ICICI Direct's research report on PCBL
PCBL Ltd (name changed from Phillips Carbon Black) is the leading manufacturer of carbon black, which is used as a reinforcing material in tyres. • PCBL also derives ~8% of sales volume from speciality carbon black, which fetches high margins and finds application in paints, plastics among others • It has a healthy margin profile (15%+), a capital efficient business model (RoCE>15%) with limited leverage on b/s (~0.3x debt: equity as of FY21).
We maintain our positive view and retain BUY rating on the stock. Introducing FY24E, we roll over our valuations and now value PCBL at unchanged target price Rs 320 i.e. 12x P/E on FY23E-24E avg. EPS.