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Graphite India, HEG rise for second straight day, up 5%

Graphite India is locked in upper circuit for the second straight day, up 5% at Rs 709 on the BSE. HEG too up 5% at Rs 2,813, extending its previous day's 4.5% gain.

SI Reporter  |  Mumbai 

Shares of graphite electrode up for second straight day

Shares of (GE) manufactures such as and were trading higher for the second straight day on expectations of a strong demand which is likely to push up prices for at least 2-3 years.

is locked in upper circuit for the second straight day, up 5% at Rs 709 on the BSE. too up 5% at Rs 2,813, extending its previous day’s 4.5% gain.

These stocks had corrected 11% to 22% from their respective record highs reported on earlier current calendar year. hit an all-time high of Rs 3,147 on January 16, while touched record high of Rs 908 on January 4, in intra-day trade.

“There have been certain concerns surrounding sustainability of demand and higher prices. We understand that demand will continue to be strong and supply will remain tight, supporting strength in prices,” analysts at Emkay Global Financial Services said in management meet update.

HEG’s debt has dropped to Rs 2 billion, which is likely to be NIL in Q4FY18 itself. The company has been evaluating capacity expansion by 20ktpa depending on Needle Coke availability. Growth and diversification are also options for cash usage, the brokerage firm said in a report dated March 12, 2018.

Technology deterrence, physical set-up barrier and limited Needle Coke supply will restrict any new capacity addition at least for next 2-3 years. Therefore, we believe both offtake and realization will continue to be robust and sustainable for the next few years, it added.

Analysts understand that earnings improvement will continue, March being the first month of new and higher prices. Even though Needle Coke prices rise, the spread will still be much favorable. The brokerage firm expects further upside from the current level.


First Published: Tue, March 13 2018. 12:15 IST
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