Graphite India slips 5%, nears 52-week low on Rs 353 crore net loss in Q3

Shares of Graphite India slipped 5 for every cent to Rs 268 on the BSE…

Shares of Graphite India slipped 5 for every cent to Rs 268 on the BSE on Monday immediately after it reported a consolidated net decline of Rs 353 crore in December quarter (Q3FY20), thanks to steep tumble in electrode prices.

The graphite electrode company experienced posted a consolidated net financial gain of Rs 764 crore in the identical quarter previous fiscal. The stock was buying and selling close to its fifty two-week lower amount of Rs 255 touched on October 9, 2019.

The corporation posted 1st quarterly decline in far more than 1 decade. Before, in June 1997 quarter, it experienced posted net decline of Rs two lakh.

Graphite India throughout the quarter beneath evaluate reported sixty five for every cent 12 months-on-12 months (YoY) drop in its consolidated net product sales at Rs 643 crore. It posted working decline of Rs 445 crore in Q3FY20, against financial gain of Rs one,149 crore in the 12 months-ago quarter.

The lessen volumes and realization has impacted the product sales and margins as in comparison to identical interval previous 12 months. In addition, EBITDA (earnings ahead of curiosity, tax, depreciation, and amortisation) was impacted thanks to fair worth adjustment of stock amounting Rs 490 crore in Q3FY20.

The administration reported that throughout the quarter, the company’s efficiency was drastically impacted thanks to lessen volumes and realizations. In addition, profitability declined predominantly thanks to a non-income fair worth adjustment of stock at net realizable worth as for every Ind AS, of Rs 490 crore in Q3FY20.

The lessen steel production, graphite electrode demand from customers was impacted thanks to the usage of electrode stock built up by numerous customers previous 12 months when electrodes have been in quick supply.

Total, the demand from customers for graphite electrode is expected to strengthen with the decide on-up of steel production in formulated nations possessing sizeable electrical arc furnace (EAF) capacities. Further more, realignment of essential enter prices in line with electrode prices is the require of the hour to help the industry. Nevertheless, international slowdown in steel demand from customers coupled with amplified steel exports from China is expected to impact demand from customers of electrodes, it included.