ICICI Direct Assigns Buy Rating On Chemicals Sector Midcap Stock, Sees 37% Strong Upside

The brokerage firm ICICI Direct assigned a Buy rating on PCBL Ltd. with a target price of Rs. 200 apiece. The brokerage claims a potential upside of up to 37% considering the given target price and the current market [price of the stock. PCBL is an RP-Sanjiv Goenka Group company. It is a Midcap chemicals sector company that operates in the Carbon Black industry.

Rating and Target price

ICICI Direct said, "We assign BUY rating on PCBL amid healthy volume growth in the offing, increasing share of speciality grade carbon black, consequent rise in margins and return rations, inexpensive valuations and healthy b/s. We value PCBL at a conservative 13x P/E on FY25E EPS of Rs. 15.4/share with our consequent target price as Rs. 200/share (over the next 6 months). This is our high conviction Midcap Idea."

Stock Outlook

On Tuesday, the stock of PCBL jumps 1.32%, ended at Rs. 146.10 apiece. Its 52 week high is Rs. 153.75 apiece and its 52-week low is Rs. 97 apiece, respectively.

The stock jumped 5.11% in the last 1 week. It has given a decent return of 14.72% in the last 1 month and 25.73% in the last 3 months, respectively. It has given 46.32% positive return in 1 year. In the last 3 years, it has given 229.61% string return. In 5 years, it gave 28.78% positive return.

About - PCBL Ltd.

PCBL Ltd (erstwhile Phillips Carbon Black) is the leading manufacturer of carbon black, which is used as a reinforcing material in tyres. PCBL also derives ~9% of sales volume from speciality carbon black, which fetches high margins and finds application in paints, plastics among others • It has a healthy margin profile, capital-efficient business model (RoCE>15%) with limited leverage on b/s (~0.3x debt: equity as of FY23).

Disclaimer - The above stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.