Graphite India, the country’s largest company manufacturing graphite electrodes, has been witnessing strong buying in its shares based on its capacity to produce graphite electrodes. Its share price has jumped by around 16% so far this month. Long-term investors have also become crorepatis as a result of this surge in buying. Brokers predict that the company’s business will receive support from the rising demand for steel, and advise investors to buy its shares. According to brokers, the company’s shares could rise by 17% from current levels. The stock is currently trading at Rs. 375.75 on the BSE, up by 0.97%.
Graphite India has made its investors crorepatis over the course of 22 years. The stock was trading at just Rs. 3.50 on August 10, 2001, and is now up by 10636% at Rs. 375.75. This means that an investment of Rs. 1 lakh has become a corpus of Rs. 1.07 crore. However, the stock has had its ups and downs over the past year. It hit its high of Rs. 459.80 on August 1, 2022, and then fell by more than 45% in seven months to a low of Rs. 251.75. Since then, it has recovered by more than 49% and there are expectations of further recovery.
Research firm ICICI Direct predicts that Graphite India’s shares could rise to Rs. 440 from current levels, which is a jump of around 17%. The company did not have a great third quarter this year, with net profit falling by 45% on a quarterly basis and 69% on an annual basis. Its consolidated capacity utilization was just 55% in the third quarter, compared to 76% in the same quarter a year ago. However, brokers believe that the rising demand for steel will support the demand for graphite electrodes. The World Steel Association has predicted that steel demand will rise by 2.3% this year to 1.822 billion tonnes, and by a further 1.7% in 2024 to 1.854 billion tonnes. Steel companies are shifting towards the EAF (Electric Arc Furnace) process, which will increase the demand for graphite electrodes in the long term. Therefore, brokers have maintained a buy rating on Graphite India’s shares.
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