PCBL Chemical (PCBL IN) – Q4FY26 Result Update – Volume growth intact margin pressure persists – HOLD

PCBL reported consolidated revenue of Rs20.7bn in Q4FY26, registering a 12% QoQ increase but a marginal 1% YoY decline, primarily due to lower contribution from the Aquapharm segment. The carbon black segment delivered volume growth of 15% QoQ and 8% YoY. However, EBITDA/tn remained under pressure, declining to Rs13,516 /tn from Rs17,655/tn in Q4FY25. Margins are expected to stay constrained until Q2FY27, driven by higher input costs and a one-quarter lag in pass-through. The company has implemented selective price hikes in the specialty segment to partially offset cost pressures. The Aquapharm (chemicals) segment reported a 10% YoY decline in revenue, impacted by global uncertainties and continued weakness in the oil and gas sector. Looking ahead, we expect carbon black volumes to grow by ~9% in FY27 and ~5% in FY28, supported by ongoing capacity expansions. However, EBITDA/tn is likely to remain below historical peaks, estimated at ~Rs16,000 in FY27 and ~Rs17,000 in FY28. While margin pressure is expected to persist, a gradual improvement is anticipated compared to FY26, aided by recent price increase undertaken. Aquapharm margins are also expected to remain subdued due to persistent external challenges. Management has guided for double-digit EBITDA growth in FY27, supported by volume expansion, a leaner cost structure, and improved realizations. The stock is currently trading at 18x FY28E EPS. We value it at 20x FY28E EPS and maintain a HOLD rating.