Graphite India shares have surged over 18% in the past two sessions, driven by a significant increase in graphite electrode prices announced by GrafTech International. The price hike, effective immediately, is expected to enhance margins for Graphite India, the largest Indian producer of graphite electrodes with a manufacturing capacity of 80,000 tonnes per annum.
The development gains significance as Graphite India is currently the only listed pure-play company in the graphite electrode space. HEG, another listed graphite manufacturer, is set to demerge its Graphite Electrodes business, with the new entity expected to be listed next month. GrafTech International's decision to raise prices by a minimum of 30% underscores the need to restore pricing to sustainable levels, ensuring continued investment in production capabilities.
Graphite India's financial performance in the June quarter showed a 28.4% year-on-year rise in net profit to Rs 172 crore, compared with Rs 134 crore a year earlier. Revenue increased by 26.6% to Rs 842 crore from Rs 665 crore in the previous fiscal. The company's EBITDA rose to Rs 144 crore from Rs 43 crore, with the operating margin expanding to 17.1% from 6.4% a year ago.
The latest price increase follows GrafTech's March 2026 pricing action, when graphite electrode prices were raised by a minimum of $600 to $1,200 per metric ton. Higher electrode prices could potentially translate into better margins and realisations for Graphite India.
Graphite India is one of India’s leading manufacturers of graphite electrodes, which are a key input in electric arc furnaces used for steel production. The company also produces carbon and graphite speciality products and exports to several international markets, leaving its performance exposed to global demand trends and trade policies.
Background
Graphite India has faced challenges in the past, including a difficult March quarter when earnings declined sharply due to weaker demand. The recent price adjustments in the graphite electrode market are crucial for the company to maintain its profitability and competitive edge.
The recent developments in the graphite electrode market could position Graphite India for improved financial performance in the coming quarters. Investors should watch for further pricing adjustments and the impact of HEG's demerger on market dynamics.
