and 25% QoQ) led by
increase in graphite electrode volumes (up 48% YoY and 34% QoQ).
This was backed by improved capacity utilisation levels at 78% and
stable electrode realisations. EBITDA margins also saw decent gains (up
~42% QoQ) but remained muted YoY (down ~23%). Increase in raw
material cost (up ~25% QoQ and 37% YoY), fuel cost (up 26% QoQ and
45% YoY) and one-time charge for the Bangalore plant restructuring led
to decline in margins. PAT grew ~ 43% QoQ primarily due to reduced
interest outgo on account of repayment of loans and conversion of
FCCBs. We expect good run to continue based on improved volumes
from EAF segment and stable electrode pricing regime. Also, we do not
expect any significant jump in needle coke prices based on yearly
contractual rates. We have revised our target price to Rs 107/share and
assigned BUY rating to the stock.

Graphite India-- 2QFY2011 Result Update: Angel Broking

Visit http://indiaer.blogspot.com/ for complete details �� ��


For 2QFY2011, Graphite India (GIL) posted in-line top-line, which increased
16.0% yoy to `324cr (`279cr) on the back of the 48% yoy increase in sales
volumes. OPM for the quarter came in strong at 26.1% as graphite electrode
prices stabilised during the quarter. With the global steel industry showing signs of
revival, the company is well poised to benefit from the capacity expansion that it is
currently undertaking. At current levels, the stock is trading at 1.2x and 1.0x
FY2011E and FY2012E book value, respectively. We maintain a Buy on the stock.