As cash inflow rises, graphite makers in India face the problem of plenty

Two relatively small firms - HEG and Graphite India - together make a profit of Rs 17 bn in Q1, more than L&T

Ravi Jhunjhunwala, chairman and managing director of graphite electrode-maker HEG, has never seen such large cash entering the company’s coffers in four decades. HEG earned Rs 7.7 billion in profit for the quarter ended June 2018, compared with a profit of Rs 10.81 billion in the entire FY18. The profit translates into a supernormal Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin of 75 per cent. 

The Rs 7.7-billion quarterly profit, on a revenue of just Rs 15.95 billion, is higher than what some of the top Indian firms in sectors such as cement, steel, and paints do. Cement maker