NSE: GRAPHITE, BSE: 509488

Corporate Presentation
September 2018
Important Notice

Forward Looking Statements

This presentation contains statements that contain “forward looking statements” including, but without limitation, statements
relating to the implementation of strategic initiatives, and other statements relating to Graphite India’s future business
developments and economic performance.
While these forward looking statements indicate our assessment and future expectations concerning the development of our
business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ
materially from our expectations.
These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in
currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of
third parties dealing with us, legislative developments, and other key factors that could affect our business and financial
performance.
Graphite India undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or
circumstances.

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Discussion Agenda

Investment Highlights_______________________________________ 4 -5

Milestones _______________________________________________ 6

Business Overview _________________________________________ 7 - 12

Financial Performance ______________________________________ 14 - 19

Strategic Outlook __________________________________________ 20

Industry Dynamics _________________________________________ 21 -25

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Investment Highlights
Graphite India is globally well positioned through its product quality, scale of operations and manufacturing platform base

Ranked 3rd Largest Graphite 98,000 mt

Leading Graphite Electrode
Electrode Manufacturer in the Capacity with Plants at Four
Manufacturer in India
World Locations

Strong International Client Base

Strong Balance Sheet with Net Included in MSCI Small Cap
with Exports constituting 37%
Cash Position Index
of FY2018 Sales

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Investment Highlights

Global Market Position Best-in-Class Operations Attractive Industry Dynamics Strong Financial Performance

❖ Largest Indian producer of ❖ High quality; around 37% of ❖ Consolidated industry with ❖ Consistent cash flows to support
graphite electrodes by total electrode production exported in significant entry barriers due to organic and inorganic market
capacity competition with global players technology intensive nature of opportunities
operations
❖ One of the leading players in a ❖ Focus on operational efficiency, ❖ China shutting down selected ❖ Track record of positive cash flow
highly consolidated industry productivity and technological steel and electrode capacities generation despite the difficult
know-how results in operating leading to increased production market conditions in recent years
❖ Accounts for approximately margins in line with market in EAF producing countries
12.6%1 of capacity among leading leaders
❖ Share of EAF’s route in global ❖ Strong balance sheet with net
global electrode manufacturers cash position
❖ Long-standing relationship with steel production increased from
key raw material suppliers 25% in 2015 to 28% in 2017
❖ Diversified client base with a
including needle coke ❖ Strong support for EAF route over ❖ Strong cost management has
global footprint
traditional blast furnace method resulted in one of the highest
due to: average EBITDA margins in the
❖ Access to low cost sources of industry
power • Relatively lower production
costs & capex requirement
❖ Consistent dividend policy
• Operational flexibility
• Generates less carbon emissions

Graphite India is globally well positioned through its product quality, scale of operations and manufacturing platform base

Notes:
1. Global capacity excludes Chinese producers 5
Milestones
Over 50 Years of Experience in the Graphite Electrode Industry

-Backward
integration Further
Predecessor through expanded
company formed acquisition of Durgapur plant
by Bangur family Fully integrated two CPC capacity from
Expanded 34K to 54K MT
and Great Lakes plant established manufacturing Installed a Durgapur plant pa taking group
Carbon Corp in Bangalore units in Barauni 7.5MW multi-fuel 1.5MW hydelpower
capacity from capacity to 98K
(USA) -Amalgamation power plant at plant
14K MT pa to MT pa
of IGE & GRP Nasik commissioned in
34K MT pa,
division with Karnataka
taking group
Carbon capacity to 78K
Corporation Ltd MT pa

1962 1967 1971 1974 1984 1989 1994 1998 2000 2001 2002 2004 2006 2009 2013

Promoted
Carbon Corp Production
Durgapur Production in Installed Graphite India Acquired 18K
Ltd with Powmex Steel, an
plant in IGE FRP/GRP 24MW formed from MT electrode
horizontal undertaking of
started Division Division power merger of two manufacturing
transfer of GKW Limited,
production started started capacity in leading graphite facility in
technology to was merged
Karnataka electrode players Nurnberg,
manufacture
in India Germany, from
graphite
Conradty
electrodes in
Nasik

