Prabhudas Lilladher is bullish on NOCIL has recommended buy rating on the stock with a target price of Rs 252 in its research report dated February 01, 2019.
Prabhudas Lilladher's research report on NOCIL
We cut our FY20/21E earnings estimates by ~6% to factor in weakness in global tyre market as we moderate our volume growth assumptions. However, Nocil with capacities doubling by H2FY20E 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 global auto sales will be a drag. Nocil has recently started exporting to US in a limited way as tyre players look to diversify supplies on the back of rising US.
Reiterate BUY with a revised PT of Rs252 (Rs270 earlier) based on 15x PER FY21E or 8x EV/EBIDTA FY21E.
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