PCBL Chemical (PCBL IN) – Q2FY26 Result Update – Muted realization leads to sharp decline in EBITDA/t – Downgrade to ‘Accumulate’
Published on 18 Oct 2025
Due to impact of cheaper imports and tariff uncertainties, we downgrade PCBL to “Accumulate” rating with a target price of Rs402, valuing the stock at 22x Sep’27 EPS. PCBL reported consolidated revenue of Rs21.6bn in Q2FY26, up 2% QoQ, while remaining flat YoY. In the carbon black (CB) segment, volumes grew 10% YoY, but lower realizations and higher operating costs weighed on profitability, with EBITDA/tn (calculated) at Rs13,489 a sharp decline compared to Rs21,324 in Q2FY25. Realizations are expected to remain under pressure in the near term, impacted by cheap imports and tariff-related headwinds in the USA. The power segment delivered a strong performance, supported by increase in power generation. Aquapharm reported 9% YoY revenue growth, though margins contracted by 90bps due to elevated operating costs.
Looking ahead, we expect CB volumes to grow by 1%/17% in FY26/FY27, supported by new capacity additions. However, EBITDA/tn is likely to decline sharply to around Rs16,542 in FY26 and Rs19,023 in FY27, reflecting continued pricing pressure. Aquapharm’s margins are expected to recover gradually as crude oil prices rise and capacity expansions come onstream. We downgrade PCBL to an “Accumulate” rating, as the stock currently trades at 21x FY27E EPS.
