Graphite India Downplays US Tariff Threat Citing Diversified Export Base as Q2 EBITDA Jumps 43%
Graphite India Limited has stated that the preliminary trade duties levied by the United States Department of Commerce on imports of large-diameter graphite electrodes will not have any material impact on its operational and financial performance. Presenting the company's performance for the second quarter ended September 2026 (Q2 FY2027), Chairman K K Bangur noted that the company's geographically diversified export revenue base shields it from tariff-induced shocks in the US market.
The clarification comes after trade actions initiated earlier this year by US regulators against large-diameter graphite electrodes originating from India and China. Despite the regulatory overhang in the American market, the Kolkata-based manufacturer reported resilient operational performance, backed by high capacity utilisation and strong balance sheet liquidity.
Trade Headwinds and US Tariff Actions
The United States Department of Commerce has been conducting dual anti-dumping (AD) and countervailing duty (CVD) investigations into large-diameter graphite electrodes following petitions filed by domestic American manufacturers:
- In July 2026, the US Department of Commerce preliminarily set a countervailing duty rate of 3.68% on Graphite India's electrode shipments, compared to 6.99% for domestic peer HEG Limited.
- In late September 2026, the US authority reached a preliminary anti-dumping determination, setting a dumping margin of 12.22% for Graphite India, which translates into a provisional cash deposit rate of 9.88% for importers upon taking effect.
While Graphite India acknowledged the regulatory proceedings to the stock exchanges, its management maintained in the Q2 FY2027 presentation that reliance on the US market is adequately balanced by sales across other international jurisdictions. The company did not alter its production mix or pricing strategies, relying instead on its broad geographic footprint to mitigate localized tariff friction.
Financial Performance in Q2 FY2027
Alongside its tariff assessment, Graphite India posted a strong set of consolidated numbers for the quarter ended September 30, 2026:
- Consolidated net sales rose 13.3% year-on-year to Rs 826 crore.
- Consolidated EBITDA expanded by 43.2% year-on-year to reach Rs 189 crore.
- Plant capacity utilisation stood at 96% during the quarter, compared with 99% recorded in Q2 FY2026.
- Consolidated cash and cash equivalents, including treasury investments, totaled Rs 4,101 crore as of September 30, 2026.
- Total gross debt remained modest at Rs 274 crore, leaving the company with a sizable net cash reserve of Rs 3,827 crore.
Industrial Operations and Strategic Outlook
Graphite electrodes are critical consumable inputs used in electric arc furnaces (EAF) to melt steel scrap. Beyond its core graphite electrode manufacturing, Graphite India operates backward-integrated facilities producing calcined petroleum coke and runs the Powmex Steels Division, which manufactures high-speed steel and alloy steel. The company also maintains captive power generation assets, comprising 23 megawatts (MW) of hydroelectric capacity, 18.9 MW of wind capacity, and 13.8 megawatt-peak (MWp) of solar generation.
For domestic investors, Graphite India's substantial cash cushion and competitive duty positioning relative to domestic and Chinese peers provide key buffers against global trade uncertainties as final rulings from the US Department of Commerce and the US International Trade Commission are awaited.
