N
NOCIL
201234567892012345678970123456789.8012345678950123456789
+1.05 (+0.46%)
NSE Volume
6.4L+
Broker Reports
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We lower our FY21/22E earnings estimates by 19/1% to factor in near term weakness in volumes. While near term demand slowdown in China and India is a concern, long term opportunities remain impressive. Nocil with new capacities commissioned is poised to benefit from improvement in global rubber chemicals market. Reiterate BUY with a PT of Rs96 (unchanged) based on 15x PER FY21E.
BUY
We lower our FY20-21E earnings estimates by 14-18% to factor in muted 9M performance. While near term demand slowdown in China and India is a concern, long term opportunities remain impressive given global capex of USD10bn by tyre majors and domestic capex of Rs150-180bn. Nocil with new capacities commissioned is poised to benefit from tight demand-supply situation in global rubber chemicals market. Reiterate BUY with a PT of Rs129 (Rs174 earlier) based on 15x PER FY21E.
HOLD
We remain positive on the stock as we believe long term opportunities remain impressive given capacity expansion by tyre players in global and domestic markets. However, we envisage near term pain led by demand slowdown in India as well as China. We believe with automotive sector revival, phase 2 commissioning by the company coupled with improving capacity utilization in existing facilities, growth to come in FY21E. We expect NOCIL’s topline to grow at 4.6% CAGR over FY19-FY21E (~`10,429mn to ~`11,414mn) with operating margins expected to remain at 24.0-25.0%. Post new taxation norms, we have factored tax rate at 16.7%/25.5% respectively leading to profit growth of 8.5% over FY19-FY21E to`1,996mn. At CMP of `106 company is trading at ~8.8x FY21P/E. We maintain our HOLDRating for the stock with target price of `121 (10x P/E on FY21E EPS).
BUY
We tweak our FY20/21E earnings estimates to factor in muted H1 performance. While near term demand slowdown in China and India is a concern, long term opportunities remain impressive given global capex of USD10bn by tyre majors and domestic capex of Rs150-180bn. Nocil with new capacities commissioned is poised to benefit from tight demand-supply situation in global rubber chemicals market. Reiterate BUY with a PT of Rs1 74 (Rs189 earlier) based on 15x PER FY21E or 8x EV/EBIDTA FY21E.
BUY
We estimate NOCIL to post revenues at a CAGR of 9% and profits at 13% over FY19-FY21E. It is well positioned in the global market with marquee customer base, robust margins, strong balance sheet, diversified product portfolio and technological edge. We value NOCIL at 9x FY21E given the growth prospects to arrive at a target price of Rs 137; upside of 21%
BUY
We maintain our FY20/21E earnings estimates. While near term demand slowdown in China and India is a concern, long term opportunities remain impressive given global capex of USD10bn by tyre majors and domestic capex of Rs150-180bn. Nocil with capacities doubling by H2FY20 is well poised to benefit from tight demand-supply situation in global rubber chemicals market. Reiterate BUY with a PT of Rs199 based on 15x PER FY21E or 8x EV/EBIDTA FY21E.
BUY
We expect lower realisations for FY20-21E given benign raw material prices. However, we expect EBIDTA margin to improve to 25% in FY21E led by demand revival and operating leverage. Outlook for rubber chemicals remain bright over medium term given global tyre capex of USD8bn and high capacity utilization of >80%. Reiterate BUY on Nocil with a PT of Rs199 (15x PER FY21E; Rs 221 earlier).
BUY
We cut our FY20/21E earnings estimates by ~11-12% to factor weakness in global tyre market as we moderate our volume and realisation assumptions. However, with capacities doubling by H2FY20 Nocil is well poised to benefit from tight demand-supply situation in global rubber chemicals market. High global tyre capex along with increased domestic capex augurs well for Nocil, even though near term weakness in domestic and China auto sales (Q1CY19 auto sales were down 13.7%Y/Y) will be a drag. Reiterate BUY with a revised PT of Rs221 (Rs252 earlier) based on 15x PER FY21E or 8x EV/EBIDTA FY21E.
BUY
Our recent plant visit to Nocil at Dahej reinforced our conviction on a strong growth outlook, notwithstanding near term demand dip due to weak auto sales. Company’s strong focus on R&D has developed innovative process technologies patented in US, EU and India which has reduced plant operating costs. Demand outlook for rubber chemicals remains strong given ~85% utilization, disruptions in China, and Global and domestic Tyre capex of USD10bn and Rs 250bn over the next few years. Nocil is well placed to capitalize on this demand as completion of Phase 2 expansion will double its capacity (1,10,000 tons by October 2019, ~10% of global capacity) as global Tyre players are eyeing more non-Chinese supplies. Nocil is confident of maintaining 25% EBIDTA margins in the medium term despite removal of duty protection. Retain Buy with PT of Rs252 based on 15x FY21E PER.
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