Carbon black is an essential ingredient for manufacturing tyres and forms around 26 percent of tyre by weight.
Shares of Phillips Carbon Black (PCBL) rallied 7.7 percent intraday on March 2 after ICICI Direct gave a bullish view on the stock, citing healthy cash flow from operating activities (CFO) generation.
PCBL is a leading carbon black player with a healthy balance sheet and capital-efficient business model, said the brokerage.
It has a buy ration on the scrip with a target price of Rs 140.
"We drive great comfort from healthy CFO generation at PCBL with the present CFO yield over 20 percent," it said.
Phillips Carbon Black reported a steady Q3FY20 performance. Total carbon black (CB) sales volume came in at 98,500 tonne, down 3.4 percent YoY. In terms of volume mix, domestic carbon black sales volume was at 71,000 tonne (down 9.2 percent YoY) while export sales volume came in at 27,500 tonne (up 16.1 percent YoY).
Consequently, net sales in Q3FY20 were at Rs 769 crore. EBITDA was at Rs 120 crore with attendant EBITDA margins at 15.6 percent. Ensuing PAT in Q3FY20 was at Rs 70 crore.
Carbon black realisations for the quarter were at Rs 76 per kg while EBITDA per tonne was at Rs 12,203 /tonne.
PCBL also declared an interim dividend of Rs 7 per share including a special dividend of Rs 3.5 per share.
The stock ended at Rs 103.90, down 2.2 percent.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decision