NOCIL (NOCIL IN) reported a topline of Rs3.6bn (PLe: Rs3.3bn), a decline of 9.2% YoY majorly due to subdued realization. As per our calculation, average realization declined 7% QoQ to Rs255/kg. EBITDAM was also impacted due to higher raw material cost, especially aniline prices, which are on an uptrend. As per the management, volumes in the domestic market continue to face challenges due to dumping from China; however, the management stated that volumes in export markets have shown growth and expects the trend to continue. The earlier announced capex of Rs2.5bn for expansion of rubber chemicals production is expected to commence in H2FY27.
OutlookWe believe the company’s performance will continue to be impacted by near-term headwinds. The stock is currently trading at ~32x FY25E EPS. We maintain ‘Reduce’ rating with a TP of Rs224, valuing the company at 23x FY26 EPS.
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