Brokerages bullish on this chemical stock post Q4 results, raise target price
Premium- Brokerage firm ICICI Securities has increased the chemical's stock target price with Buy recommendation
PCBL’s (Phillips Carbon Black) Q4FY22 EBITDA disappointed on higher other expenses, but gross profit/kg improved QoQ which is good, hoig. 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, highlighted brokerage house ICICI Securities.
The brokerage expects it to announce more capacity expansion in rubber carbon black if demand from exports markets sustains, which should increase volume growth visibility. We have increased our EPS estimates by 10-15% over FY23- 24E on better volumes and spreads assumptions. ICICI Securities has increased its target price to ₹170 apiece (from ₹147) with Buy tag.
With strong capacity expansion plan, PCBL remains well-poised to deliver double digit volume growth in the coming three years. Also, PCBL continues to focus on improving its operating efficiencies and enriching its product mix, said another brokerage IDBI Capital. The brokerage has a Buy rating on the chemical stock with a target price of ₹154.
"Going ahead, we expect its margins to improve from current level led by rising share of specialty volumes. We expect company’s EBITDA/PAT to grow at a compound annual growth rate (CAGR) of 13%/11% over FY22-24E led by improvement in product mix and higher volumes," IDBI Capital said in a note.
Further, the chemical manufacturer will be investing in R&D to launch customized premium products which will enable to gain market share in both rubber and specialty black applications.
PCBL, a part of RP-Sanjiv Goenka Group, is the among the largest carbon black manufacturer in India.
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.