Reduce NOCIL; target of Rs 256 Prabhudas Lilladher

Prabhudas Lilladher recommended reduce rating on NOCIL with a target price of Rs 256 in its research report dated October 29, 2024.

Broker Research

October 30, 2024 / 12:22 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on NOCIL

NOCIL reported a topline of Rs3.6bn (PLe: Rs3.9bn), reflecting a sequential decline of 2.5%. This decrease is attributed to a modest drop in volumes due to logistics challenges, though realization remained largely flat on a QoQ basis. Based on our calculations, average realization stood at Rs254/kg, a YoY decline of 6%. Sales volume grew by 11% YoY; however, EBITDA/kg dropped by 25% YoY, impacted by higher operating expenses due to increase in production activity and freight cost. Overall capacity utilization was at 70%, though usage varies significantly across product lines. To support high-demand rubber chemical products that are already running at high utilization rates, the company is investing Rs2.5bn in capacity expansion. These additional capacities are expected to come online in H2FY27, though peak utilization across the portfolio is not anticipated for another 1.5 to 2 years. Near-term headwinds are likely to continue impacting performance.

Outlook

The stock is currently trading at ~32x FY26E EPS. We maintain ‘Reduce’ rating with a TP of Rs256, valuing the company at 27x FY26/FY27 EPS.

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