Graphite India tumbles 9% in two sessions

Graphite India declined 3.81% to Rs 195.55, extending slide for the second straight session after weak Q4 outcome.

The company reported consolidated net loss of Rs 7 crore in Q4 March 2020 as against net profit of Rs 562 crore in Q4 March 2019. Consolidated net sales slumped 64.4% to Rs 602 crore in Q4 March 2020 over Rs 1,693 crore in Q4 March 2019. The firm reported pre-tax loss of Rs 23 crore in Q4 March 2020 as against pre-tax profit of Rs 850 crore in Q4 March 2019.

The Q4 result was released during trading hours on Tuesday (9 June). The stock hit a lower circuit of 5% on Tuesday, following the Q4 results. The counter has lost 8.62% in two days.

Graphite India said lower volumes and realization has impacted the sales and margins on a year on year basis. Volumes improved in Q4 FY20 as compared to Q3 FY20, however sales were impacted due to lower realizations. The company recorded a consolidated EBITDA loss of Rs 3 crore and an adjusted EBITDA (after eliminating the impact of fair value of inventory as per Ind AS) loss of Rs 64 crore during the quarter. The EBITDA was impacted due to fair value adjustment of inventory amounting to Rs 584 crore in FY2020.

Nation-wide lockdown announced on 24 March 2020 to contain the outbreak of COVID-19 resulted in muted sales in the last week of March 2020. While the sales and profitability of the company for the quarter were impacted due to the Iockdown, it is not possible to ascertain the exact quantum thereof. In the prevailing circumstances, Graphite India clarified it does not expect any impact of COVID 19 on its ability to continue as a going concern.

The global and domestic demand for graphite electrode has been impacted due to partial closure of steel capacities, lower steel production and destocking of electrode inventory at customer end at a lower-pace than anticipated. The company is operating its factories at a low capacity and will scale up its operation after carefully assessing the course of Covid-19 in the near term, the company said in a statement.

Graphite India is the largest Indian producer of graphite electrodes and one of the largest globally, by total capacity.

Powered by Capital Market - Live News