POCL Stock Soars as Dolly Khanna-owned Company Hits New High
Shares of Pondy Oxides and Chemicals (POCL), a prominent recycling and manufacturing company in India, have been on a remarkable upward trajectory in recent weeks. On Monday, the stock surged by 17% on the Bombay Stock Exchange (BSE), reaching a new high of Rs 1,735 amidst heavy trading volumes. Over the past two trading days alone, the stock price has soared by an impressive 28%, reflecting the growing investor confidence in the company’s prospects.
The surge in POCL’s stock price can be attributed to its outstanding financial performance in the June 2024 quarter (Q1FY25). Since July 22, the market price of POCL has nearly doubled, registering a staggering 98% increase. This remarkable growth has positioned the company on a strong footing as it embarks on the new fiscal year with positive momentum.
One of the notable investors in POCL is Dolly Khanna, who holds 170,974 equity shares, representing a 1.31% stake in the company as of the end of Q1FY25. Other significant investors include Sangeetha S, with a 1.77% stake (230,000 shares), and Ramesh Shantilal Tolat, holding a 1.14% stake (148,714 shares). The confidence shown by these investors further underscores the promising outlook for POCL.
In Q1FY25, POCL reported a substantial increase in its consolidated profit after tax (PAT), which surged by 216% year-on-year to Rs 13 crore. Consolidated revenue from operations also witnessed robust growth, reaching Rs 445 crore, reflecting a 37% and 23% increase on a year-on-year and sequential basis, respectively. The company attributed this significant growth to enhanced production, sales, and realizations in both Lead and Plastics segments.
Moreover, POCL’s consolidated earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 76% to Rs 24 crore on a year-on-year basis. The company also saw an improvement in EBITDA margins, which increased to 5.4% from 4.4% in Q1FY24. These strong financial results demonstrate POCL’s effective operational strategies and sound financial management.
The growth drivers for POCL include capacity expansion, a focused capital expenditure strategy, improved operational efficiencies, a robust balance sheet, and strict adherence to government regulations such as Battery Waste Management Rules (BWMR) and Extended Producer Responsibility (EPR). The company’s management has emphasized the importance of sustainability and compliance with environmental norms to drive long-term value creation.
POCL has set ambitious targets for its future growth, including expanding capacities in existing verticals like Lead and diversifying into new segments such as Lithium-ion. The company aims to achieve volume growth of over 15%, revenue compound annual growth rate (CAGR) and profitability growth exceeding 20%, EBITDA margins above 8%, return on capital employed (ROCE) of over 20%, 60% contribution from value-added products, and a 20% reduction in energy consumption to mitigate carbon footprint.
Additionally, POCL’s board has approved a stock split in the ratio of 1:1, resulting in the sub-division/split of existing equity shares from 1 share with a face value of Rs 10 each to 2 shares with a face value of Rs 5 each. This decision aims to enhance the liquidity of the company’s equity shares and make them more accessible to small investors, fostering broader participation in the company’s growth story.
With a diverse procurement base and a strong customer network both in India and globally, POCL enjoys brand approvals from major battery manufacturers and offers a wide range of customized alloys. The company also benefits from an extensive land bank and strategic locations near ports, enabling efficient logistics and distribution capabilities.
Currently, POCL is focused on expanding its capacities in Lead, Lead Alloys, and other non-ferrous metals to meet the growing demand for its products. By continuously improving its processes, investing in new machinery, and adopting cutting-edge technology to meet international standards, POCL remains committed to adding value for all stakeholders and sustaining its growth trajectory.
In conclusion, the impressive performance of POCL’s stock reflects the company’s strong fundamentals, strategic growth initiatives, and commitment to sustainable practices. With a clear roadmap for expansion and a track record of delivering solid financial results, POCL is well-positioned to capitalize on emerging opportunities in the recycling and manufacturing sector, driving value creation for investors and stakeholders alike.
