- 29 Nov 2024
- ICICI Securities
COMMISSIONS 20KT SPECIALITY CARBON BLACK LINE
News: The company has informed stock exchanges that it has commissioned second and final phase i.e., 20,000 MTPA of 40,000 MTPA specialty chemical capacity at its Mundra Plant, Gujarat on 28th November, 2024. With this, the combined manufacturing capacity of the Company in the carbon black domain stands at 7.9 lakh tonnes per annum.
Views: This is scheduled commissioning with company already guiding for the same. Speciality volumes constitute ~11% of the total carbon black volumes sold by the company. PCBL has, over the years, with indigenous R&D efforts has developed grades in specialty carbon black (SCB) domain, which is a high margin product (typically ~3-4x normal trye grade carbon black). Speciality grade carbon black volumes grew 42% YoY to 57KT in FY24. On a high base, SCB volumes are expected to grow at a CAGR of 14% over FY24-27E to 85KT in FY27E. This is structurally positive for EBITDA/tonne profile at PCBL. With organic levers of growth amidst changing business profile in favour of more speciality chemical play, healthy margin & RoE profile (~15%+), robust cash flow generation, we retain our positive stance on PCBL.
Impact: Positive