Business
Buy NOCIL; target of Rs 250: Sharekhan
Buy NOCIL; target of Rs 250: Sharekhan
About this update from Nocil Limited
Sharekhan's research report on NOCILAlthough Q2 earnings beat our modest estimates, volume/margins stayed stressed on Chinese dumping, dragging PAT by 22% q-o-q to Rs. 27 crore. Volumes fell by 5% q-o-q given lower export volumes and a 15% q-o-q fall in EBITDA margins to Rs. 35/kg on pricing pressures. Demand environment stays challenging given recessionary trends in export markets, while domestic demand is robust. High Chinese supply at low prices is a concern for rubber chemical price. We sharply cut FY24E/FY25E ESP by 18%/21%.OutlookDemand challenges seems to be reflected in valuation of 20x/15x FY25E/FY26E EPS. Long-term growth outlook is intact on Indian tyre industry’s growth and China plus one strategy would drive global market share gains. Hence, we maintain a Buy with a revised PT of Rs. 250.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.NOCIL - 05 - 10-2023 - khan