Tushar's Stock Tips: Philips Carbon : A Hidden Gem

Thursday, August 9, 2007

Philips Carbon : A Hidden Gem

Name: Phillips Carbon Black Ltd
BSE : 506590
CMP :Rs. 159
Target : Rs 300
Period : 5-6 Months

Business Profile
Incorporated in March 1960, Phillips Carbon Black Ltd, is part of the RPG group. Not only is the company the largest domestic manufacturer of carbon black, it is also Asia`s largest exporter of CB.

Phillips Carbon Black sells CB to almost all tyre companies in the country. It is the world`s seventh largest manufacturer of carbon black. Its three plants account for 70 per cent of the country`s installed capacity. It is India`s largest exporter of carbon black.

The company has a technical collaboration with Columbian Chemicals Corporation, USA. It is the only Indian manufacturer of CB to be accredited with ISO 9001 certification.

Why a Multibagger:
• Phillips Carbon Black announced a phenomenal jump in net profits for the quarter ended in June, 2007. During the quarter, the company`s profit rose 156.64 times to Rs 219.30 million from Rs 1.40 million in the corresponding quarter, last year.Net sales for the quarter rose 3.41% to Rs 2,348.10 million compared with the corresponding quarter, a year ago. Operating margins improved to 14.65% during the quarter, a rise of 849.33 basis points compared with the corresponding quarter, a year ago. Net margins, rose to 9.32% during the quarter from 0.06%.The company`s earnings per share on a trailing twelve month basis is Rs 12.50.
• Phillips Carbon Black is in the process of reducing operational costs by improving efficiency and slashing workforce.
• Phillips Carbon Black plans to merge its subsidiaries with itself. It is in the process of mulling the merger proposal, which was likely to take a final shape within six-nine months. The company has three wholly-owned subsidiaries, Transmission Holdings, South Asia Electricity Holdings and PCBL Industrial Finance.
• Financials
      Sep '06 Dec '06 Mar '07 Jun '07
Sales     242.57 272.32 256.36 234.81
Nett Profit 1.70     7.92         13.91    21.93
EPS         0.96   3.84        5.80   8.68

It is a perfect pick.....

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