 "PCBL tanks 11%, hits 5-month low on disappointing December quarter results")
Shares of PCBL Chemical hit a five-month low of Rs 346.90, falling 11 per cent on the BSE in Monday’s intra-day trade after the company reported a disappointing December quarter (Q3FY25) earnings, due to an adverse product mix, maintenance of a power plant for 50 days and higher one time employee bonus provisioning.
At 09:43 am, PCBL was quoting 8.5 per cent lower at Rs 357.80, as compared to the 0.88 per cent decline in the BSE Sensex. The stock of the carbon black (that is used in making products such as tyres) manufacturer is trading at its lowest level since August 2024. With today’s fall, the market price of PCBL has corrected 41 per cent from its 52-week high of Rs 584.50, touched on September 30, 2024.
In Q3, the company’s consolidated earnings before interest, tax, depreciation and amortisation (Ebitda) declined 11.1 per cent quarter-on-quarter (QoQ) to Rs 328 crore. PCBL's reported Ebitda margin contracted 100bps QoQ and year-on-year (YoY) to 16 per cent. Its consolidated profit after tax was down 24.4 per cent QoQ and 37 per cent YoY at Rs 93 crore, while its consolidated revenues declined 7.07 per cent QoQ to Rs 2,010 crore.
The company's carbon black volumes stood at 1,43,500 tonnes, down 3.5 per cent QoQ due to a 16 per cent QoQ decline in volumes of the speciality segment on account of client level destocking.
On future outlook, PCBL said it plans to reach 1 million MTPA carbon black capacity within the next two-three years.
The Indian tyre industry is expected to maintain the growth momentum driven by strong domestic demand and potential for higher export volumes. The demand for speciality products continues to be resilient. The end demand of carbon black from masterbatch, paints, inks and fibre maintained a stable trajectory. The company is expecting significant growth in international sales volume to European markets, PCBL said in its Q3 investor update.
ICICI Securities believes the long term story of PCBL to transform into a specialty chemical company is on track. The scaling up of the nano silica business from FY27 onwards, and the continuous improvement and expansion at Aquapharm will lead to a strong transformation of the DNA of the company coupled with solid cash flows coming in from the carbon black business, it noted. Though the company's stock might react negatively on a weak quarter, the same must be used as an opportunity to capitalise on the growth trajectory of the company, the brokerage firm said in a note.