6
Business Overview
Graphite India

Graphite and Carbon* GRP Pipes* Others*

95% 3% 2%
• Core expertise in value-added Ultra-High Power (UHP) electrodes • Pipes for water supply, sewage / • Largest producer of High-
industrial effluent collection and Speed Steel (HSS) in the
• 98K tonnes/year (TPA) capacity, with flexibility to produce all grades of
disposal, cooling towers, industrial country
electrode
process pipelines, seawater • HSS is used in the manufacture
• Backward integrated; manufactures Calcined Petroleum Coke for use in pipelines, industrial ducting and of cutting tools such as drills,
Highlights

electrode manufacturing gasoline storage taps, milling cutters, reamers,

• Enhanced product range – large diameter UHP electrodes and specialty graphite hobs, broaches and special
products form tools
• Impervious graphite equipment find applications in corrosive chemical • HSS cutting tools are
industries such as pharma, agro-chemical, chloro-alkali & fertilizer industries essentially utilized in
• Power generation capacity of 19.5MW through hydel route. It is used primarily automotive, machine tools,
as captive supply for the graphite electrodes business aviation and DIY markets

• Graphite Electrodes • Impervious Graphite Equipment: • High Speed Steel (HSS)

• Specialty Carbon and Graphite Heat Exchangers
• Alloy Steel
• Calcined Petroleum Coke
Products

• Carbon Paste

Graphite Electrodes Graphite Electrodes GRP Pipe Steel Melting

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*Percentage refers to FY2018 Sales Contribution
Business Overview
Strategically Located Manufacturing Facilities

Caters to European Cater to global

Countries markets

Barauni

Durgapur
Nurnberg

Nasik

Bangalore

Plant Location
Post Expansion Capacity ❖ The Indian plants are located close to the
(MT/Year) three main ports of India, offering logistic
Durgapur (India) 54,000 advantages to clients overseas
Bangalore (India) 13,000 ❖ Closer to customers in Indian markets
Nasik (India) 13,000 ❖ The German plant caters to the needs of
European customers and is located close to
Nurnberg (Germany) 18,000
the EU market
Total 98,000

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Business Overview
Diversified Premier Global Customer Base

North America:
Nucor Group
SDI Group
SSAB
Sterling Steel South East Asia and Far East:
PTCT Indonesia
Hyundai Steel Korea
Tokyo Steel Japan
Mexico: Middle East: Yusco Taiwan
Exiros Diler and Yazici
Qatar Steel India:
Emirates Steel Essar Steel
EZDK Jindal Steel & Power
Kuwait Steel JSW Steel
Jindal Shadeed Steel Authority of India
SABIC Tata Iron & Steel

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Business Overview
Global Player with Strong Profitability

Graphite Electrode Capacity (in thousand tonnes / Year)4 GIL Exports1

64.6%
55.2% 53.2%
1,325
44.4% 1,231
37.4%

Rs. Crore
972
230 857
689
167
98 96 80

Showa Denko* GrafTech Graphite India Tokai Carbon HEG 2014 2015 2016 2017 2018

Total Exports Export/Sales

❖ Graphite India is one of the largest graphite electrode manufacturers globally and the largest in India
❖ Average capacity utilization was 85% in FY2018 as compared to 74% in FY2017
❖ Operating margins remain one of the highest amongst the leading electrode manufacturers

Note:
1. Fiscal years; Consolidated Gross Sales
2. Show denko capacity is post acquisition of SGL Carbon business and after divesting SGL Carbon US business to Tokai Carbon
3. Accounts for FY2016 and FY2017 have been prepared in accordance with IND AS 10
4. Source – Macquarie Report, Company websites
Recent Development
Graphite India Limited, through its wholly owned subsidiary in Netherlands, has signed a definitive agreement
to acquire 46% stake in General Graphene Corporation for US$ 18.6 million

