Buy This Company Stock With 24% Return In 1 Year: ICICI Securities

Target Price

The current market price of Graphite India (GIL) is Rs. 525. ICICI Securities has set a target price of Rs. 650 for the stock that is expected to give 24% returns in a 1 year period to investors. So investors can consider this stock to buy now.

 

Company performance

Graphite India reports a consolidated capacity utilization of 81% compared to 60% in Q2FY21 and 75% in Q1FY22. ICICI Securities estimate for the company was 78%. the company's consolidated topline for the quarter stood at Rs. 692 crore, up 43% YoY and 13% QoQ. The brokerage firm expected it to be Rs. 712 crore.

Graphite India reports a consolidated net profit during the last quarter at Rs. 128 crore, which was down 15% QoQ. On the other hand, they reported a consolidated EBITDA at Rs. 109 crore, which was down 23% QoQ. However, their consolidated EBITDA margin came in at 15.8% compared to 23.1% in Q1FY22

ICICI Securities' stand on the stock

The brokerage firm in their report said, "GIL's share price has grown by ~3x over the last 12 months (from ~ Rs. 176 on November 2020 to ~ Rs. 525 levels in November 2021). We maintain our BUY rating on the stock. We value GIL at Rs. 650, 6.5x FY23E EV/EBITDA. The performance set to improve, going forward." Hence, keeping a target of Rs. 650, investors can buy this stock, as recommended by ICICI Securities.

About Graphite India (GIL)

ICICI Securities has said that Graphite India (GIL) is the largest Indian producer of graphite electrodes by total capacity. The company's manufacturing capacity of 98000 tonnes PA is spread over 3 plants at Durgapur & Nashik in India & Nuremberg in Germany. "GIL manufactures a full range of graphite electrodes, it stays focused on the higher-margin, large diameter, ultra-high power (UHP) electrodes. GIL has over 40 years of technical expertise in the industry", the firm informed.

Disclaimer

The above stock has been picked from the brokerage report of ICICI Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.