GRAPHITE INDIA LTD - Quantamental Equity Research

Quantamental Equity Research on GRAPHITE INDIA LTD | Release: 19 Feb 2019 16:37:06 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:GRAPHITE and BSE CODE:509488
Last Close:  INR 429.85
Fair Value:  INR 401.35
Est. Price by Mar 19:  INR 511.8
Market Capitalization (INR Crs):  8399.27
Industry:  Other Industrial Goods
Rating:  BUY
Upside:  19%
Company Profile
Graphite India (GIL) is the pioneer in India for manufacture of Graphite Electrodes as well as Carbon and Graphite Speciality products.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 123% 47% 30%  
EBIT % 1760% 1107% 498%  
Earnings % 1365% 1692% 668%  
Book Value %  47% 56% 60%  
Stock Total Return %  470% 741% 799%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 65.22  
(B) FII/FPI 8.32  
(C) DII/Insurance Companies 8.35  
(D) Public holding < 2 lakhs of cap. 10.48  
(E) Others 7.63  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 93 97 90 78 88 84 75 123 703 512 576 644 723 823  
Return on Equity 18% 12% 13% 8% 7% 3% 5% 4% 38% 60% 25% 22% 16% 13%  
Price to Earning  6.8 10.0 8.3 11.4 13.2 28.4 17.8 34.2 13.3 3.4 7.4 7.7 10.3 13.1  
EVTI 1.3 1.4 1.1 1.0 0.9 0.9 0.8 1.3 3.8 1.1 1.0 0.9 0.9 0.9  
EVTIFM 6.8 10.0 8.3 11.4 13.2 28.4 17.8 34.2 13.3 3.4 7.4 7.7 10.3 13.1  
Price to Book Value 1.2 1.2 1.1 0.9 1.0 0.9 0.8 1.3 5.0 2.0 1.8 1.7 1.7 1.7  
Debt to Equity  0.3 0.2 0.4 0.4 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.0 0.0 0.0  
Dividend Yield 4% 4% 4% 4% 4% 2% 3% 2% 2% 7% 3% 3% 2% 2%  
Cash Flow to Firm 28% 3% -3% 3% 33% 14% 21% 10% 8% 17% 11% 14% 14% 14%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales       3,265.98       7,997.14     10,388.00     12,465.60     13,712.16     14,397.77  
EBITDA       1,532.69       4,646.08       2,597.00       2,804.76       2,399.63       2,159.67  
EBIT       1,481.07       4,519.68       2,310.01       2,483.09       2,070.91       1,856.62  
PBT       1,472.99       4,511.60       2,295.16       2,472.79       2,070.91       1,856.62  
NPAT       1,032.00       2,978.11       1,515.03       1,632.29       1,367.01       1,225.56  
Price to Earning             13.31              3.36              7.42              7.71            10.33            13.12  
Price to Book Value              5.03              2.01              1.84              1.71              1.68              1.73  
Debt to Equity               0.10              0.10              0.06                 -                   -                   -    
Return on Equity              0.38              0.60              0.25              0.22              0.16              0.13  
Enterprise Value to Total Income (EVTI)              3.82              1.12              0.99              0.89              0.87              0.89  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            13.49              3.42              7.49              7.52              9.65            11.62  
Price or Est. Share Prices          703.28          511.80          575.75          643.95          722.80          823.15  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT       4,511.60       2,295.16       2,472.79       2,070.91       1,856.62  
Interest              8.08            14.85            10.30                 -                   -    
Depreciation          126.40          286.99          321.67          328.72          303.04  
Cash Flow Before Tax       4,646.08       2,597.00       2,804.76       2,399.63       2,159.67  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax       3,066.88       1,714.28       1,851.42       1,583.99       1,425.59  
Terminal Cash Flow                                                                                    -         4,147.53  
Total Cash Flow       3,066.88       1,714.28       1,851.42       1,583.99       5,573.12  
Present Value of Cash Flow       7,842.02  
Debt                 -    
Value of Equity       7,842.02  
Fair Value Per Share          401.35  
Equity            8,399
Debt               272
Beta Take from Reuters 1.8
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                   8
Tax Benefit                   2
Interest Net of Tax                   6
Debt               272
Cost of Debt 2%
Cost of Equity 20%
Debt Weight 3%
Equity Weight 97%
WACC 20%
Cash Flow of Mar-23 E       1,425.59
Growth -15.3%
Present Value of Terminal Cashflow       4,147.53
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Hind.Aeronautics           624.05          20,867          377.45            18.48            25.16              0.80              8.43              1.65              9.36              0.08              5.16              8.87              5.19          17,931            89.97                 52            69.53              3.44            57.28          -17.03          752.41
   2  Cummins India           684.10          18,963          145.91            23.44            21.20              2.88            37.85              4.69            25.53              0.06              2.19              9.68              9.34            6,317            51.00               170              1.13            11.00          -11.57              8.65          296.62
   3  Thermax           996.85          11,878          235.36            13.91            15.52              1.87            18.91              4.24            37.65              0.09              0.60              9.86            22.96            5,522            61.98                 91              0.63            28.62              0.70            98.50          359.09
   4  HEG        2,223.15            8,884          807.35          239.95            90.57              1.19              2.66              2.75              2.81              0.16              3.60          169.01        -445.92            7,609            61.04                 11              3.97          121.31            -2.48          153.38       3,790.17
   5  Graphite India           429.85            8,399          232.04          129.94            57.86              0.96              2.55              1.85              2.49              0.10              3.95          100.42        -310.41            7,684            65.22                 12          -20.90            80.98          -31.36          112.81          949.69
   6  Carborundum Uni.           346.15            6,547            87.86            18.58            20.44              2.26            32.17              3.94            25.97              0.08              0.65            14.92            14.33            2,816            42.32               138              5.05            13.29            -9.65              3.74          162.27

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