PCBL Chemical Ltd. share price target

...

PCBL’s Q4FY22 EBITDA disappointed on higher other expenses, but gross profit/kg improved QoQ which is good. PCBL’s management sounded bullish on the carbon black cycle with favourable demand supply, and anticipates an upside risk to both volumes and spreads in the coming period.

PCBL had fixed April 12, 2022 as the record date for stock split in the ratio of 1:2 i.e. one existing share of face value | 2 gets sub-divided into two shares of FV | 1 each. The ex-date for stock spilt is April 11, 2022 On the ex-date i.e. starting today (April 11, 2022), the stock price will adjust for stock split ratio and is expected to trade at | 120/share i.e. half the closing...

We initiate coverage on PCBL with a BUY rating and target price of Rs300, valuing the stock at 12x FY24E PE. PCBL has recalibrated after challenging times till FY14. It is strengthening its business model; re-innovated with an emphasis on R&D, and is seeing structural tailwind from reduced China concern.

Net sales for Q2FY22 were at | 1067.6 crore with carbon black sales volume at ~116 KT, up 7% QoQ and consequent EBITDA/tonne at ~| 16,150 Consequent PAT in Q2FY22 was at | 121.5 crore, up 16.5% QoQ...

Net sales for Q1FY22 were at | 1004 crore with carbon black sales volume at 109 KT, down 3% QoQ and consequent EBITDA/tonne at ~| 15,000 Consequent PAT in Q1FY22 was at | 104 crore, down 18% QoQ...

As per industry estimates, as of FY20, domestic effective capacity of carbon black is pegged at ~11 lakh tonne with domestic consumption pegged at ~9.5 lakh tonne, thereby implying industry operating at ~85%+ utilisation levels. On the import-export front, carbon black exports in FY20 were at ~1.4 lakh tonne, with imports at ~1.9 lakh tonne, implying net imports of ~0.5 lakh tonne. Going forward, carbon black demand is expected to grow to ~11.5-12 lakh tonne by FY23E, implying incremental demand of ~2-2.5 lakh tonne. With ~1 lakh tonne of surplus capacity being put up by PCBL's...