Petro Carbon and Chemicals Limited ('PCCL') is a ATHA Group Company engaged in the business of manufacturing and marketing of Calcined Petroleum Coke ('CPC') in the carbon industry. Atha Group is a multi-product, multi-technology, multi-location business conglomerate. It is a 70 year old diversified Indian business house headquartered in Kolkata. The Group was founded in the year 1957 in Odisha as a Mining and Minerals company. PCCL's business model is fundamentally a B2B model wherein they majorly supply the end product CPC, to the renowned, aluminum manufacturing government companies, graphite electrodes and titanium dioxide manufacturers as well as other users in the metallurgical, chemical industries and other steel manufacturing companies. In 2018, the company was honoured with the prestigious NALCO VIKRETA UTKARSH PURASKAR, recognizing them as the top supplier among all the suppliers of POL (Petroleum, Oil, and Lubricants) by the National Aluminium Company Limited. PCCL's plant was operational since the year 1975, wherein the detailed engineering and layout of the plant was done by Engineers India Limited. This plant was later acquired, revamped and upgraded by the group in the year of 2008. In the last five years, the group has strategically shifted its attention towards Vertical Integration, technological Innovation, Diversification, strategic partnerships which has resulted in Operational expansion, excellence, resulting in a substantial enhancement of its overall performance. Company currently operates one (1) manufacturing plant located at Sutahata-I, PO: Oil Refinery, Haldia, Dist. Purba Medinipur, West-Bengal (Haldia Industrial Growth Centre of WBIIDC) which is presently involved in calcination of Petroleum Coke. The Plant has a capacity of approximately 93,744 tons per annum of CPC and the plant comprises an area of around 30 acres with good infrastructure facilities like own railway sliding inside the plant premises itself facilitating unloading / loading of wagons, along with yard / shed to store both Raw Petroleum Coke (RPC) / Calcined Petroleum Coke (CPC). As per financial performance, Petro Carbon and Chemicals Limited has posted total income / net profits of Rs 155.28 Cr / Rs 0.11 Cr (FY21), Rs 279.92 Cr / Rs 5.70 Cr (FY22), Rs 517.60 Cr / Rs 6.72 Cr (FY23) and Rs 447.11 Cr / Rs 70.31 Cr (Upto Q3 FY24). So as per previous financials data, company has shown good growth, but sudden rise in net profit just before IPO raises doubts. Company has posted an average EPS of Rs 2.04 and average RoNW of 17.91% for last three fiscals. Issue is priced at a P/BV of 3.96 as per NAV of 43.13 as on 31.12.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 73.97, 62.83 and 4.51 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, GYR Capital Advisors Private Limited is associated with this SME IPO and handled 25 SME IPOs in last 3 year. From last 10 SME IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 SME IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 21.06.24 ) As per financials, Petro Carbon and Chemicals Limited has shown good growth, RoNW is 17.91% and P/E is respectively 73.97, 62.83 and 4.51 as per FY22, FY23 and annualized FY24 earnings. So, issue looks aggressively priced. Company is engaged in the business of manufacturing and marketing of Calcined Petroleum Coke ('CPC') in the carbon industry, which is highly competitive and fragmented business segment. Performance of BRLM is good. So, we give "SUBSCRIBE FOR LISTING GAINS" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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