InvestorQ : is Graphite India Ltd a good buy at CMP of Rs. 302.10?
Milind Joshi made post

is Graphite India Ltd a good buy at CMP of Rs. 302.10?

shrinidhi Rajan answered.
3 years ago

The stock of Graphite has fallen sharply from a high of above Rs.1000 after a very sharp rally in the last 3 years. Graphite India supplies electrodes for electric arc furnaces in the steel industry. With most steel companies going slow on their expansion plans and their financials already under pressure, it has directly hit companies like Graphite India. The stock is reasonably priced considering that it was a very long time high dividend yield stock. Recent results have been disappointing for the stock.

While the downside may be limited, you should still wait for the steel cycle to turn or for Chinese demand to pick up. That would be a more sure shot way to play the stock with limited downside risk. Also, the risk in the particular stock is that there are lower priced products now available in the Chinese markets and hence their pricing power may also be gone. You can buy but be cautious about your timing.