PCBL shares have gone up over 35% in the past three months, but analysts at ICICI Securities and IDBI Capital see further upside impressed by the company’s earnings in the June quarter.
The PCBL Analysts: Analysts at IDBI Capital maintained their ‘buy’ rating on the stock raising the price target to ₹215 from ₹152.
The Sanjesh Jain-led analyst team at ICICI Securities also maintained their ‘buy’ rating on the stock with a price target of ₹200 – indicating an over 25% upside from the stock’s last closing price of ₹157.85.
The PCBL Thesis: Analysts at IDBI Capital said that the company sales for the April-June period missed its estimates. The company’s net sales came in at ₹1,279 crore while IDBI estimates were around ₹1487 crore. However, the analysts highlighted that the company’s gross profit/tonne increased 11% QoQ to ₹32,345/tonne amidst higher volumes.
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ICICI Securities said that the company’s Carbon Black segment registered healthy sales during the quarter. PCBL experienced volume growth of 12.5% year-over-year in carbon black. Analysts pointed out that the growth was primarily driven by a significant increase of 22.6% in export volumes, highlighting the favourable market opportunities overseas. Additionally, the company also achieved steady volume growth of 6.7% in the domestic market.
The analysts further added that the company expects to grow its exports further as Europe / US looking to source more carbon black volumes from China / India amid muted capacity addition in Russia, Europe and US. “PCBL anticipates capacity addition of 80-100ktpa over the next few years to meet the growing demand,” the analysts added in their latest note.
IDBI Capitals also noted that the company continues to focus on ramping up its newly set up 150 kt plant, improving its operating efficiencies and enriching its product mix. “Going ahead, we expect its margins to improve from the current level led by the rising share of speciality volumes,” IDBI Capital said in the earnings review note.
Price Action: PCBL’s share price was up 1.71% to trade at ₹160.55 in the early hours of trading on Monday.
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