PCBL Ltd Q4 FY22 Earnings Conference Call Summary

Key highlights from PCBL Ltd (PCBL) Q4 FY22 Earnings Concall

Q&A Highlights:

• Dhaval Shah of Svan Investment asked how the scenario is panning out in terms of price increase. Kaushik Roy MD said that there is a sharp increase in crude price. However, the company said it doesn’t want to take advantage of the situation but also want to pass a reasonable portion of cost to pass on to the customer.

• Dhaval Shah of Svan Investment also asked about carbon black market impacting due to sanctions in Russia. Kaushik Roy MD said that in China there is lack of availability of raw material which is impacting the supply of carbon black from China. In Russia due to sanctions, there is supply constraint. However, demand is holding and it’s is an opportunity for PCBL.

• Jain of ICICI Securities asked how large is Russia in terms of capacity. Kaushik Roy MD replied that in terms of capacity, the size is similar like India. In terms of capacity it is 1.1 million tonnes. There the difference from India is that 30% of that is used domestically and rest 70% goes out primarily to Western Europe.

• Jain from ICICI Securities asked about contracted realization for power and when does it come for renewal. Kaushik Roy MD answered that typically PCBL get into contract which are 6 months to 1 year or 1.5 year max. Also typically 70-80% will go for contract and rest is normally supplied to the grid directly.

• Jain from ICICI Securities enquired that if there’s any scope for optimizing the exiting capacity until Chennai comes down in terms of product mix or manufacturing process. Kaushik Roy MD said that the company has very limited opportunity in existing capacity. However, it will not add up to a very big number, but will give some delta.

• Bhavesh Chauhan with IDBI Capital asked what was PCBL’s specialty volumes for 4Q22. Kaushik Roy MD answered that it’s 9,350 tonnes for 4Q. And for the full year it’s 34,686 tonnes to be precise.

• Bhavesh Chauhan with IDBI Capital enquired if the company is expecting to see a significant ramp up in specialty volumes in FY23. Kaushik Roy MD said that it’s expected to see further improvement on these of around 25% growth or at around 45,000 tonnes for FY23.

• Bhavesh Chauhan with IDBI Capital asked if PCBL is expecting its EBITDA per tonne again going back to the INR15,000 per tonne mark. Raj Gupta CFO answered that looking at the direction the company is seeing in its performance, PCBL should be performing better than INR15,000.

• Peter of Kisima Wealth Management asked about the impact on PCBL’s margin if oil goes every $10 above $100. Raj Gupta CFO said that the change in crude price though it impacts working capital, gross realization etc., it doesn’t impact PCBL’s absolute margins per tonne. It’s not the right metric to evaluate the margin performance.

• Tarang Agrawal from Old Bridge Capital asked what proportion of the current specialty business volumes are exports and going forward will it largely be export or domestic fed growth. Kaushik Roy MD replied that currently, PCBL is roughly about 30% in domestic and 70% international. Going forward international will continue to be more as the market is much larger outside India.

• Bharat Sheth of Quest Investment asked about the specialty volume declining in 4Q22 vs. 3Q22, if there was any impact on the demand environment. Kaushik Roy MD answered that it was due to the market being down due to uncertainty, high inflation etc. which contributed to the quarter and Feb. had two days less for business.