Shares of PCBL nosedived over 11 percent on January 13 as investors dumped the stock after the company's dismal Q3 earnings, marked by a decline in net profit.
At 11.20 am, shares of PCBL were trading at Rs 365 on the NSE, though still deep into losses but sharply off its day's low of Rs 346.60.
The company's net profit dropped 37 percent on year to Rs 93 crore in the October-December quarter, sharply lower than the Rs 148 crore that it clocked in the same period last year. The decline in the company's bottomline was largely driven by a spike in operating costs.
Total expenses for the quarter surged 23 percent on year to Rs 1,693 crore while finance cost skyrocketed 254 percent to Rs 117 crore and employee benefit expenses surged nearly twofold to Rs 105 crore.
On the other hand, revenue grew over 21 percent on year to Rs 2,010 crore. However, rise in operating expenses also put pressure on EBITDA margin which contracted to 16 percent in Q3, down from 17 percent in the same quarter last fiscal.
Brokerage firm JM Financial highlighted that the weaker operational performance also lagged the firm's estimates, with a sequential dip in carbon black volumes mainly due to lower specialty black volumes. This was due to destocking at the customers end caused by elevated inventory
levels.
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On that account, JM Financial expects PCBL's carbon black volumes to register a CAGR of ~7 percent over FY25-27, lower than earlier estimates of 10 percent. JM Financial also lowered its FY25-27 EBITDA and EPS estimates by 7-12 percent and 17-20 percent, respectively, factoring in the Q3 earnings and management commentary.
Though the brokerage views the current stock valuations of PCBL as attractive, it still slashed its price target for the stock by over 19 percent to Rs 500 after the dismal earnings show. However, JM Financial retained its 'buy' call on the stock.
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