• General Graphene, a US based unlisted company located in Knoxville

About General (Tennessee)
• Company has developed a breakthrough proprietary technology which
Commenting on the development, Mr. K K
Bangur, Chairman of Graphite India said:
Graphene would allow them to produce large area, low cost graphene sheets in
industrial volumes for commercial applications
“We are extremely pleased to partner with
General Graphene in the development and
• Cash investment of upto US$ 18.6 million in General Graphene commercialization of this disruptive and high
Transaction • The investment will be made in multiple tranches over 2 to 3 years, end technology product. Graphene, with its
Details based on the achievement of agreed milestones in the process of
commercial production of graphene sheets
unique properties of being the strongest,
thinnest and lightest material known, is likely to
open up new opportunities in high tech
• Graphene is a two dimensional sheet of pure carbon structured in a applications further driving efficiency and
single layer of carbon atoms. Though it is chemically identical to both optimizing costs. Graphite India’s investment in
Graphene graphite and diamond, it is remarkably different
General Graphene is in line with its longstanding
Properties • It is strongest, thinnest and lightest material known and also more
conductive, both thermally and electrically, than any other material strategy of focusing on high end technologies.
and is corrosion resistant, flexible, transparent and impermeable. This initiative is expected to deliver meaningful
growth in the long term once commercialization
• Bio Electric Sensory Devices of the product is achieved and will result in
Product • Electronic Touch Screens
• Filtration
enhanced value creation for all the
Applications • Aerospace
stakeholders”.
• Energy storage
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Business Overview
Group Organizational Structure

Graphite India
Limited

Carbon Finance Graphite

Limited International B.V

Bavaria Electrodes Bavaria Carbon Bavaria Carbon Graphite Cova

GmbH Holdings GmbH Specialties GmbH GmbH

Incorporated Incorporated in Incorporated

in India Netherlands in Germany

Shareholding Pattern (Jun-18)

Others Promoters
20.1% 65.2%

Foregin Portfolio
Investors
6.0%
Mutual Funds
5.8%
Financial Institutions/Banks/ Insurance Companies
3.0% 12
Business Overview
Senior Management Team

Key Executives Background

K.K. Bangur • Over 30 years of experience in managing the affairs of companies and its business activities
Chairman • Has been a Director of Graphite India since July 1988 and Chairman since July 1993
• Chairman of the Shareholders/Investors Grievance Committee and Committee for Borrowings
• Past President of Indian Chamber of Commerce, Kolkata, Executive Committee member of FICCI, New Delhi and the past
President of All India Employers Organization, New Delhi
M. B. Gadgil • Mechanical Engineer with a Management Degree and has been with the Company for over 39 years
Executive Director • Responsible for the management of Company affairs and is actively involved in strategic/ investment decisions

Ashutosh Dixit • Mechanical Engineer with an MBA and PG Certificate in Metallurgy and has over 25 years of experience in the industry
President • Joined the Company in November 2017 and is responsible for Electrode and steel operations

B.Shiva • Mr. B Shiva, SVP (Legal) & Co Secretary, is a Law graduate and Fellow member of The Institute of Company Secretaries of India.
Senior VP, Legal & He has been with the Company for more than 24 years
Company Secretary
A. K. Dutta • Mr. A. K. Dutta is an Electrical Engineer with post graduation in management from IIM Calcutta and has about 33 years of
Senior VP, Marketing experience in marketing. He joined GIL in 2006

S.W. Parnerkar • Mr. S.W Parnerkar, M.Com, L.L.B , FCMA , FCS, is the head of Finance of the Company
Senior VP, Finance • Associated with the company for more than 23 years, he is responsible for all accounts and financial aspects of the Company

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Consolidated Yearly Performance Trends
Net Sales (in crores) and Growth (%) Operating Profit (EBITDA) and Margins
3,266 47%

123% 1,533

2,009
Rs. Crore

Rs. Crore
1,711
1,532 1,468
15%
3% 11%
(10)% (4)% 10% 9%
(15)%

295 126
172 184
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Net Profit and Margins Dividend Per Share (DPS)

17.00

32%
Rs. Crore

5% 3.50
6% 4%
3% 2.00 2.00 2.00
130 1,032
58 83 70
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
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Consolidated Financial Performance
Q1 y-o-y Q4 q-o-q Full Year y-o-y
(Rs. Crore) FY2019 FY2018 Growth (%) FY2018 Growth (%) FY2018 FY2017 Growth (%)
Gross Sales1
1,965 415 373% 1,323 48% 3,291 1,554 112%
(Excluding Other Income)

