Buy Phillips Carbon Black; target of Rs 170: SPA Research

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Buy Phillips Carbon Black; target of Rs 170: SPA Research

SPA Research is bullish on Phillips Carbon Black and has recommended buy rating on the stock with a target price of Rs 170 in its February 09, 2012 research report.

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RELATED NEWS Buy Adhunik Metaliks; target of Rs 93: Motilal Oswal Hold Hindustan Unilever; target of Rs 429: R K Global Sell DLF; target of Rs 209: KRChoksey ALSO READ See previous views by SPA Research See what other Experts & Brokerages are saying about Phillips Carbon See messages about Phillips Carbon Phillips Carbon BSE | NSE 31/05/12 Are Mutual Funds betting on Phillips Carbon?

SPA Research is bullish on Phillips Carbon Black and has recommended buy rating on the stock with a target price of Rs 170 in its February 09, 2012 research report.

"PCBL has yet again reported a bad quarter on account of lower off-takes from tyre sector, slowdown in passenger cars segment and cheap imports. EBITDA Margin squeezed off by 585 bps YoY on account of higher input costs but improved by 61 bps QoQ, led by improvement in realizations and lower base of sequential quarter. We maintain our "BUY" recommendation with a revised target price of INR 170."

"In Q3FY12, net sales stood at INR 5149 mn, up by 19.2% YoY & down by 8.7% QoQ. PAT at INR 196 mn was down by 34.6% YoY & 5.7% QoQ. In 9MFY12, net sales stood at INR 16464 mn, up by 31.5% YoY & profits at INR 821 mn was down by 1.12% YoY. Revenue from carbon black (CB) segment contributing ~96% to revenues stood at INR 4932 mn, up by 18.5% YoY & down by 8.9% QoQ. Revenue from power segment contributing ~4% to revenue stood at INR 212 mn, up by 36.6% YoY & 16.8% QoQ. EBIT margin in CB segment stood at 6.1%, down by 470 bps YoY & up by 160 bps QoQ."

"We have revised our estimates for FY12E & FY13E to incorporate improved realizations on account of higher raw material cost pressure & have lowered our volumes estimate in view of lower demand from the end industries. We have increased our top-line estimate by 5.9% in FY12E & by 7.0% in FY13E and have lowered our profit estimates by 17.9% in FY12E & 14.7% in FY13E. We maintain our "BUY" recommendation with a revised target of INR 170 in 15 months at 4XFY13E EV/EBITDA," says SPA Research report.

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To read the full report click on the attachment