London-listed Tirupati Graphite has successfully grown its commercial production by 49% year-on-year and its sales revenue by 70% year-on-year for the financial year ended March 31, despite working capital limitations.

Chairperson Shishir Poddar attributes the company’s strong performance to growing tailwinds supporting global graphite demand.

Total sales increased from £2.89-million in the prior financial year to £4.9-million in the reporting year, while production increased from 4 770 t in the prior year to 7 096 t in the reporting year.

Gross profit, however, decreased by 62% year-on-year to £514 846 owing to increased operating costs as a result of two concentrate units entering production simultaneously and inefficiencies caused by a lack of working capital, which led to a higher cost per ton.

The basket price of graphite sold declined by only 5% year-on-year to $828/t, despite subdued market conditions.

Tirupati has engaged a development finance institution for debt financing for the proposed expansion of the Madagascar operations from the current effective capacity of 20 000 t/y to 54 000 t/y.

The same institution has expressed an interest in providing debt funding for the first 50 000 t/y flake graphite project development at the Montepuez mine, in Mozambique.

Tirupati had cash and cash equivalents of £189 144 at the end of March after having undertaken debottlenecking initiatives.

Its total liabilities of £3.83-million compare with total current assets of £7.13-million.

The company advises that its operations remain impacted by the limited working capital availability, with operations running intermittently.

Tirupati is trying to recover £2-million that it is owed in respect of tax returns in Madagascar and Mozambique, which, should it receive this, will improve the company’s liquidity to operate its projects at a capacity of 20 000 t/y.

There is potential to increase its capacity and grades by adding two pre-concentrate units to its operations, given deficiencies have been caused by current lower feed grades of 3%.

Tirupati in the reporting year engaged with its broker, Optiva Securities, to address its working capital gap by exploring avenues to raise capital; however, no fundraise could be achieved by the brokers until December 2023.

In January, Tirupati undertook an equity placing and engaged independent financial advisers to raise funds.

The board is also focused on appointing a suitable independent nonexecutive director to the board, as well as a nonexecutive chairperson, following which Poddar would retain only the position of CEO.

The company is also in the process of recruiting a suitable CFO.