Fundamentals are the financial strength and performance of a company or asset. They provide insight into a company’s ability to generate profits and manage debt. Earnings, revenue, debt-to-equity ratio, net profit margin, ROE, and ROCE are all critical fundamental factors to consider.
Carbon black is manufactured as an essential component in the manufacture of rubber and synthetic rubber articles, motor vehicle tires, printing, and painting industries.
Phillips Carbon Black Ltd (PCBL) was founded in 1960. It manufactures and produces Carbon Black and its byproducts. Phillips Petroleum Co., a major oil company and a leading manufacturer of carbon black in the United States of America, and Duncan Brothers & Co. Ltd Calcutta formed the company.
PCBL Limited, the largest carbon black manufacturer in India, holds a significant market share in the domestic market. The company’s production capacity is 7,70,000 MT per annum, and it generates 110 MW per hour of green energy. PCBL enjoys the highest share in the Indian Carbon Black market.
The company has recently made a significant acquisition. PCBL Ltd has acquired 100 percent of Aquapharm Chemicals for Rs 3,800 crore, marking a significant milestone in its operations. PCBL intends to strengthen its position in the market for carbon black and specialty chemicals.
On Friday’s session, the company’s shares closed at Rs 250 per share, a 1.24 percent increase over its previous close of Rs 246.95. The company has a market capitalization of Rs 9,420 crores.
The share price of the company rose 62 percent in the last six months and 89 percent in the year to date.
Mr. Ashish Kacholia owns 70 lakh equity shares or 1.88 percent of the company. Additionally, the promoters own 51.5 percent of the company, with foreign institutional investors owning 7 percent, the general public owning 32.5 percent, and domestic institutional investors owning 9 percent.
Looking at PCBL Limited’s financials, their net revenue decreased by 8.6 percent year over year, from Rs 1,627 crore in Q2FY23 to Rs 1,486 crore in Q2FY24. Their revenue fell by 10 percent sequentially from Rs 1,347 crore in Q1FY24 to the current levels.
In addition, the company’s net profit rose by 5.1 percent year over year, from Rs 116 crores in Q2FY23 to Rs 122 crores in Q2FY24. Their profit increased by 11 percent on a sequential basis from Rs 109 crore in Q1FY24 to the current levels.
PCBL Ltd has a low price-to-earnings ratio of 21 compared to its peers, with less debt-to-equity ratio of 0.33 a return on equity of 16 percent, a return on capital employed of 18 percent, and a net profit margin of 7.6 percent.
Written by Sriram KV
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