Phillips Carbon Black can touch Rs 200: Tulsian

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Phillips Carbon Black can touch Rs 200: Tulsian

Phillips Carbon Black can move to Rs 200 in next one year, says Investment Advisor, SP Tulsian.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Phillips Carbon See messages about Phillips Carbon

Phillips Carbon Black can move to Rs 200 in next one year, says Investment Advisor, SP Tulsian.

Tulsian told CNBC-TV18, "Phillips Carbon Black is RPG Group Company and recently in the last 6-8 months they have completed their expansion at Mundra. In the first phase they created capacity of 90,000 tonne. In the second capacity which went operational from April 1, 2011 they have added another 50,000 tones at Mundra. So the total aggregate capacity is 1,40,000 tones at Mundra alone. But if you take the overall capacity of the carbon black with the company it is 4,10,000 tonne with matching power generation capacity, in fact surplus power generation capacity with total capacity being at 76 MW."

He further added, "Looking at the financial performance for FY11 that has been quite good with topline of close to Rs 1700 crore and EPS of close to Rs 35. But the new capacity got commissioned in Mundra in the last three months or so, the reflection of that has seen in the Q1 results of FY12, where the topline has improved by 30%."

"The EPS for the quarter alone has been at Rs 12.50 while cash EPS has been at Rs 17.50. So if one extrapolates the same, which I don't see any reason in spite of observing the higher interest rate and depreciation of the new plant, the company should be able to post an EPS of close to Rs 50 for the current year and with cash EPS of close to about Rs 70 and that translates share ruling at PE multiple of less than 3 on a net EPS basis and less than 2 on cash EPS basis."

"The share which is now ruling at Rs 137, in fact I am expecting that it can move to about Rs 200 in next one year 
because of the good realisation for the carbon black; company being the largest exporter from the country and in fact one of the largest exporters from Asia. So taking that into consideration, I think the share has potential to move to Rs 200 in next one year. But even for those with a short-term view maybe in 4-6 months time the share should be able to move at a level of Rs 165-170."