PCBL Chemical (PCBL)

FairStock Score: 52/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Five-year revenue CAGR of 25.87% shows the company has executed growth in its core carbon black business.
• Promoter holding at 53.38% provides alignment with minority shareholders.
• Piotroski F-Score of 6/9 suggests acceptable short-term operating health despite earnings stress.
• Dividend yield of 1.94% offers some cash return while waiting.
• Latest quarterly sales of ₹1,846 crore indicate meaningful scale and customer base.

Concerns

• Profit down 42.16% and latest quarter net profit just ₹2 crore on ₹1,846 crore sales, showing a near-total margin collapse.
• P/E of 46.75, P/B of 3.09, and EV/EBITDA of 362.18 make valuation extremely expensive; Graham Number of ₹120.08 implies negative margin of safety of -157.65%.
• ROE of 6.97%, ROCE of 11.82%, and debt/equity of 1.36 indicate weak capital efficiency and a stretched balance sheet.
• Altman Z-Score of 1.94 is in the distress zone; FCF of ₹70 crore is negligible against ₹12,174 crore market cap.

AI Analysis

At first glance, PCBL Chemical looks like a story of growth: five-year revenue CAGR of 25.87% and a promoter holding of 53.38%. But as Graham taught, past growth is not future safety. This is a carbon black producer, a cyclical, capital-intensive business tied to tyres and autos. The recent numbers tell a much harsher truth. Sales are down 0.42% and profit down 42.16%; the latest quarter earned just ₹2 crore on ₹1,846 crore of sales. That is a razor-thin, almost non-existent profit. Return on equity is only 6.97%, and ROCE is 11.82%, while debt-to-equity stands at 1.36. This is not the kind of financial strength I demand. Valuation is even more troubling. At ₹290.67, the P/E is 46.75 and price-to-book is 3.09. The Graham Number works out to ₹120.08, meaning I would be paying more than double the conservative intrinsic value. Margin of safety is negative 157.65%. EV/EBITDA of 362.18 and a DCF value of ₹0.08 are absurd, though I treat any one model with suspicion; here all signs point to overvaluation. Free cash flow of ₹70 crore is tiny relative to a ₹12,174 crore market cap. The Altman Z-score of 1.94 sits in the danger zone, and the Piotroski score of 6/9 offers modest comfort, not enough. I want a margin of safety. PCBL does not have one. The dividend yield of 1.94% is thin compensation for the risks. This is a cyclical at the wrong point in the cycle, selling at a price that assumes perfection. I would keep it on a watchlist, but not in my portfolio.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer