Phillips Carbon Black - Q3FY21 First Cut - ICICI Direct

(CMP: Rs. 190 MCap: Rs. 3,278 crore)

Phillips Carbon Black reported robust performance in Q3FY21. EBITDA margins for the quarter came in at an all-time high 24.5%, supported by higher share of speciality grade carbon black as well as inventory gains amid benign crude prices in preceding quarter and robust carbon black demand domestically.

Q3FY21 Earnings Summary

- Net sales for the quarter stood at Rs. 769 crore, flat YoY. Carbon black sales volume came in quarterly highest at 114,525 tonne (up 16% YoY) with corresponding realisations at ₹ 65/kg

- EBITDA in Q3FY21 stood at Rs. 188 crore with corresponding EBITDA margins at 24.5%, up 860 bps QoQ. EBITDA margins came in substantially higher primarily tracking low RM costs which for the quarter stood at 55.8% vs. the usual trend of ~65% levels. EBITDA/tonne for the quarter stood at ₹ 16,446/tonne (eight quarter high)

- PAT for the quarter came in at Rs. 125 crore (highest ever quarterly PAT), up 80% YoY, with effective tax rate for the quarter at 19%.

- The company declared an interim dividend of ₹ 7/share (~4% dividend yield at CMP) for fiscal year FY21E with record date for the same as February 2, 2021.

With CV cycle on the cusp of cyclical recovery domestically, we hold a positive view on the company amidst robust demand prospects at its user industry i.e. Tyre. The company possess healthy return ratios matrix (RoCE>15%) and realises robust cash flow from operations (CFO yield>12%) with strong B/S (Debt: Equity 0.4x).

Shares of PHILLIPS CARBON BLACK LTD. was last trading in BSE at Rs.190.2 as compared to the previous close of Rs. 188.05. The total number of shares traded during the day was 295309 in over 3528 trades.

The stock hit an intraday high of Rs. 194.4 and intraday low of 185.6. The net turnover during the day was Rs. 56352298.

Source : Equity Bulls

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