There is structural shift is happening in Carbon Black Supply Chain starting from Raw Material to Finished Good Demand.
China has gone due to environmental norms and other raw material issues. Russia has banned by Western countries.
Only option left with western world is India. And all supply vacuum from China and Russia shall be filled by India. Moreover PCBL is the only Largest and Efficient Indian Manufacturer which will definitely capitalise to this opportunity.
Also PCBL is improving sales from Speciality Grade Carbon Black which is with higher and stable margin. So in future Operating Margin will improve.
Investment Thesis is: Sales Growth, Operating Margin Improvement, PAT and ROCE expansion, May announce large capex soon (recent conference call), Rerating opportunity in valuation
What can go wrong: China again entering market, crude oil prices remaining very high for long, Auto industry slowdown (high sales of CB in Tyres)
Disc: Invested (May be biased) with Large Allocation @ 150.
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