Captains Speak     

Published: November 15, 2024
Updated: November 15, 2024

PCBL

Speeding up carbon black capacities: Eyes global sales hike in carbon black

Realising that the carbon black market is getting stronger and its future prospects are highly promising, PCBL has embarked on an aggressive capacity expansion programme which will take the carbon black capacity of the company to one million tonnes per annum (mtpa) by fiscal 2027-28.

Revealing this at a conference call organized to discuss the company’s performance during Q2 FY25, Kaushik Roy, Managing Director, added that the company is fast-tracking the speciality black project of 20,000 mtpa in Gujarat and the 90,000 mtpa carbon black capacity in Tamil Nadu. As a result, the carbon black capacity of the company is expected to touch the 1 million mtpa mark by FY2027/28 from the present capacity of 70,000 mtpa.

Analysing the company’s performance during Q2FY25, Mr. Roy said that on a consolidated basis, at an overall level volume grew by 14% YoY. The consolidated revenue from operations was up 45% YoY to Rs 2,163 crore from Rs 1,487 crore in Q2FY24 on the back of better realization, higher sales volume in the carbon black segment (rubber & speciality blacks) and revenue from the recently acquired Aquapharm Chemicals. The sales volume (carbon black) increased by 14% YoY to 1,48,693 tonnes in the Q2FY25 from 1,30,111 tonnes in Q2FY24, supported by increased specialty volumes and higher utilization in the PCBL (TN) plant. The consolidated EBITDA was up 53% YoY to Rs 369 crore in the quarter as against Rs 241 crore in Q2FY24.

During H1FY25, consolidated revenue from operations shot up by 52% YoY to Rs 4,307 crore from Rs 2,834 crore in H1FY24. The sales volume increased 19% YoY to 3,02,610 tonnes in the first half. The consolidated EBITDA was up 62% YoY to Rs 738 crore in FY25 from Rs 455 crore.

The PCBL (TN) facility in Chennai has received approvals from major tyre manufacturers in India and the capacity utilization remains above 80%. The sales volume for H1FY25 stood at 54,210 tonnes.

GLOBAL POTENTIAL

Referring to the carbon black business, Mr Roy pointed out that it continues to be on a strong growth trajectory and is poised to capture the growth in the domestic and exports markets with new capacity additions, a wide product suite and strong R&D capabilities. The company continues to invest in growth, innovation and supply chain capabilities.

The carbon black export volume growth was higher at 22% YoY versus 10% in domestic. Consolidated EBITDA/ MT for carbon black for Q2FY25 stood at Rs 21,324 and the speciality black volume grew by 10% YoY.

As regards growth plans, Mr Roy revealed that the company plans to reach a one million mtpa capacity within the next two years from the current capacity of 770,000 mtpa. The speciality black expansion of 20,000 mtpa at

Mundra, to be commissioned by Q3FY2, will increase capacity to 112,000 mtpa by FY25. The brownfield expansion of the PCBL (TN) facility by 90,000 mtpa in carbon black and 12 MW in green power is on an advanced stage, with the first phase of 30,000 mtpa to be commissioned by Q3FY25 and the second phase of 60,000 mtpa by H1FY26. The same will take the total carbon black capacity to 880,000 mtpa and the green power capacity to 134 MW next year.

According to Raj Gupta, CFO, PCBL is expecting significant growth in the international sales volume to European markets. With the planned capacity addition in the TN facility, PCBL plans to ramp up the global sales volume from FY26.

AQUAPHARM SALES

Referring to Aquapharm Chemicals, Mr Roy pointed out that it is among the top 3 producers (excluding China) of phosphonates globally. It is India’s largest phosphonate producer with a production capacity of 130,000 mtpa and has manufacturing plants in India, the US and Saudi Arabia. The company is implementing a capacity expansion project of 38,000 mtpa by March 2025. It expects to deliver a 20% margin in this segment in FY25 and expects to improve to 25% by 2029.

According to Mr Roy, the company has formed Nanovace Technologies Ltd for developing nano-silicon products for Li-Ion batteries, where it has executed a JV agreement with Kindia Pty Ltd. PCBL will hold a 51% stake and Kindia will hold 49% in this JV. It is setting up a pilot plant to produce larger quantities, which will be followed by a full-scale plant.

The management has guided for new product launches to contribute to the target EBITDA margin of 25% by 2029. Volume growth is expected at 10-11% over the next 3-4 years.