Net Sales
1,965 390 404% 1,323 48% 3,266 1,468 123%
(Excluding Other Income)

Operating Profit (EBITDA)2 1,466 59 2,385% 756 94% 1,533 126.0 1,116%
Margin (%)3 75% 15% 57% 46.9% 8.6%

Interest 2 1 2 8 8
Depreciation 13 13 13 52 46
Profit Before Tax 1,451 45 3,124% 741 96% 1473 72 1,945%

Net Profit 957 30 3,090% 540 77% 1,032 70 1,365%

Margin (%) 49% 8% 41% 31.6% 4.8%

Earnings Per Share 49.08 1.54 3,090% 27.69 77% 52.81 3.61 1,365%

Capacity Utilization (%) 88% 84%% 91% 85% 74%

Notes:
1. Q1 FY2018 onwards Net sales is net of excise
2. Operating Profit includes Other Income 15
3. All margins calculated as a percentage of Net Sales (excluding Other Income)
Standalone Financial Performance
Q1 y-o-y Q4 q-o-q Full Year y-o-y
(Rs. Crore) FY2019 FY2018 Growth (%) FY2018 Growth (%) FY2018 FY2017 Growth (%)
Gross Sales1
1,777 376 373% 1,212 47% 2,983 1,392 114%
(Excluding Other Income)

Net Sales
1,777 351 406% 1,212 47% 2,958 1,306 127%
(Excluding Other Income)

Operating Profit (EBITDA)2 1,328 57 2,230% 705 88% 1,441 159 804%
Margin (%)3 75% 16% 58% 49% 12%

Interest 1 1 2 6 7 (5)%
Depreciation 11 12 11 46 42 12%
Profit Before Tax 1,316 44 2,891% 692 90% 1,389 111 1,146%

Net Profit 858 30 2,760% 454 89% 914 112 714%

Margin (%) 48% 8% 37% 31% 9%

Earnings Per Share 44.00 1.51 2,760% 23.22 89% 46.76 5.75 714%

Capacity Utilization (%) 98% 95% 100% 95% 80% 16

Leverage Profile
Significant financial flexibility available for future organic / inorganic growth

Consolidated Leverage Profile Standalone Leverage Profile

(Rs. Crore) June-18 March-18 June-17 (Rs. Crore) June-18 March-18 June-17

Total Debt (218) (272) (296) Total Debt (169) (155) (171)

Cash & Cash Cash & Cash

1,741 1,263 773 1,671 1,197 723
Equivalents1 Equivalents1

Net Cash 1,523 991 477 Net Cash 1,502 1,042 552

Notes:
1. Cash and cash equivalents include Mutual Fund investments 17
* All numbers in Crores unless specifically mentioned
 Yearly Segment Performance

Consolidated Segment Performance Standalone Segment Performance

Full year y-o-y Full Year y-o-y

(Rs. Crore) FY2018 FY2017 Growth (%) (Rs. Crore) FY2018 FY2017 Growth (%)
Graphite and Carbon 3,140.4 1,415.6 121.8% Graphite and Carbon 2,833.1 1,257.4 125.3%
Others 151.1 138.6 9.0% Others 150.6 134.8 11.7%
Less: Inter Segment Sales (0.3) (0.4) Less: Inter Segment Sales (0.3) (0.4)
Segment Revenue 3,291.2 1,553.7 112.0% Segment Revenue 2,983.4 1,391.8 114.4%
Graphite and Carbon 1,465.1 13.0 - Graphite and Carbon 1,377.1 53.3 2,483.7%
Others 10.6 23.9 (55.8%) Others 11.3 20.8 (45.7%)
Profit before tax and interest 1,475.6 36.9 3,895.8% Profit before tax and interest 1,388.3 74.1 1,773.5%
Finance Cost (8.1) (7.9) Finance Cost (6.2) (6.5)
Unallocated Income / (expense) 5.4 42.7 Unallocated Income / (expense) 6.7 43.8
Profit Before Tax 1,473.0 71.8 1,951.5% Profit Before Tax 1,388.8 111.4 1,146.7%

