Stocktwits - Shares of HEG (NSE:HEGL) and Graphite India (NSE:GRPH), two of India’s largest graphite electrode manufacturers, surged as much as 13% on Monday.
This comes after Japanese firm Resonac Holdings, a leading global producer of graphite electrodes, announced the closure of its production units in China and Malaysia, citing overcapacity and pricing pressure.
The closures, effective May 15, impacted nearly one-third of Resonac’s total production capacity, with the company now consolidating operations across four remaining sites in Japan, the U.S., Austria, and Spain.
Investors believe this supply cut could act as a long-term catalyst, improving margins and pushing up global prices for graphite electrodes.
SEBI-registered analyst Adarsh Nimborkar pegged HEG’s short-term target at ₹620 and long-term at ₹890, banking on favorable supply dynamics and the company’s strategic moves.
HEG is actively investing in capacity expansion and R&D, aiming to both enhance electrode quality and diversify into emerging technology applications.
The supply vacuum left by Resonac could accelerate HEG’s export orders and lift realisations in the near to medium term.
For Graphite India, Nimborkar issued bullish targets of ₹770 in the short term and ₹1,030 in the long term, citing the positive supply-demand reset and strong momentum.
In FY25, Graphite India posted revenues of ₹4,200 crore and a net profit of ₹850 crore.
The company is also taking strategic steps to diversify into specialty carbon products, alongside exploring partnerships to enhance technology and distribution capabilities, which could further improve margins and valuation multiples.
Nimborkar highlights that the graphite electrode market, already seeing tailwinds from rising electric arc furnace (EAF) steel production, now faces a meaningful global supply disruption with Resonac’s exit from key Asian markets.
This supply shrinkage could tighten global inventory levels, supporting price increases and better bargaining power for surviving players. HEG and Graphite India, with their established infrastructure and global reach, are expected to capitalize on this structural shift.
HEG shares gained 4%, while Graphite India shares are flat year-to-date (YTD).