Graphite India Q3 Results: Swings to ₹68 Crore Profit in FY26

Introduction to Graphite India's Q3 Performance

Graphite India Limited has announced a significant financial turnaround in the third quarter of the fiscal year 2025-26. The company reported a consolidated net profit of ₹68 crore for the quarter ending December 31, 2025. This marks a substantial recovery from the same period in the previous fiscal year, when the company had recorded a net loss of ₹20 crore. The positive results were driven by robust revenue growth and improved operational efficiencies, signaling a potential shift in momentum for the graphite electrode manufacturer. Following the announcement, the company's shares saw a modest increase of 2%.

Detailed Quarterly Financial Analysis

The company's consolidated revenue from operations for Q3 FY26 stood at ₹642 crore, a notable increase of 22.8% compared to the corresponding quarter of the previous year. This growth in the top line was a key factor in reversing the previous year's loss. On a standalone basis, the performance was even more pronounced. Standalone net profit surged to ₹100 crore, a remarkable 3,233% increase from the ₹3 crore profit reported in Q3 FY25. Standalone revenue from operations grew by 34.04% year-on-year to ₹643 crore. A significant contributor to the standalone profit was 'other income', which rose to ₹107 crore from just ₹15 crore in the prior-year period.

Contrasting Nine-Month Performance

While the third-quarter results were strong, the financial picture for the first nine months of FY26 presents a more mixed view. For the nine-month period ending December 31, 2025, the consolidated net profit saw a sharp decline of 32.52% year-on-year, falling to ₹276 crore from ₹409 crore. This decline occurred despite a 7.50% increase in consolidated revenue to ₹2,036 crore over the same period. Similarly, the standalone net profit for the nine-month period decreased by 13.59% to ₹337 crore. This divergence between the strong quarterly performance and the weaker nine-month results suggests that underlying margin pressures and challenges persisted through the earlier part of the fiscal year.

Operational Highlights and Segment Contribution

The primary driver of the company's business, the Graphite and Carbon segment, showed a significant improvement. This segment reported a profit of ₹65 crore for the quarter, a strong recovery from the loss it incurred in the same quarter of the previous year. The segment contributed ₹566 crore to the quarterly revenue. The Steel segment also added to the top line, generating ₹64 crore in revenue. This performance underscores the company's reliance on its core graphite business and its ability to capitalize on improved market conditions within that sector during the third quarter.

Market Headwinds and Inventory Write-Downs

Despite the positive quarterly profit, Graphite India is navigating a challenging market environment. The company acknowledged inventory write-downs amounting to ₹77 crore on a consolidated basis due to falling electrode prices. This indicates persistent headwinds in the global market that could impact future profitability and margins. Such write-downs reflect the volatility in the industry and the pressure on product pricing. These factors temper the optimism generated by the strong quarterly profit figure and highlight ongoing risks.

Regulatory and Compliance Factors

During the quarter, the company accounted for an exceptional charge of ₹27 crore. This charge is related to the implementation of new labor codes notified by the Government of India, which consolidate numerous existing labor laws. Additionally, Graphite India has pending appeals concerning Income Tax assessment orders for previous assessment years. While the company has received refunds in the past, it has not recognized any potential gains from favorable outcomes in its current financial statements, pending final resolution of these matters.

Outlook and Investor Perspective

In its latest financial announcement, the management of Graphite India did not provide any forward-looking guidance or an outlook for the upcoming quarters. This absence of guidance, combined with the contrasting nine-month performance and the noted inventory write-downs, creates a degree of uncertainty for investors. The market will be closely monitoring whether the company can sustain the profitability demonstrated in Q3 into the final quarter of the fiscal year. Key factors to watch include the trajectory of graphite electrode prices, management of raw material costs, and any developments related to the pending tax appeals.

Conclusion

Graphite India's third-quarter results for FY26 demonstrate a commendable return to profitability, driven by strong revenue growth and operational improvements in its core segment. However, this positive development is set against a backdrop of a weaker nine-month performance and persistent market challenges, including price pressures that led to inventory write-downs. Without official guidance from the management, investors are left to weigh the strong quarterly rebound against the broader market uncertainties and historical performance for a complete picture of the company's financial health.