Ashish Kacholia Portfolio Stock: Up 3000% in 10 years! ICICI Securities sees further upside in this multibagger
Recently, the company posted its earnings for the first quarter of FY24. The net profit for the April-June quarter fell 15 per cent on a year-on-year basis to Rs 109 crore as against Rs 126 crore last fiscal.
- Jul 18, 2023,
- Updated Jul 18, 2023 12:02 PM IST
Shares of PCBL have delivered multibagger returns to its long-term investors as the stock has zoomed over 3,000 per cent in the last ten years. The multibagger stock has recovered over 45 per cent from its 52-week low of Rs 108.05 and is still trading 12 per cent lower from its 52-week high of Rs 178.25.
Ace investor Ashish Kacholia has a 1.9 per cent stake in the manufacturer of carbon black as of June 2023. He holds 70,84,990 shares in the RP-Sanjiv Goenka Group company.
Recently, the company posted its earnings for the first quarter of FY24. The net profit for the April-June quarter fell 15 per cent on a year-on-year basis to Rs 109 crore as against Rs 126 crore last fiscal. Revenue slipped over 4 per cent year-on-year to Rs 1,347 crore, down from Rs 1,409 crore a year ago.
PCBL also announced the commissioning of the first phase of its speciality chemicals capacity expansion at Mundra, Gujarat on July 10, 2023. Upon completion, PCBL will have a speciality chemicals production capacity of 40,000 MTPA at its Mundra plant.
According to ICICI Securities, PCBL witnessed healthy Q1FY24 volume growth of 12.5 per cent in carbon black driven by a 22.6 per cent rise in export volumes, which indicates that the strong overseas market opportunity is playing out. The company also witnessed a steady 6.7% volume growth in the domestic market.
"The company anticipates strong volume growth over the next few years due to Europe / US looking to source more carbon black volumes from China / India amid muted capacity addition in Russia, Europe and US. PCBL anticipates a capacity addition of 80-100 ktpa over the next few years to meet the growing demand. It is working on developing super-conductive-grade carbon black, which finds application in EV batteries," the brokerage said.
"We have increased our EPS estimates by 1-2 per cent over FY24E-FY25E as we raise volumes and spreads; however, the EPS improvement has been restricted due to higher tax rate. We have increased our FY25E P/E multiple to 13x (from 12x) as we believe the market is becoming favourable," said ICICI Securities.
The brokerage firm has maintained a 'Buy' rating on the small cap stock with a target price of Rs 200, suggesting an upside potential of over 27 per cent from Monday's closing price of Rs 157.50.
About the company
PCBL, erstwhile known as Phillips Carbon Black, is the leading manufacturer of carbon black, which is used as a reinforcing material in tyres. PCBL was set up in the year 1960 and started production at Durgapur with a production capacity of 14,000 MT per annum.
Apart from four strategically located state-of-the-art plants at Durgapur (West Bengal), Palej (Gujarat), Mundra (Gujarat) and Kochi (Kerala), it has also set up R&D centres at Palej (Gujarat) and Ghislenghien (Belgium). In 2023, PCBL commissioned its fifth plant in Chennai (Tamil Nadu).
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Shares of PCBL have delivered multibagger returns to its long-term investors as the stock has zoomed over 3,000 per cent in the last ten years. The multibagger stock has recovered over 45 per cent from its 52-week low of Rs 108.05 and is still trading 12 per cent lower from its 52-week high of Rs 178.25.
Ace investor Ashish Kacholia has a 1.9 per cent stake in the manufacturer of carbon black as of June 2023. He holds 70,84,990 shares in the RP-Sanjiv Goenka Group company.
Recently, the company posted its earnings for the first quarter of FY24. The net profit for the April-June quarter fell 15 per cent on a year-on-year basis to Rs 109 crore as against Rs 126 crore last fiscal. Revenue slipped over 4 per cent year-on-year to Rs 1,347 crore, down from Rs 1,409 crore a year ago.
PCBL also announced the commissioning of the first phase of its speciality chemicals capacity expansion at Mundra, Gujarat on July 10, 2023. Upon completion, PCBL will have a speciality chemicals production capacity of 40,000 MTPA at its Mundra plant.
According to ICICI Securities, PCBL witnessed healthy Q1FY24 volume growth of 12.5 per cent in carbon black driven by a 22.6 per cent rise in export volumes, which indicates that the strong overseas market opportunity is playing out. The company also witnessed a steady 6.7% volume growth in the domestic market.
"The company anticipates strong volume growth over the next few years due to Europe / US looking to source more carbon black volumes from China / India amid muted capacity addition in Russia, Europe and US. PCBL anticipates a capacity addition of 80-100 ktpa over the next few years to meet the growing demand. It is working on developing super-conductive-grade carbon black, which finds application in EV batteries," the brokerage said.
"We have increased our EPS estimates by 1-2 per cent over FY24E-FY25E as we raise volumes and spreads; however, the EPS improvement has been restricted due to higher tax rate. We have increased our FY25E P/E multiple to 13x (from 12x) as we believe the market is becoming favourable," said ICICI Securities.
The brokerage firm has maintained a 'Buy' rating on the small cap stock with a target price of Rs 200, suggesting an upside potential of over 27 per cent from Monday's closing price of Rs 157.50.
About the company
PCBL, erstwhile known as Phillips Carbon Black, is the leading manufacturer of carbon black, which is used as a reinforcing material in tyres. PCBL was set up in the year 1960 and started production at Durgapur with a production capacity of 14,000 MT per annum.
Apart from four strategically located state-of-the-art plants at Durgapur (West Bengal), Palej (Gujarat), Mundra (Gujarat) and Kochi (Kerala), it has also set up R&D centres at Palej (Gujarat) and Ghislenghien (Belgium). In 2023, PCBL commissioned its fifth plant in Chennai (Tamil Nadu).
Also read: Adani Enterprises shares rally 4% post AGM. Here's why