2010VP14 Phillips Carbon Black Ltd

Phillips Carbon Black
BSE: 506590
NSE: PHILIPCARB


Phillips Carbon Black, RP Goenka group has lined up an investment of Rs 350 Crore to increase its present domestic carbon black capacity from 3.6 Metric Tonnes Per Annum (MTPA) to 4.1 MTPA by expanding Mundra facility and entered into joint venture (80% stake), to set up 1.15 MTPA carbon black capacity in vietnam by 2012. The company is also having installed power co-generation capcity of 60.5 MW which it is increasing to 74 MW (domestic) and 16 MW planned at vietnam facility.

The company recently raised Rs 100 crore QIB Placement 50 lakh shares of of the Company. The present share capital of the company stands at 2.85 crore of 10 each after considering 50 lakh shares issued in QIB and 15 lakh warrants convertable to shares issued to promotors the share capital shall be 3.5 lakh shares. The company reserve position 296 cr shall rise to 415 crore after the above transaction and the Book Value of Rs 130 (expected after the transactions).
Promotors is likely to hold 47.71%, Institutional Investors 15.71% Body corporated 12.25% leaving a general float of 24.33% alone.

in 2009-10 it completed its Greenfield project located in Mundra (Gujarat), with a carbon black capacity of 90,000 MT which has started operations from 17th October 2009 and put up a CPP of 16 MW in Mundra which has commenced commercial operation from 24th December 2009.

The value for replacement of asset (excluding cost of land) at Current Market Price for 4.60 lakh MT of Carbon black facility is around 1930 crore with 90 MW co-generation Rs 270 crore and cost of Investment at Rs 70 crore making an entreprise value of Rs 2270 crore . out of the above the company shall be financed by loan aroung 760 cr making an net entreprise value Rs 1510 crore.

Turnover expected at the full capacity at current product price is around Rs 2120 crore with PBIDT of 276 crore which is around 13% of OPM and ROI of 12.15%

as against the same the market capitalisation is Rs 650 crore at CMP of 196

so guess what will be price target be within 18 months from now.

at .8 entreprise value Rs 364 which discounts at PE 8 on the expected EPS 45 by 2012 on increased capital base.