Thread by @StocksTreasures

So, as I promised I'll bring my analysis about PCBL. In this detailed #thread🧵I'll analyse the business of PCBL. Each and every aspect of #PCBL will be given in this thread from its Business, to its Fundamentals, to its Technical Analysis.

Tags:- @kuttrapali26

🥇Business Origin and History

✅Phillips Carbon Black Limited, a part of Goenka Group, was set up by Mr. K. P. Goenka in 1960 in collaboration with Phillips Petroleum Company, USA, with the core objective of substitution of the import of carbon black.

✅PCBL is the largest carbon black manufacturer in India and a strong global player with a significant customer base in 45+ countries.

✅The company also produces speciality carbon blacks which are used as pigmenting, UV stabilizing, and conductive agents in a variety

common and speciality products, including plastics, printing & packaging, and coatings.

🥇 Product Portfolio

✅The company is in the business of manufacturing carbon black and speciality blacks for B2B.

✅Carbon black is used in tyres, non-tyre rubber & non rubber products &

the speciality carbon black is used in plastics, inks & toners, paints & coatings, batteries, etc.

✅Presently, carbon black accounts for 95% of total sales volume & speciality carbon black accounts for the rest 5%

🥇Manufacturing Capabilities

✅The company owns and operates 4 strategically-located manufacturing facilities in Mundra, Palej, Kochi & Durgapur which presently operates at combined capacity of 5,71,000 TPA of carbon black along with 76 MW of co-generation power.

✅The capacity utilization for FY20 was 86%.

✅It has expanded its specialty black capacity by 32,000 TPA by 2021 & its carbon black capacity by 1,50,000 TPA by 2023.

🥇Global Presence

✅It is the largest carbon black company in India & the 7th largest producer globally.

✅It has presence across 45+ countries across the world & is the largest Indian exporter of carbon black.

✅Presently, its export sales volume accounts for ~29% of revenues.

🥇Customer Base

Its key clients include major companies like MRF, Apollo,

JK Tyre, TVS Tyres, CEAT, Nexen Tyre, Goodyear, Michelin, etc. Its top 10 clients of the company accounts for nearly 65% of total revenues.

🥇Management

✅Chairman:- Dr Sanjiv Goenka
✅ Managing Director:- Kaushik Roy
Note:- All other non-executive directors in below picture

🥇Expansion Plans

The Greenfield project of -147 KTPA for the manufacture of various grades of carbon black, and the 24 MW co- generation power plant in Tamil Nadu, are progressing strategically and are expected to be commissioned by the year end.

🥇Fundamentals Analysis

✅Market Cap:- Rs 4600 Cr
✅Stock PE:- 10.3(Undervalued)
✅Industry PE:- 23.3
✅Book Value:- Rs 69.2
✅ Intrinsic Value:- Rs 311
✅Graham No:- Rs 138
✅ROCE:- 18.2%
✅ROE:- 18.4
✅Sales Growth:- 46.8%
✅Profit Growth:- 7.78%
✅Debt to Equity:- 0.30

✅Reserves:- Rs 2576 Cr
✅Debt:- Rs 786 Cr
✅PEG Ratio:- 0.23
✅Piotroski Score:- 5
✅ Promoters Holding:- 51.38
✅FII Holding:- 10.18
✅DII Holding:- 6.06
✅Change in FII Holding:- 0.72%
✅Change in DII Holding:- 0.90%

✅Dividend Yeild:- 8.3%
PCBL gave Rs 10 dividend for per equity share held.This Rs 10 dividend brings out 8.3% dividend yield at CMP of Rs 121.20.PCBL pays dividend Every year in February month

✅In below pictures 3/5/10 years Sales, Profit Growth, CAGR and ROE of PCBL is given

🥇Financial Results Analysis

✅PCBL sales is increasing on YOY basis since September 2020.

✅In last 8 quarters, PCBL has seen more than 100 Cr Net Profits in 7 Quarters.

✅PCBL negative factor is its OPM% which is not constant sometimes it is very good and sometimes it is

Not appropriate. PCBL has to maintain 15%+ OPM %.

✅On YOY basis PCBL sales and Net Profits is increasing since Mar 2016. It had 1 bad year due to covid 19 due to which its supply chain was affected.

✅PCBL made its all time high in Jan 2018 when its share price touched Rs 155

Mentioning that its sales of Mar 2018 was at Rs 2558 Cr and Net Profits was at Rs 229 Cr. Its Net Sales has increased by 73% and Net Profits has increased by 86% in Mar 22 from Mar 18 levels.

✅In Mar 2018 its market capitalisation reached at Rs 5800 Cr its current market

Capitalisation is at Rs 4600 Cr. It will definately become a Rs 6000 Cr company in future because in present FY it has seen its highest ever Sales and Net Profits at Rs 4446 Cr and 426 Cr respectively.

🥇Chart Pattern Analysis

✅PCBL CMP is Rs 121.20. My entry was @119.70 and I told all of you to make entry @116-118. Currently, it is trading above all its EMAs/DMAs. This stock has formed a triple top at Rs 135-139 range. Above its 52 week highs it will give a wonderful

Breakout and PCBL will try to chase its all time high of Rs 155. My present SL is Rs 112 at its 20 EMA. Currently this stock is Bullish 🐂🐂 and good accumulation was happening since last 1 months. I'll only sell it above Rs 155. I'm expecting some 30% ROI from this stock and my

Drawdown will be at 5-6% if SL gets hit. On weekly time frame PCBL is rising in an uptrend manner if anyhow it goes below Rs 111 below its 200 DMA it will go into a Bearish zone for now being it is Bullish above Rs 124 we can expect good momentum in it.

A small mistake I've committed PCBL dividend yeild is 4.12% not 8.03% I calculated its dividend yeild on the basis of previous FV it's current FV is Rs 1.