PCBL held a conference call on 17 October 2023 to discuss the results for the quarter ended September 2023 and way forward. Mr. Kaushik Roy- Managing Director, Mr. Raj Gupta- CFO, Mr. Saket Sah- Head, Investor Relations and Mr. Pankaj Kedia- Vice President - Investor Relations of the company addressed the call.

Highlights of the Concall

• Consolidated sales volume rose 14% to 1,30,111 tonne in Q2FY24 compared to Q2FY23. Domestic sales volume was 82276 tonne while international sales volume stood at 47835 tonne.

• Revenue decreased 9% to Rs 1486.71 crore mainly due to drop in crude oil prices from an average of US$ 112 per barrel to US$ 88 per barrel on a YoY basis.

• Consolidated Ebitda per metric tonne stood at Rs 18427

• The company has already commissioned final phase of Chennai plant which is 84000 tonne per annum. As a result installed capacity of the company increased to 7,70,000 tonne per annum.

• The company has also generated cogeneration captive plant at Tamil Nadu site having a capacity of 12 MW. With this the total cogeneration power generation capacity stands at 110 MW.

• PCBL Tamilnadu achieved production volume of 9410 tonne and sales volume of 9008 tonne in Q2FY24 which is roughly around 50% of capacity available. The company expects further ramp up of capacity with approval from major customers expected over a period of next few weeks.

• On a segment basis Tyre accounted for around 79793 tonne while performance chemical reported sales volume of 34744 tonne , speciality black volume of 15574 tonne.

• The company continues to expand its product portfolio and customer base.

• Power generation also increased during the quarter from 156 million units in Q2FY23 to 167 million units this quarter with external sales volume of 103 million unit as against 95 million unit in Q2FY23. PCBL's average realization from power sales stood at Rs 4.06 per kilowatt hour.

• The company expects further increase in power generation led by commissioning of 12 MW cogeneration pwer plant (CPP) at Tamilnadu.

• PCBL also secured two patents in relation to oxidized and surface modified grade which would further strengthen the specialty portfolio of the company. Oxidized grades have application in ink and coating application while surface modified grades improve fuel efficiency and tyre life.

• The company expect specialty segment to remain positive in coming years with demand and margins to remain structurally strong considering changes in global supply chain and consumption pattern.

• Domestic tyre segment continues to be robust on the back of healthy performance of both OEM and replacement segment. It expects further boost in auto segment demand led by upcoming festive season.

• Industrial long term demand supply continues to look favorable led by expectation that industry would continue to be in a tight supply situation for year s to come.

• Major concern is worsening geo political scenario which may have indirect impact led by trade route disruptions, high oil prices and inflation.

• The company expects the additional 20000 tonne phase 2 speciality black to commison by around December 2024.

• The capacity stood at 7,72,000 tonne per annum (tpa) as of Q2FY24. The company is expected to ramp up utilization in the next 3-4 months. The maximum capacity achievable is around 6,25,000 tpa which is around 81% utilization.

• Specialty chemical black margins are 2-2.5 times of Tyre margins.

• Specialty chemical volume is expected around 50,000- 55,000 tonne in FY24. Q3FY24 volumes are expected to be better.

• The company expects revenue to be around Rs 1600-1700 crore per quarter if crude remains stable.

• The company expects volume to grow 12-13% over the next 4-5 years, Ebitda per tonne to reach Rs 20,000 by FY27

• The company is focused on adding capacity every year

• Chennai greenfield facility capex is around Rs 950 crore and incremental revenue is expected around Rs 1400 crore. Mundra facility capex is around Rs 330 crore. Mundra facility has two phases. 1st phase capex is around Rs 200 crore and Incremental revenue is expected around Rs 220 crore bn going forward.