Here is my two cents on possibly trying to arrive at some sort of fair value for Graphite India using comparable.
Graftech is about to get listed on the NYSE starting 19th april. In the prospectus as part of the forward looking statement, they estimate first quarter which is Jan-March 2018 ebitda to be 275 million dollars with a 43000-44000 tonnage of volume. Quarterly volume for Graphite India should be 22500 assuming 92 per utilisation for the entire year. Graftech’s revenue per tonne as they estimate is 10250 dollars per tonne as they sold most of their capacity as long 3-5 year contracted rates of 9800-10000 dollars a tonne. It is safe to assume Graphite’s per tonne revenue will be a bit higher they have booked more aggressively.
On the other hand, Graftech’s captive needle coke lends them to a lower cost of goods sold. They have pencilled in 2600 dollars per tonne of needle coke cost for the 1st quarter.
Assuming these two counter forces, it will be safe to extrapolate a similar revenue/absoute ebitda profile for Graphite India.
44000 tonnes - 275 million dollars
22500 - approx 140 million dollars
If we annualise these numbers for just fy19, we get a ebitda of 560 million dollars for Graphite India.
Graftech at the mid range of its ipo price is asking for a 7.5x ev/ebitda. Giving a 25 per discount to the indian players since they are not backward integrated,
target ev for graphite india comes to around 560 * 5.5 = 3.1 biillion dollars.
Target market cap of 3.2 billion dollars because they have 100 million dollars net cash.
That still gives us a target price of 50 % higher than the cmp.
Ofcourse this is just a very simplistic way of trying to arrive at a fair value. Key will be how sustainable these sort of spreads are. These numbers would entail a gross spread of 8000 dollars a tonne. If the market is confident that 8000 gross spread is achievable for atleast 2-3 years, slowly and steadily it can possibly trade at 5.5x ev/ ebitda.