Graphite India's Q2 FY21 sales see an improvement of 35% in September quarter

Indian Graphite electrodes manufacturer, Graphite India (GIL) posted revenue from operations at INR 473 crore for Q2 FY21 (Jul-Sep'20), against previous quarter's (Apr-Jun'20) revenues of INR 350 crore.

• Company registered a profit of INR 5 crore in Q2 FY21 against a loss of INR 13 crore for the quarter ended in Jun'20.
  
  
• The company's capacity utlisation in Q2 FY21 stood at 60% against 36% in Q1 FY21.
  
  

How situation improved in Q2 FY21?

There was a sharp fall in the overall revenues in first quarter (Ap-Jun'20) largely due to the plant shutdown between end of March and mid-May at the behest of the government. The German plant of Graphite also had to be shut down to adhere to COVID norms.

However, commenting on company's performance KK Bangur, Graphite India's chairman said the second quarter of the fiscal year started on a positive note with partial relaxation in lockdowns and gradual resumption of busines activity. Operations were started at GIL's units from May onwards and ramped up production in a phased manner.

Domestic steel industry registered a strong rebound in the quarter with steel production increasing by 73% on q-o-q basis to 27.1 mn t driven by improvement in industrial activity and higher exports.

The company's volume growth during the quarter was also driven by demand from domestic steel players however realization remained under pressure.

Outlook ahead

In Q3 CY2020, recovery in steel demand in the rest of the world is stronger than expected, however second wave of the crisis still pose a major concern on the steel demand and outlook

The company remain cautiously hopeful that the down cycle of the electrode industry is bottoming out and with the uptick in overall economic activity, a growth is expected in the medium term. In the current market conditions, Graphite India would continue to focus on operational excellence and prudent capital management to emerge stronger.