- 18 Sep 2024
- ICICI Securities
EXECUTES THE ANNOUNCED JV WITH KINALTEK IN BATTERY APPLICATION FOR ELECTRIC VEHICLES
News: PCBL as per its announcement made earlier has executed a JV with Kinaltek (Kindia, an Australian company, which has developed nano silicon technology for battery application). PCBL shall own 51% in the JV Company (Nanovace Technologies Ltd) which will have the intellectual property and know-how of products for battery application and a pilot plant for the same. PCBL will initially do an equity infusion of US$ 16 million (~₹ 130 crore, largely aimed at acquisition of certain intellectual property from Kinaltek and its group entities) along with a commitment to infuse additional funds up to US$ 28 million (~₹ 230 crore) in stages (subject to the completion of certain milestones). It will also be subscribing to optionally convertible debentures of the JV company to the tune of US$ 16.5 million (~₹ 140 crore) for certain auxiliary expenses.
Views: This is a positive development for PCBL as this JV is being executed to expand into the growing battery application market (e.g. electric vehicles, etc.) where there is immense potential of profitable growth. PCBL in the past has indicating working in the conductive grade advance carbon material with application in EV batteries. We have a positive view on the company amid (i) profitable organic growth underway at its base carbon black business (ii) turnaround in sight at Aquapharm (iii) big opportunity in sight in Nano Silica (EV battery chemical space). We expect Sales/PAT at PCBL to grow at a CAGR of 21%/25% over FY24-27E.
Impact: Positive