PCBL shares jump 6% to hit one-year high today; is more steam left?

Shares of carbon black maker PCBL Ltd, formerly known as Philips Carbon Black, surged for the second consecutive day in Thursday's trade to scale their one-year high level. The stock jumped 5.86 per cent to hit a 52-week high of Rs 281.95. At this price, the scrip has gained 10.87 per cent in just two trading sessions. And, the multibagger stock has rallied by 160.94 per cent from its one-year low price of Rs 108.05.

PCBL recently announced that it would acquire Aquapharm Chemicals at a consideration of Rs 3,800 crore. "We believe this acquisition would upgrade its business model, margin profile and drive re-rating," Nuvama said.

"As acquisition shall be funded via debt, internal cash flows, we expect year-end debt to go up to Rs 4,000 crore with expected average interest cost of 9-9.5 per cent. Though management is confident of the deal being earnings accretive, we expect it to drag earnings near FY24E/25E, given industry weakness. Expect net debt/EBITDA to cross 3.5x with debt/equity of ~1x in FY24," the brokerage further stated.

On technical setup, analysts underlined that the stock has risen sharply in the last couple of trading months. So, possibility of some cool-off can't be ruled out.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "PCBL is in a secular uptrend and has witnessed a vertical rally from the Rs 190 sub-zone. The stock has soared over 60 per cent in the last couple of trading months and after such a rally, the possibility of profit booking should not be ruled out. It is advisable to keep trailing profits around the strong support of Rs 250-245 for the time being and wait for a correction to add new positions."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "At the current juncture, the said counter is trading way above all key daily exponential averages. So, we can expect some cool-off in the coming sessions. One can book profit in the zone of Rs 280–265 and wait for some meaningful correction until Rs 250–240 for adding fresh longs."

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "The stock has witnessed a decent rally. Recently, it saw a short correction near its support zone at Rs 250. The scrip has once again indicated an upward move to improve the bias and is expected to achieve target of Rs 285 level. Only a decisive breach below Rs 235 shall weaken the bias."

AR Ramachandran from Tips2trades said, "A daily close below support of 260 could lead to target of 228 in the near term."

The counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs).

The stock's 14-day relative strength index (RSI) came at 77.13. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 22.58 against a price-to-book (P/B) value of 3.27.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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