Phillips Carbon Black - Q2FY21 Company Update - ICICI Securities

Phillips Carbon Black (PCBL) reported healthy performance in Q2FY21. Net sales for the quarter were at Rs. 664 crore, down 23% YoY amid a decline in realisations (Rs. 58/kg in Q2FY21 vs. Rs. 82/kg in Q2FY20) tracking softer crude prices and 8% growth in volumes (110,397 tonne in Q2FY21 vs. Rs. 102,321 tonne in Q2FY20). EBITDA in Q2FY21 was at Rs. 105 crore with EBITDA margins at 15.9% (EBITDA/tonne at Rs. 9,550/tonne). Operating margins came in better despite inventory loss at the raw material front tracking lower overhead costs. PAT in Q2FY21 was at Rs. 58 crore.

Valuation & Outlook

PCBL has a capital efficient business model (RoE, RoCE>15%) with limited leverage on B/S and is gradually moving up the value chain through increasing share of margin accretive speciality grade carbon black. Amidst better than expected Q2FY21, we have marginally upgraded our estimates. We retain our positive stance on PCBL and assign BUY rating to the stock, valuing it at Rs. 180/share i.e. 10x P/E on FY22E EPS of Rs. 18.0/share.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PCBL_CoUpdate_Oct20.pdf

Shares of PHILLIPS CARBON BLACK LTD. was last trading in BSE at Rs.134.9 as compared to the previous close of Rs. 131. The total number of shares traded during the day was 290465 in over 5559 trades.

The stock hit an intraday high of Rs. 138 and intraday low of 130.05. The net turnover during the day was Rs. 39143605.

Source : Equity Bulls

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