Shares of carbon black maker PCBL (formerly Philips Carbon Black) slipped around 8 per cent in Thursday’s trade after reporting a nearly 5 per cent decline in second-quarter (Q2) profit. The company posted a 4.9 per cent fall in Q2, as higher costs offset robust sales of the tyre strengthening material.
A spike in crude oil prices due to the ongoing Russia-Ukraine war and accompanying inflationary pressures have resulted in increased costs of production for carbon black.
The PCBL stock tanked 7.93 per cent to trade at Rs 129.50 in late deals. During the day, it touched a low of Rs 129.
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Considering today’s intraday low, the company’s shares traded 16 per cent lower from their September high of Rs 153.75, and 44 per cent higher from their February low of Rs 89.03. PBCL shares surged 7.52 per cent so far this year.
PCBL’s profit fell to Rs 116 crore in the quarter that ended September 30 from Rs 122 crore a year earlier. Overall revenue rose 52.4 per cent to Rs 1,628 crore, driven by a 52.2 per cent jump in sales of carbon black, which is also used in speciality and performance chemicals.
However, a 61.3 per cent rise in total expenses, driven by a 75.4 per cent jump in the cost of materials consumed, weighed on profits.
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B&K Securities has a ‘Buy’ rating on the stock with a “target price of Rs 251 (based on 15.0 times FY25E).” The brokerage expected that the stock “can deliver around 35 per cent CAGR (Compounded annual growth rate) return.”
Meanwhile, the import of tyres in the country has been declining for the past few years. Tyre exports from India reached an all-time high level, rising by around 68.1 per cent on a yearly basis, B&K Securities added.