Moneycontrol

Budget 2021

Associate Partners:

  • SMC
  • Samsung
  • Volvo

Moneycontrol

Budget 2021

Associate Partners:

  • SMCSamsungVolvo
Webinar :Join an expert panel for a webinar on Smart investments for a secure retirement January 28, 2021. Register now!

Buy Phillips Carbon Black; target of Rs 210 : ICICI Direct

ICICI Direct is bullish on Phillips Carbon Black recommended buy rating on the stock with a target price of Rs 210 in its research report dated January 06, 2021.

January 14, 2021 / 08:52 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

ICICI Direct's research report on Phillips Carbon Black


In a recent notification, the Ministry of Finance has denied extension of anti-dumping duty (ADD) on imports of carbon black (used for rubber application) into India largely from China & Russia. It is amid the Commerce Ministry proposing an extension of ADD. This comes as a negative surprise to us but does not change any business dynamics for the domestic carbon black players, as of now, including industry leader Phillips Carbon Black (PCBL). As highlighted in our recent report (dated December 28, 2020), extension of ADD just ensures better volume offtake for carbon black players and by no means implies better pricing or profitability. We remain confident of better sales volume prospects and profitability at PCBL, reiterating our positive stance on the company.


Outlook


However, with fundamental demand levers at play, we remain positive on PCBL and maintain our BUY rating with an unchanged target price of Rs 210 valuing it at 10x P/E on FY23E EPS. Sensing the robust demand, PCBL is in the midst of setting up a greenfield plant of 150 KT capacity (capex of ~Rs 600 crore) and is awaiting regulatory approval for the same. Healthy return ratios matrix (RoCE>15%) and robust cash flow from operations (CFO yield>15%) provide good margin of safety.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jan 7, 2021 01:02 pm

stay updated

Get Daily News on your Browser
Sections