ICICI Direct has recommended buy rating on Phillips Carbon Black with a target price of Rs 1030 in its research report dated 05 September 2017.
ICICI Direct's research report on Phillips Carbon Black
Phillips Carbon Black (PCBL) is the largest manufacturer of carbon black (CB) domestically with market share in excess of 30%. C B is used as a reinforcement material in manufacturing tyres thereby catapulting PCBL as a proxy to play on domestic automobile sector PCBL is witnessing robust demand of its product profile and is running at peak capacity u tilisation levels (in excess of 90%) It has successfully turned around its operations through operational efficiencies (high u tilis ation levels), controlled raw material costs and savings accrued through captive power plants.
OutlookWe retain our BUY rating on the stock. We now value PCBL at Rs103 0 i.e. 1 5 .0 x P/E on FY 19E of Rs68.8.
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