PCBL (formerly Phillips Carbon Black) shares dropped 11.35% on January 13, 2025, reaching a five-month low of ₹346.60 per share. The decline followed the announcement of the company's Q3FY25 results, which showed a sharp 37% year-on-year (YoY) drop in consolidated net profit to ₹93 crore, down from ₹148 crore in the same quarter last year.
Key Financial Highlights
- Revenue Growth: Revenue from operations increased 21.3% YoY to ₹2,010 crore, though it fell 7% sequentially.
- Operating Costs: Total expenses surged by 23% YoY to ₹1,693 crore, driven by higher raw material and employee costs.
- Finance Costs: Finance costs saw a significant rise of 254% YoY, reaching ₹117 crore.
- Profit Margins: The operating profit margin contracted to 16%, compared to 17% in Q3FY24.
- Volume Growth: Sales volumes grew 5% YoY to 143,500 MT in Q3FY25.
EBITDA for the quarter stood at ₹317 crore, an increase from ₹279 crore in the same period last year but lower than ₹364 crore reported in Q2FY25.
Strategic Updates
1. Capacity Expansion: The company commissioned the second phase of its speciality chemical capacity at the Mundra Plant in Gujarat, increasing its total installed capacity to 790,000 MTPA.
2. New Plant in Andhra Pradesh: PCBL acquired 116 acres of land for a new carbon black plant, strategically located near major ports and customer hubs, to support seamless raw material and product movement.
3. Sustainability Certification: The company achieved International Sustainability and Carbon (ISCC) PLUS certification, underscoring its commitment to sustainable practices and emission reduction.
Growth Plans
PCBL's ambitious plans to expand its total carbon black capacity to 1 million metric tons per annum (MTPA) within the next 2-3 years, focusing on meeting growing demand across industries, instills optimism about the company's future.
Stock Performance
PCBL's stock has experienced a significant decline since hitting an all-time high of ₹584.40. It has corrected by 38% from its peak, including a 29% drop in October 2024 and an additional 20% decline in January 2025, reflecting the current situation.
Despite the recent downturn, the stock has posted impressive long-term gains, rising 191% over the past three years and 453% over the last five years.
This sharp correction highlights investor concerns over rising costs and margin pressures, even as the company pursues growth and capacity expansion initiatives.
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