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Should I buy Tirupati Graphite shares?

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Tirupati Graphite (LSE:TGR) is a green economy business with potential upside. It’s a flake graphite company manufacturing speciality graphite and graphene. And Tirupati has recently developed a ground-breaking graphene-aluminium (Al-Gr) composite. This could be a game-changer in replacing copper in advancing technology.

A revolutionary product

Tirupati Graphite mines and processes natural flake graphite in Madagascar and conducts hi-tech graphite processing in India. Its operation in India is focusing on manufacturing zero-chemical graphene. Best of all, Al-Gr Composite is a scalable solution that could revolutionise manufacturing.

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The company already makes money mining for graphite in Madagascar, but this new Al-Gr Composite invention has investors really excited.

That’s because Tirupati has reportedly been in talks with FTSE 100 company Rolls-Royce (LSE:RR). Tirupati’s Al-Gr Composite could replace the copper in thermal, power, and propulsion systems, ensuring lighter-weight aircraft. Less weight leads to increased fuel efficiency, which saves the company money. So, it could potentially appeal to many aircraft manufacturers.

Reducing weight in tech is a common goal, and if workable, this Al-Gr Composite could find demand coming from many industries desperate to reduce their carbon footprint. For instance, electric vehicles, aerospace, space, shipping, and satellite technologies. In fact, pretty much anything that uses copper wires and cables in motors.

The Al-Gr Composite is also more efficient at increasing conductivity, both thermal and electrical. Therefore, it can be used in heat exchangers, heat sinks, and even solar water heaters.

In fact, Shishir Poddar, CEO of Tirupati Graphite, referenced a recent McKinsey report stating graphene can make batteries and solar cells significantly more efficient.

Rising share price

Tirupati Graphite launched on the London Stock Exchange via IPO in December. Since then, its share price has risen 152%. It now has a £113m market cap. However, there’s no doubt this share carries risk. It’s new to the public markets, it operates in emerging market jurisdictions, and it’s making a product that’s yet to prove itself.

Nevertheless, the company has high hopes with its sights set on increasing its Madagascan capacity to 30,000 tpa by Q1 2022, up from 3,000 tpa at IPO.

The Tirupati share price has already risen sharply in the past week, so it may be in for extreme volatility in the weeks ahead. However, as a speculative investment, I’m tempted to get on board and add Tirupati Graphite shares to my Stocks and Shares ISA. I think anything offering a clear solution in the shift to a green economy shows massive potential and makes for an attractive investment opportunity.

Tirupati in talks with Rolls-Royce

Another key question now is: does this news make Rolls-Royce any more attractive as a long-term investment? Rolls-Royce has racked up an eye-watering level of debt since the pandemic hit. Its market cap is approaching £9bn while its debt is almost £7.5bn. Therefore, I think any way it can find to reduce costs will be warmly welcomed.

The Rolls-Royce share price has been extremely volatile, and its future uncertain. That still stands, although its outlook very much depends on economies reopening and flights resuming.

I think Rolls-Royce will survive, and it has been streamlining in recent months. If it can stay on target to reduce costs and resume generating revenue, its share price could soar again. As a result, I’m tempted to gradually buy shares in Rolls-Royce with a long time horizon in mind.

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Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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