India’s largest manufacturer of carbon black (46% market share by capacity) and seventh largest in the world.
You may recollect that we initiated coverage of PCBL on 14-Mar-2017 recommending a BUY at prevailing CMP of Rs. 281, subsequently upgrading it twice.
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PCBL is well positioned to capitalize on the positive structural changes witnessed by the industry coupled with robust auto sector demand, continuation of antidumping duty on Chinese imports, stable international crude prices and improvement in operational efficiencies. We have valued the stock on the basis of P/E ‐ method of relative valuation. Given the above factors, we have increased the discounting to 15x (earlier 12x) and recommend a BUY on the stock with a target price of Rs 1107/- (21% upside) in 12 months.
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