PHILLIPS CARBON BLACK LIMITED
( Market price INR 36 as On 22nd August 2013, NSE at 5400 )
1. Promoter stake :
a. 52.26 % of shareholdings held by promoters .
b. It has remain constant past couple of years
c. FII, DI holding around 35%. Public holding approx 12% only
2. Promoters Pledge share:
a. None of the promoter’s shares are either pledged or otherwise encumbered.
3. EPS and PE Ratio
a. EPS
i. Year Ended 31st March 2012 : - 6 ( Negative)
ii. Quarter ended June 2013 : -15 ( Negative)
Note: Negative EPS is cyclic due to high raw material cost and slowing demand of Auto/Auto ancillary industry ( Carbon Black is the raw material for tyre Industry which depends on growth of auto industry)
4. PEG Ratio
a. 8th Largest producer of Carbon Black in the world, targeting to be the 3rd largest by 2015.
b. Detailed Expansion plan already laid out
i. 50,000 Metric Ton Carbon Black in Kochi commissioned in May 2013
ii. Carbo Chemical Plant in Orissa by Q2 2014
iii. Greenfield Carbon Black plant of 140,000 MT in Chennai
iv. Carbon Black plant of 110,000 at Vietnam
5. Book Value of Share
a. As on 31st March 2013 Book Value is INR 170
b. Current market value of share is 36 Only
c. Company trading at almost 20% of its book value which is dirt cheap.
Conclusion : Challenges/risk associated with high input cost, under- utilization of plant capacity and slowdown in the auto/auto ancillary industry has already been factored in the market value of the share and it looks to be available at cheap price with very restricted downfall in share price. Moreover keeping in mind the expansion plans this is a good stock to add to ones portfolio with a time horizon of 2 years.
PS : My previous analysis on Reliance Broadcast Network was done at INR 31 as on 19th May 2013 ( NSE at 6050) wherein i recommended it to be a good pick with potential of handsome return and as on 23rd August its trading on 45 ( jump of almost 50% ) NSE at 5470.
