Buy NOCIL, target price Rs 327: Axis Securities

Axis Securities has buy call on NOCIL with a target price of Rs 327. The current market price of NOCIL Ltd. is Rs 266.25. Time period given by analyst is one year when NOCIL Ltd. price can reach defined target.

NOCIL Ltd., incorporated in the year 1961, is a Small Cap company (having a market cap of Rs 4458.59 Crore) operating in Chemicals sector.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 509.95 Crore, up 9.91 % from last quarter Total Income of Rs 463.95 Crore and up 47.55 % from last year same quarter Total Income of Rs 345.61 Crore. Company reported net profit after tax of Rs 66.48 Crore in latest quarter.

Investment Rationale
Over the medium to long-term utilization levels are expected to be higher than 75% clocked in Q4FY22 on the back of improved demand from domestic and export markets, with peak utilization likely to be achieved by Sep’23 at around 95% of the expanded capacities. This could result in NOCIL gaining further market share in the domestic market. It remains confident in the company’s healthy growth trajectory on account of 1) Domestic tire industry growing at 7% 2) Demand uptick in both domestic as well as international markets due to buoyant replacement demand 3) Overall higher realizations on account of improving product mix. It maintains outlook and value NOCIL at 16.9x FY24E EPS to arrive at the same target price of Rs 327/share. It maintains BUY rating on the stock with an upside potential of 19% from the CMP.

Promoter/FII Holdings
Promoters held 33.85 per cent stake in the company as of 30-Jun-2022, while FIIs owned 2.94 per cent, DIIs 4.88 per cent.