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* All numbers in Crores unless specifically mentioned
 Quarterly Segment Performance

Consolidated Segment Performance Standalone Segment Performance

Q1 y-o-y Q4 q-o-q Q1 y-o-y Q4 q-o-q

Growth Growth Growth Growth
(Rs. Crore) FY2019 FY2018 FY2018 (Rs. Crore) FY2019 FY2018 FY2018
(%) (%) (%) (%)
Graphite and Carbon 1,912 389 391% 1,265 51% Graphite and Carbon 1,725 351 391% 1,152 50%

Others 53 26 104% 58 (9)% Others 52 25 108% 60 (13)%

Less: Inter Segment Less: Inter Segment
- - - - - -
Sales Sales
Segment Revenue 1,965 415 373% 1,323 48% Segment Revenue 1,777 376 373% 1,212 47%

Graphite and Carbon 1,439 38 3,687% 746 93% Graphite and Carbon 1,304 38 3,324% 693 88%

Others 5 - - 4 3% Others 4 (2) 8 (50)%

Profit before tax and Profit before tax and
1,444 38 3,700% 750 92% 1,308 36 3,533% 701 87%
interest interest
Finance Cost (2) (1) (2) Finance Cost (1) (1) (2)
Unallocated Income / Unallocated Income
9 8 (7) 9 9 (7)
(expense) /(expense)
Profit Before Tax 1,451 45 3,124% 741 96% Profit Before Tax 1,316 44 2,891% 692 90%

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* All numbers in Crores unless specifically mentioned
Strategic Outlook
Near Term Strategic Plan

Strategically established new eco-friendly facilities with advanced technology and greater energy
efficiency

Recent capacity shutdown in China and decreased exports to other EAF producing countries is
expected to provide impetus to electrode demand and price. We are well positioned to benefit
from the growing demand for graphite electrode in the medium term globally.
Graphite and Carbon

Use low cost base and high product quality to expand global reach and customer base at
competitive prices

Enhance presence in value added graphite products and grow impervious graphite equipment
business

Focus on improving margins through proactively managing production schedules and resource
optimization across facilities

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Industry Dynamics
Global Steel and Graphite Electrode Industry

Global Steel Production Process Wise Steel Production 2017

1,606 1,663 1,617 1,627 1,689

6.5%
32.8%
Million Tonnes

28.2% 28.0% 43.2%

25.6% 25.1% 25.3% 60.0%
71.5%
91.0%
93.5%
453 426 406 412 473 67.2%
56.8%
40.0%
9.0% 28.0%

2013 2014 2015 2016 2017 Middle East India North Europe China Total Global
Total Steel Production EAF % EAF in Total Steel America Production
EAF BOF
❖ EAF route of manufacturing enjoys several advantages over traditional BOF route:
o Lower capital investment
o Lower break-even tonnage
o Flexibility in locating plants closer to consumption
o Less polluting than integrated steel plants
❖ India has been increasing its market share of graphite electrode production steadily over the past few years due to relatively low cost of
operations
❖ China shutting down selected steel capacities to curb pollution resulting in decreased exports from China and increased production in EAF
producing countries

Source: World Steel Association

Steel Industry Outlook and Dynamics

▪ According to World Steel Association (WSA), world crude steel production was 881.5 Mt in the first six months of 2018, up
by 4.6% compared to the same period in 2017. The world crude steel capacity utilization in June 2018 was 78.5% as
compared to 74.7% in June 2017
▪ India continued it’s strong growth momentum and registered a growth of 6.9% in Q2 CY2018. This was driven by domestic
demand for steel which has been supported by a strong pick-up in infrastructure and manufacture sector
▪ Steel production in Middle East increased significantly by 12.7% y-o-y in Q2 CY2018 supported by recovery in oil and
commodity prices and the outlook is positive for MENA countries
▪ In Q2 CY2018, the US steel production increased by 2.5% y-o-y. This growth is likely to continue since the outlook for steel
demand in the US remains robust on the back of the strong economic fundamentals, consumption and investment
▪ The EU steel production increased by 2.2% y-o-y in Q2 CY2018
▪ WSA forecasts global steel demand to increase by 1.8% to 1,616.1 million Mt in 2018, and further increase by 0.7% to
1,626.7 million Mt in 2019
▪ As per WSA, steel demand in developed economies’ is expected to increase by 1.8% and in developing economies (excl.
China) by 4.9% in 2018

