PCBL Chemical: Target Price Revised to Rs 296 by Prabhudas Lilladher

PCBL Chemical Registers 12% QoQ Revenue Growth in Q4FY26

PCBL Chemical reported consolidated revenue of Rs20.7 billion in Q4FY26, marking a 12% quarter-over-quarter increase. However, the company experienced a marginal 1% year-over-year decline, primarily due to lower contribution from the Aquapharm segment.

The carbon black segment delivered significant volume growth of 15% QoQ and 8% YoY, driven by ongoing capacity expansions. Despite this, EBITDA/tonne remained under pressure, declining to Rs13,516 /tonne from Rs17,655/tonne in Q4FY25. The company has implemented selective price hikes in the specialty segment to partially offset cost pressures. The Aquapharm segment reported a 10% YoY decline in revenue, impacted by global uncertainties and continued weakness in the oil and gas sector.

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Looking ahead, we expect carbon black volumes to grow by ~9% in FY27 and ~5% in FY28, supported by ongoing capacity expansions. However, EBITDA/tonne is likely to remain below historical peaks, estimated at ~Rs16,000 in FY27 and ~Rs17,000 in FY28. While margin pressure is expected to persist, a gradual improvement is anticipated compared to FY26, aided by recent price increase undertaken. Aquapharm margins are also expected to remain subdued due to persistent external challenges.

Management has guided for double-digit EBITDA growth in FY27, supported by volume expansion, a leaner cost structure, and improved realizations. The stock is currently trading at 18x FY28E EPS, valuing it at 20x FY28E EPS. We maintain a HOLD rating.