Phillips Carbon – Turns ex-stock split today, positive stance retained: ICICI Direct
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PCBL Ltd. (formerly Phillips Carbon Black) is the leading manufacturer of carbon black, which is used as a reinforcing material in tires.
The company also derives about 6% of sales volume from specialty carbon black, which generates high margins and finds application in paints, plastics, among others. It has a healthy margin profile (more than 15%), a capital-efficient business model (return on capital employed greater than 15%) with limited leverage on the balance sheet (~0.3 times debt: own funds from financial year 21).
PCBL had set April 12, 2022 as the record date for the split of shares in the ratio of 1:2, i.e. an existing share of nominal value Rs 2 is split into two shares of nominal value Rs 1 each.
On the ex date, i.e. from today (April 11, 2022), the share price will adjust to the stock split ratio and is expected to trade at Rs 120/share, i.e. half of the closing price on April 8, 2022 (Rs 240/share).
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