Half-year Financial Report to 30 September 2025

Tirupati Graphite plc (TGR.L) has released its unaudited half-year results for the period ending 30 September 2025, marking a pivotal moment in its ongoing turnaround strategy. The company reported a production total of 2,204 metric tonnes (MTs) of flake graphite from its Vatomina project in Madagascar, despite facing intermittent operational challenges due to adverse weather and other issues. The Sahamamy project remains on care and maintenance, with no production reported during this period. Financially, Tirupati recorded an operating loss of £2.7 million, alongside administrative expenses of £1.8 million, concluding the half-year with a cash balance of £0.16 million. The company has raised £4.5 million through convertible loan notes in May 2025 and an additional £0.3 million in September 2025, with further financing commitments of £3.1 million announced subsequently. This financial maneuvering is crucial as it aims to lift the suspension of its share trading on the London Stock Exchange (LSE), which has been in place since July 2024 due to governance and liquidity issues.

The half-year results reflect a significant improvement in production compared to the previous year, where only 838 MTs were produced. The production peak for the reporting period reached 517 MTs in April 2025, indicating a recovery trajectory since operations resumed in February 2025. However, the company has acknowledged that production at Vatomina has not been consistent, necessitating a program of further improvements and upgrades. The relocation of plant and equipment from the Sahamamy project to Vatomina aims to enhance production capacity, with a target of reaching 1,500 MTs of graphite per month, contingent on obtaining necessary consents. The operational challenges at Vatomina, particularly the variable ore quality from the BK6 mine area, underscore the need for a robust drilling campaign to better understand the ore body and develop a more effective mine plan.

From a financial perspective, Tirupati's reported operating loss of £2.7 million is concerning, especially given the limited cash balance of £0.16 million at the end of the reporting period. The company’s administrative expenses have remained high, and the ongoing operational issues at Vatomina have prevented the achievement of production targets. The additional financing commitments of £3.1 million are critical to sustaining operations and funding the necessary improvements. However, the cash balance suggests a precarious funding runway, potentially limiting operational flexibility unless further capital is secured promptly. The reliance on convertible loan notes introduces dilution risk, particularly as the company prepares for a conditional share placing to raise further funds.

In terms of valuation, Tirupati Graphite's current market capitalisation is approximately £20 million, placing it in the AIM micro-cap tier. When assessing its valuation metrics against direct peers, it is essential to focus on companies engaged in flake graphite production and within a similar market cap range. Direct peers include AIM-listed companies such as Syrah Resources (SYR.AX), which has a market cap of approximately £25 million, and Talga Group (TLG.AX), which is similarly sized. These companies provide a comparative framework for evaluating Tirupati's performance. For instance, Syrah Resources has reported an average sales price of $1,000 per MT for its graphite, which is significantly higher than Tirupati's average of $846 per MT. This price differential highlights potential revenue improvement opportunities for Tirupati if it can enhance its production quality and operational efficiency.

The execution track record of Tirupati Graphite has been mixed, with prior operational disruptions impacting production levels and financial performance. The company has faced governance challenges, particularly following the termination of its previous CEO, which contributed to a significant delay in financial reporting and operational planning. The recent publication of interim financial statements is a positive step towards restoring investor confidence and compliance with regulatory requirements. However, the need for further improvements at Vatomina and the ongoing suspension of the Sahamamy project highlight the operational risks that remain. The company must navigate these challenges effectively to achieve its production targets and improve its financial standing.

One specific risk arising from this announcement is the potential for continued operational disruptions at the Vatomina project. The variable ore quality encountered during production, coupled with the need for further improvements and upgrades, poses a significant challenge to meeting production targets. Additionally, the reliance on external financing to support operational improvements raises concerns about the company's ability to maintain liquidity and operational continuity. The market will be closely monitoring Tirupati's progress in addressing these issues, particularly as it seeks to lift the suspension of its shares and restore investor confidence.

Looking ahead, the next measurable catalyst for Tirupati Graphite is the expected completion of its fundraising efforts, which are contingent on the approval of the draft Prospectus for the December 2025 placing. The successful completion of this fundraising will be crucial for the company to resume operations at Vatomina and implement the planned improvements. The timeline for this catalyst is expected to be within the next few months, as the company aims to finalize its financial restructuring and operational plans.

In conclusion, Tirupati Graphite's half-year results represent a moderate step forward in its turnaround strategy, but significant challenges remain. The operational issues at Vatomina, coupled with a precarious financial position and reliance on external funding, highlight the risks that could impact the company's recovery trajectory. While the publication of financial results is a positive development, the path to restoring operational stability and achieving production targets will require diligent execution and effective management of the identified risks. Therefore, this announcement can be classified as moderate in terms of materiality, reflecting both progress made and the challenges that lie ahead.

Key insights

• ●Tirupati produced 2,204 MTs of flake graphite in H1 2025.
• ●The company reported a £2.7 million operating loss.
• ●Further financing of £3.1 million is needed to support operations.

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