Weak demand and heightened inventory led to Graphite India Ltd.’s subdued realisations and lower sales volumes (last six quarters).
We expect it to benefit, however, from coming tailwinds.
- A pick-up in steel production globally (up 2.3% YoY in Q2 FY21)
- The recent rebound in graphite-electrode prices in China
- Expectations of complete destocking of electrode stocks in the next two quarters
- Benign raw material prices
Q2 FY21 capacity utilisation improved sequentially from 42% to 72%, which, we believe would continue.