Prabhudas Lilladher's research report on NOCIL
We expect NOCIL IN (NOCIL) to face near-term headwinds as near term outlook from Michelin and Bridgestone, the two largest global tyre manufacturers remains weak. Michelin has marginally raised its projections for CY23 from -3%/0% for passenger cars and light trucks to -1%/+1%. However, it has cut down its truck tyre outlook from previous -4%/-1% to - 6%/-4% respectively. Similarly, Bridgestone expects “challenging conditions to continue throughout 2024 mainly in N. America and Europe”. In 9MCY23, global OEM demand for tyres has grown by 6% while demand for replacement tyres has declined by 1%.
Outlook
Reiterate cautious stand on the company with a target price of Rs226 (unchanged) valuing it 20x FY26 EPS of Rs11.3. Downgrade to ‘Reduce.
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NOCIL - 08 - 11 - 2023 - prabhu