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Phillips Carbon Black Ltd. Stock Analysis

Small Cap
Evaluated by 1746 users | BSE: 506590 | NSE: PHILIPCARB |
Carbon Black
Phillips Carbon Black, established in 1960 and a part of the RPG Group pioneered the carbon black industry in India. It is now the leading producer of carbon black in the country.PCBL started production from December 1962 by the oil furnace technology; the most widely accepted manufacturing...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Phillips Carbon Black Ltd. has not performed well majority of the past ten years indicating its past ten year financial track record is not good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 14.47%12.95%3.99%0.11%5.14%4.77%4.64%13.26%17.87%12.97%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 1,6962,1872,2852,2772,4701,8941,9272,5583,5293,244
Y-o-Y Gr. Rt.-29%4.5%-0.3%8.5%-23.3%1.7%32.8%38%-8.1%
Adjusted EPS (Rs.) 6.446.070.3-3.161.092.313.2213.612216.01
Y-o-Y Gr. Rt.--5.8%-95.1%-1153.3%NA111.9%39.4%322.7%61.7%-27.2%
Book Value per Share (Rs.) 31.0835.534.1829.1629.6160.2565.3379.6395.6398.16
Adjusted Net Profit 1071055.2-54.518.939.955.4235379276
Net Op. Cash Flow (Rs. Cr.) 189-86.8126-150-6.5422347261290533
Debt to Cash Flow from Ops 2.65-8.196.94-7.27-187.312.422.192.752.741.16
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Phillips Carbon Black Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 7.5%5.6%19%-8.1%
Adjusted EPS 10.7%71.2%70.7%-27.2%
Book Value per Share 13.627.114.52.7
Share Price 20.4% 39.9% -6.5% 24.8%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 25.2818.440.86-9.993.725.155.1218.7825.1116.53
Operating Profit Margin (%) 13.2710.74.833.136.5210.5912.8215.5217.5914.22
Net Profit Margin (%) 6.314.780.23-2.390.762.112.889.1710.758.51
Debt to Equity 0.971.161.482.162.390.980.670.520.480.36
Working Capital Days 164174196189149164159146142173
Cash Conversion Cycle -2472742698339364252
Entity Percentage Holding
Promoters 53.56%
Institutions 12.84%
Non-Institutions 33.60%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Phillips Carbon Black Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Phillips Carbon Black Ltd. is a below average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Phillips Carbon Black Ltd.'s performance infers:

Phillips Carbon Black Ltd. earnings have grown by 71.2%, whereas share price has appreciated 39.9% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Phillips Carbon Black Ltd. share prices over the last 10 years. Here is what we found out:

Phillips Carbon Black Ltd. share price has appreciated 13% annually over the past ten years.

Phillips Carbon Black, established in 1960 and a part of the RPG Group pioneered the carbon black industry in India. It is now the leading producer of carbon black in the country.

PCBL started production from December 1962 by the oil furnace technology; the most widely accepted manufacturing process of carbon black patented by its then collaborator and world carbon black leader, Phillips Petroleum company, USA. The collaboration ended in 1978. However, PCBL continued its progress by virtue

Phillips Carbon Black, established in 1960 and a part of the RPG Group pioneered the carbon black industry in India. It is now the leading producer of carbon black in the country.

PCBL started production from December 1962 by the oil furnace technology; the most widely accepted manufacturing process of carbon black patented by its then collaborator and world carbon black leader, Phillips Petroleum company, USA. The collaboration ended in 1978. However, PCBL continued its progress by virtue of the ingenuity of its technologists, engineers and sustained R&D activities. In 1988 PCBL entered into a technical agreement with Columbian Chemicals Company, USA, and acquired access to the modern state-of-the-art Carbon Black technology. This resulted in the company gaining flexibility, product range, production capacity and energy conservation.

RPG Group recognizing the major turnaround achieved during the last two years and the growth path PCBL has embarked upon to capture the opportunities in Carbon Black business has made Carbon Black an independent Business Sector with effect from  August 1, 2008.The company’s present installed capacity is 270,000 MTPA. The company is not only the largest exporter of Carbon Black from India but is also one of the largest in Asia in its field.

The company has taken advantage of the newly introduced Electricity Act of 2003 to set–up a 12 MW co-generation power plant at its Baroda plant using the offgas. After meeting the internal demand for production of carbon black, the surplus power of around 7 MW – 7.5 MW is being sold to the GEB Grid from end March, 05. State of the art Enterprise Resource Planning system SAP was implemented in conjunction with the internationally renowned consultants, M/S Accenture as the implementing partner. SAP is functioning satisfactorily.

PCBL acquired Gujarat Carbon & Industries Limited (GCIL) Baroda in November 1996 and Carbon and Chemicals India Limited (CACIL) was merged with PCBL with effect from 1st April 1997 with the twin objectives of increasing volumes and proximity to certain key customers. A capacity expansion was undertaken in 2004 to take the plant capacity at Baroda to 90000 MT/Annum.

The rubber industry uses a total of 95% of carbon black production while the rest is consumed by plastics, paints and dry cells. In domestic market, the company is regular supplier to all the major tyre manufacturers and has an overall domestic share of around 40%. PCBL continues to be the the undisputed leader in the field of carbon black in India.

Encouraged by the success of the Baroda co-generation power plant, the company is setting up a 30 MW co-generation power plant at its Durgapur plant utilizing the offgas for generation of power. The internal consumption would be around 6 MW and the surplus power would be sold to interested consumers.PCBL has three manufacturing units located in Durgapur, Cochin (Southern India) and Baroda (Western India). The production capacity of the three units put together is almost 47% of the total installed carbon black capacity in India; that of Durgapur unit alone accounts for 24%.

Products manufactured by the company include:

The company designs, manufacturers and markets carbon black. The major market for Carbon Black is Tyre Industry. Carbon Black is also required by Non-Tyre rubber based application industry as well as the plastic industry.

PCBL has capability & flexibility to produce any ASTM grade in addition to the grades mentioned above. Besides ASTM grades, PCBL also manufactures customized product specific to a customer.

The company is the largest manufacturer and supplier of carbon black in the country catering to the needs of elastomer, plastic, paints and ink manufacturing industries.It also manufacture Special Black for non-rubber applications

Achievements/ recognition :

  • The company has bagged prestigious awards like coveted ICMA Award for novel energy conservation in chemical plants of the country.
  • The company has bagged CHEMTECH foundation Award for wealth from waste.
  • In 1997, it has also won the “best company of the year” award for all round performance within the RPG companies.
  • Award for second best safety and housekeeping practices was awarded (in 1995 for PCBL Durgapur).
  • It is ISO-9001 certified, and is the only Carbon Black manufacturer in Asia to have achieved this distinction.
  • The Durgapur unit has also received the QS-9000 in December 2000, and has initiated the Environmental Management System (EMS) activities for receiving ISO 14001 Certification.
  • Cochin plant obtained ISO 9002 : 1994 Ceritificate in 1998, which was followed soon after by that of the Baroda plant.
  • Cochin Plant has also bagged the Environment Management System (EMS) standard accreditation under the 14001 : 1996.
  • PCBL enjoys the highest share in Indian Carbon Black market
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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