Prabhudas Lilladher is bullish on NOCIL has recommended buy rating on the stock with a target price of Rs 221 in its research report dated May 13, 2019.
Prabhudas Lilladher's research report on NOCIL
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.
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