Phillip Carbon Black (Phillips) reported better than expected Q4FY21 profitability mainly led by higher-than-expected specialty volumes. Its EBIDTA was 9.6% above our estimates, said IDBI Capital in its report.

The company's sales volumes grew 14.0% YoY to 113 kt and its EBTIDA/tonne improved 60% YoY to Rs15,924 led by better product mix. EBITDA increased 79% YoY to Rs 1,907 million and net profit jumped 77% YoY to Rs1,274 million as interest cost fell 33% YoY to Rs 81 million.

Commenting on the result review, the broking firm said, "We raise our FY22/FY23 EBITDA estimates by 20%/9% as we now expect better margins led by rising sales of specialty black volumes. We continue to value the stock at a PER of 12x FY23E EPS and derive a target price of Rs 267 (previous Rs 251) and maintain our BUY rating on the stock."

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