PCBL, Firstsource zoom 10% to record highs on Sanjiv Goenka's bullish commentary

Shares of PCBL Ltd. and Firstsource Solutions Ltd., both part of the RP Sanjiv Goenka Group, surged another 10% on Thursday, continuing their recent upward trend.

Shares of PCBL jumped over 10 percent to hit a fresh record high of Rs 359.80 on the National Stock Exchange (NSE) on account of Chairman Sanjiv Goenka's bullish projections for the RPSG Group's carbon black play.

Shares of another group company Firstsource Solutions also surged up to 12 percent, scaling a record peak of Rs 309.30 per share.

The projections of over five-fold growth in the bottom line over five years are expected to take PCBL's profit to the range of Rs 2,400-2,500 crore.

The business margins are projected to go from the current 14 percent to 17-18 percent as the share of speciality business rises, Sanjiv Goenka said in an interview with CNBC-TV18.

"We will grow in the rubber black business, and importantly in specialty blacks where margins are higher," Sanjiv Goenka had said, adding that he sees the bottomline multiplying in the next five years. "We see a 5x growth in profit over five years from this level", he said.

This projected migration from a commodity play into a specialty chemicals company has evoked strong market interest in the shares of PCBL.

"The rising demand for specialty chemicals has prompted major manufacturers to bolster their production capacities and transition their production lines from standard carbon black to specialty variants," PCBL told shareholders in its 2023 annual report.

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Speaking about Firstsource, Goenka said the next three years should see the company's profit increase by 2.5x. Firstsource is moving towards high-margin businesses and the focus is on lowering costs as well, he said, adding that the company is currently in the process of completing an acquisition and is targeting three deal wins a quarter.

PCBL stock has gained over 19 percent over the last five trading sessions, while Firstsource Solutions has rallied up to 22 percent. Both stocks are trading at their respective record highs.

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