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Buy NOCIL; target of Rs 112: East India Securities

East India Securities is bullish on NOCIL has recommended buy rating on the stock with a target price of Rs 112 in its research report dated July 01, 2020.

August 26, 2020 / 06:24 PM IST

East India Securities' research report on NOCIL

Q4FY20 revenue of NOCIL Ltd de-grew by 12.0% YoY to Rs2127mn, primarily due to decline in realization. EBITDA margin witnessed a steep contraction of 759bps YoY to 17.2%, largely owing to increase in commodity prices which led to an increase in RM cost by about 405bps YoY to 50.0% of sales. Despite decline in revenues, other expenses grew by 0.8% YoY. Overall, EBITDA reported a decline of 38.9% YoY to Rs366mn owing to lower gross margins and operating deleverage. PAT reported decline of 39.6% YoY to Rs219mn with PAT margin of 10.3% which witnessed a contraction of 470bps.


Currently, the stock is trading at FY22E P/E of 10.3x and EV/EBITDA of 5.5x. We value the stock on forward EV/EBITDA multiple of 7.9x and arrive at target price of 112 per share which offers 34.7% upside from current level. Hence, we maintain BUY rating on the stock. Risk to our call is unforeseen impact on the demand, further lockdowns and volatility in crude oil prices.


For all recommendations report, click here

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Broker Research
first published: Jul 3, 2020 01:38 pm
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