Midcap Stock Rises 15.63% in 1 Week, Recommends Rs. 8.50/Share Dividend, Buy, Says ICICI Direct

Brokerage firm ICICI Direct initiates a Buy on Graphite India Ltd. (GIL) with a target price of Rs. 440/share. The brokerage claims a potential upside of up to 19% from its current level in 12 months.

In a Board meeting held on May 30, 2023, the co. recommended a dividend of Rs. 8.50/share of face value of Rs. 2 each. The dividend is subject to approval by the members in the AGM of the company.

GIL is a midcap industrial products sector company. It has a market capitalisation of Rs. 7.269.93 crore.

Dividend

"The Board of Directors have recommended a dividend of Rs.8.50 per equity share of Face Value of Rs. 2/- each on 195375594 equity shares of the Company, subject to approval of the members in the 48th AGM of the Company. Dividend will be paid/dispatched to the shareholders within 15 days from the date of AGM," the company said in an exchange filing.

Q4FY23 Results

According to the brokerage firm, GIL reported an operationally muted performance in Q4FY23. For Q4FY23, GIL's consolidated capacity utilisation was at 55% compared to 76% in Q4FY22 and 42% in Q3FY23, lower than our estimate of 60%. For Q4FY23, it reported a consolidated topline of Rs. 815 crore, down 3% YoY but up 16% QoQ (our estimate of Rs. 729 crore). Consolidated EBITDA for the quarter was at Rs. 62 crore, down 30% YoY and 14%. Consolidated EBITDA margin for the quarter was at 7.6% compared to 10.4% in Q4FY22 and 10.3% for Q3FY23. During the quarter, consolidated other income was at Rs. 5 crore, down 93% YoY and 85% QoQ (our estimate of Rs. 45 crore). Ensuing consolidated PAT for the quarter was at Rs. 29 crore, down 69% YoY and 45% QoQ.

Buy Stock of GIL for a Target Price of Rs. 440/share

ICICI Direct said, "GIL's share price has given a return of ~82% over the last three years (from ~Rs. 206 in May 2020 to Rs. 375 in May 2023). We maintain our BUY rating on the stock. We value GIL at Rs. 440, 6.5x FY25E EV/EBITDA".

Stock Outlook - Current Market Price, 52-week High/Low, Returns

The stock is currently trading Rs. 370/share on NSE, down 1.04% from its previous close. The stock rises 15.63% in the past 1 week. It surged 14.58% in the past 1 month and 24.51% in the past 3 months, respectively.

It gave 16.46% negative return in 1 year. In the past 3 years, it gave 74.73% positive return. In the past 5 years, it gave 53.58% negative return.

About - Graphite India Ltd. (GIL)

Graphite India (GIL) is the largest Indian producer of graphite electrodes by total capacity. Its manufacturing capacity is 98000 tonnes per annum. While 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.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.