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Graphite Electrode Industry

▪ China net steel exports were down by 15.5% in first half of 2018 to 28.7 million mt. This has allowed increased steel
production and higher utilization in the other EAF steel producing nations
▪ The closure of inefficient induction furnaces and highly polluting blast furnaces in China are being replaced by
environment friendly electric arc furnaces (EAF’s) which is supported by increased availability of scrap
▪ Around 56 new EAF furnaces is expected to come online in 2018 with an aggregate capacity of 60-70 million mt. The share
of steel manufacturing capacity using EAF has already risen to 9 percent in 2017 from 6 percent earlier. The Chinese
government has set a target of achieving 20 percent steel production through the EAF route by 2020. Additionally, recent
closure of 2,00,000 -3,00,000 tonnes of electrode capacity led to shortage of electrodes. These factors have resulted in an
increased demand of graphite electrodes
▪ Such developments augur well for the industry and have led to an improved demand and supply balance, along with
favorable electrode pricing scenario
▪ The needle coke industry is highly concentrated and petroleum needle coke demand is increasing due to its use in lithium-
ion batteries used in electric vehicles. Hence, the timely availability of adequate needle coke at a reasonable price shall
determine the effective/profitable utilization of any meaningful addition to electrode capacity across the industry

23
Industry Dynamics
Over the years, China remains the biggest crude steel producer with a 49.2% share in 2017 vs 45.4% in 2010 & 18.1% in 2001

Global Steel Production 2001 Global Steel Production 2010

Others China Others

15.7% 18.1% North America 11.8% China
India
North America 7.9% 45.4%
3.3%
14.3% CIS
Other Europe 7.7%
5.3%

European Union
Japan 12.3%
CIS 12.3%
11.9% Japan Other Europe India
7.8% 2.3% 4.9%
European Union
19.0%

Global Steel Production 2017

North Others,
America, 13.3%
6.9%
CIS, 6.0% China,
49.2%

European
Union,
10.0%
Japan, 6.2% Other
Europe, India, 6.0%
2.5%
Overcapacities in China led to subsidized exports however the trend has changed in 2017 with China shutting down selected steel
capacities to curb pollution resulting in decreased exports and increased production in EAF producing countries
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Source: World Steel Association
Industry Dynamics
EAF Steel Production Process
Electric Arc Furnace
Graphite Electrodes
Electrode Clamp/Power
Supply
Water Cooled Roof
Molten Steel

Slag Door

Arc Zone EBT(Eccentric Bottom

Tap Hole)

Hearth

Ladle

Tilting Cylinder Rack & Pinion

LTC(Ladle Transfer Car)

❖ An electric arc furnace (EAF) is a furnace that heats charged material by means of an electric arc
❖ Arc furnaces range in size from small units of approximately one tonne capacity (used in foundries for producing cast iron
products) up to about 400 tonne units used for secondary steelmaking
❖ Electric arc furnace temperatures can be up to 1,800 degrees Celsius and the electrode tip & arc temperatures can go as high
as 3,000-4,000 degrees Celsius
❖ Graphite Electrodes are consumed in an electric arc furnace
o An electrode typically lasts for 22-30 heats /batches or 10 hours
o A single graphite electrode can weigh over 2 tonnes
o Electrode demand is driven by the production of steel through the EAF method
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 Graphite India Limited
(CIN: L10101WB1974PLC094602)
31 Chowringhee Road, Kolkata 700 016
Phone: +91 33 4002 9600
Fax: +91 33 4002 9676
www.graphiteindia.com

M.K. Chhajer +91 33 40029622

Graphite India Limited mkchhajer@graphiteindia.com

Ravi Gothwal /
+91 22 6169 5988
Samantha Francis

Churchgate Partners graphite@churchgatepartners.com

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