Graphite India Limited

Industrials — Electrical Equipment & Parts · NSE

₹770.05+₹2.85 (+0.37%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Graphite India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Graphite India Limited manufactures and sells graphite electrodes, and carbon and graphite specialty products in India and internationally. The company operates through Graphite and Carbon, Steel, and Others segments.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees1,669

Annual revenue₹2,873 Cr

How does it make money?

Turns over ₹2,873 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 1,669 employees supports ₹1.72 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.4%

Net margin6.1%

Revenue / employee₹1.72 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?Little sign of one

Returns on capital of 4.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE4.4%

ROE3.0%

Peer median ROE17.1%

What is the outlook?

3 analysts covering the stock expect revenue to grow about 20.0% and earnings to grow about 57.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+20.0%

Est. earnings growth+57.4%

Analysts3

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -9% while net margin moved -3% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-9%

Margin effect-3%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.1% a year
✗ Profit has declined at 4.2% a year

Quality vs. Valuation

Company Quality

40/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

43/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

70.5x

3Y Median

27.8x

40 monthly readings · mean 36.2x · range 9.5x–85.9x

Sector Median

88.8x

median of 3 sector peers

⚠️Current valuation is approximately 154% above its 3y median of 27.8x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 21% below the peer median of 88.8x.

vs. its own history

Expensive

27.8x median over 40 months · +154%

vs. sector peers

Cheap

88.8x median of 3 peers · -21%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

70.5x

P/B

2.57x

EV/EBITDA

39.9x

PEG

2.48

Dividend Yield

0.91%

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 15% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on capital is falling
ROCE has declined from 6.6% to 4.4% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 22% against revenue growth of -9% — customers are taking longer to pay.
Valuation above its historical average
At 70.5x the stock trades 154% above its own median of 27.8x.

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 6.29x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹170 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 22% against revenue up -9% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 21% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 6.29x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 22% against revenue up -9%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 154% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 11%✓ 13.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹170 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 4.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 27.8x✗ 70.5x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹15,045 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

70.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.57x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.92

Profitable

Profitable on a per-share basis

ROE

3.0%

Weak

Weak capital efficiency

ROCE

4.4%

Weak

Low return on total capital employed

Debt/Equity

6.29x

High

High leverage

Revenue Growth (YoY)

26.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

28.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.91%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹170 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹770.05

P/E (Forward)

14.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

14.4%

Average

Average margins

Net Margin

7.0%

Average

Average bottom-line conversion

Current Ratio

3.22

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.96

Market-like

Moves roughly in line with the market

52W Range Position

71%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

806.9 / 765.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

40.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,161 Cr	₹2,924 Cr	₹2,484 Cr	₹2,873 Cr	-3.1%
EBITDA	₹420 Cr	-₹46 Cr	₹295 Cr	₹385 Cr	-2.9%
EBITDA Margin	13.3%	-1.6%	11.9%	13.4%	—
PAT (Net Profit)	₹199 Cr	₹808 Cr	₹462 Cr	₹175 Cr	-4.2%
EPS	₹10.19	₹41.36	₹23.65	₹8.97	-4.2%
ROE	4.0%	14.4%	7.9%	3.0%	—
ROCE	6.6%	17.9%	9.9%	4.4%	—
Total Debt	₹432 Cr	₹177 Cr	₹173 Cr	₹368 Cr	-5.2%
Free Cash Flow	-₹330 Cr	₹421 Cr	₹333 Cr	-₹170 Cr	—

🔴 Revenue has shrunk at 3.1% a year over 3 years.

🔴 EBITDA has shrunk at 2.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 13.4% over 3 years.

🔴 PAT (Net Profit) has shrunk at 4.2% a year over 3 years.

🔴 EPS has shrunk at 4.2% a year over 3 years.

🔴 ROE has fallen from 4.0% to 3.0% over 3 years (-1.0 pts).

🔴 ROCE has fallen from 6.6% to 4.4% over 3 years (-2.1 pts).

🟢 Total Debt has shrunk at 5.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,580 Cr

Total Liabilities

₹1,724 Cr

Total Debt

₹368 Cr

Cash & Equivalents

₹22 Cr

Operating Cash Flow

₹83 Cr

Capex

-₹252 Cr

Shareholding (proxy)

Institutional Holding

14.6%

Insider Holding

66.0%

Corporate Actions

Dividend Rate

₹7

Ex-Dividend Date

20 Jul 2026

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹948

+23.1% vs CMP

Target Range

₹845 – ₹1,050

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive3 mixed2 general

Graphite India (NSEI:GRAPHITE) Stock Forecast & Analyst Predictions

Simply Wall Street, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Graphite India net profit rises 29% in Q1FY27 on volume surge

scanx.trade, 14 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

GRAPHITE Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Graphite India shares skyrocket 16% to fresh 52-week high; here's why

Business Standard, 09 Sept

Graphite India shares jump 18%, hit 52-wk high after GrafTech’s 30% price hike; why currently listed HEG stock may not benefit

Upstox, 08 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Graphite India Share Price Skyrockets 12%, Hits 52-Week High — Here's Why

NDTV Profit, 09 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟡Financial HealthAdequate11.9/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak6.2/15

🔴ValuationDemanding4.9/15

🔴RiskHigh3.6/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 11%13.4%
✗Free cash flow remains positive-₹170 Cr
✓Debt / EBITDA stays below 2x1.0x
✗ROCE stays above 8%4.4%
✗Valuation vs its own median of 27.8x70.5x today