Graphite India Q4FY17 standalone net profit rises 117% YoY

KOLKATA: Graphite India reported a 117 per cent jump in its net profit at Rs 62 crore for the fourth-quarter (Q4) ended March 31, 2017, compared to Rs 28.6 crore profit posted in the corresponding period previous fiscal. The growth in net profit follows a 7.5 per cent rise in gross sales at Rs 390.3 crore in the said period as against Rs 363 crore earned in the corresponding previous quarter.

Company officials attributed the improved net profit to 50.7 per cent drop in interest cost to Rs 1.1 crore in Q4 FY2017 compared to Rs 2.2 crore in Q4 FY2016. Net profit also benefited from write back of income tax provision arising out of favorable income tax orders, the company release stated.

Increased sales volume was offset by lower price realization primarily because of a stronger rupee in Q4 FY2017, the release pointed out.

Operating profit ( EBITDA) in the quarter under review was up 2.3 per cent at Rs 45.8 crore. Capacity utilization in Q4 FY2017 was 89 per cent compared to 70 per cent in Q4 FY2016.

The company's board of directors has recommended a dividend Rs 2 per equity share of Rs 2 each.

Commenting on the industry's future outlook, Graphite India chairman K. K. Bangur said: "Despite production volumes growth, higher input costs and continued lower realizations impacted margins. However, the industry dynamics has changed with realizations firming up from the beginning of this financial year. We expect the benefit of improved pricing to reflect in our financial performance going forward."

Steel demand in the last fiscal has been stronger than expected with the upside coming mostly from China. "We expect the domestic steel industry to remain robust with strong government policy support in the long term and is optimistic about the prospects of the graphite electrodes industry," he added.