PCBL surges 7% on commencement of phase 1 specialty chemical capacity

Shares of PCBL (erstwhile Phillips Carbon Black) hit a 52-week high of Rs 174.55, as they rallied 7 per cent on the BSE in Tuesday’s intra-day trade after the company announced commissioning phase 1 i.e. 20,000 metric tons per annum (MTPA) of it brownfield speciality carbon black (CB) expansion at its Mundra Plant in Gujarat.

Upon completion, PCBL will have a specialty chemicals production capacity of 40,000 MTPA at its Mundra plant. This enhanced capacity will enable PCBL to meet the growing demands of its existing customers, enhance customer serviceability and also explore new opportunities, the company said in an exchange filing.

PCBL further said that, with a robust customer base spanning across the globe, the company has emerged as one of the key players in the industry, providing cutting edge solutions to over 1000 customers worldwide.

PCBL is engaged in the manufacturing and sale of CB, which is mainly used in tyre and other rubber pro ducts. The company also produces specialty CB which are used as pigmenting, UV stabilising and conductive agents in a variety of co mmon and specialty products, including plastics, printing & packaging and coatings.

With a large proportion of CB sales being made to tyre companies (around 70 per cent in FY23) where the pricing is formula driven and linked to movement in raw material prices, the company has been able to pass on the increase in input p rices to a large extent. Furthermore, the increase in the sales of specialty CB, which is a value-added product and commands higher margin has contributed to the increase in the spread.

PCBL is likely to maintain its dominant market position which coupled with favourable demand scenario shall enable it to sustain its healthy business risk profile over the medium term. Furthermore, the financial risk profile is expected to remain strong amidst healthy cash flow generation from operations and the ongoing capex is not expected to result in major deterioration in the credit risk profile over the medium term, CARE Ratings said in rationale.