ICICI Securities Maintains Buy Call on PCBL Chemical, Targets Rs 270

PCBL Chemical's Q4FY26 Results Show Promise, Despite Aquapharm's Struggles

ICICI Securities' research report on PCBL Chemical highlights a strong Q4FY26 performance, driven by a rise in domestic carbon black volumes and stabilised gross profit per kilogram. The company is optimistic about achieving high single-digit volume growth and double-digit EBITDA growth for carbon black in FY27, thanks to US tariff reductions, higher power realisation, and cost reductions.

Key Growth Drivers

PCBL's growth prospects are further bolstered by the commissioning of multiple specialty carbon black facilities, which will aid in mix improvement. Additionally, the company is evaluating capex for coal tar distillation to diversify its feedstock and is making progress in the battery chemical segment, with encouraging customer qualifications.

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Challenges Ahead

While the outlook for PCBL Chemical appears promising, its subsidiary Aquapharm continues to struggle. However, higher crude prices and rising US output are early signs of recovery, and the company aims to achieve a quarterly EBITDA of INR 750mn by the end of FY27.

Changes to Earnings Estimates

ICICI Securities has revised its earnings estimates for PCBL Chemical. The company has cut FY27/28E EBITDA by 9-12% and reduced its target price to INR 270 (from INR 290) while increasing the price-to-earnings multiple to 18x (from 16x). As a result, the research firm has downgraded its recommendation to REDUCE (from Hold).

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