Prabhudas Lilladher has given Buy recommendation for NOCIL with a target price of Rs. 310 in its research report issued on May 19, 2022

Prabhudas Lilladher’s research report on NOCIL

NOCIL’s growth prospects look encouraging given 1) favorable demand environment in domestic and export markets driving healthy volume growth (+16% YoY in FY22) 2) sufficient capacity headroom enables capturing demand improvement 3) moderate competitive intensity with higher environment compliance costs in China leading to better level playing field 4) Zero debt balance sheet and healthy free cash flow generation of Rs 4.3 bn over FY23-24E provides comfort though crude oil at elevated levels (above USD 100/ bbl) and increase in supplies by Chinese competition pose risk to volume and spreads in FY23/24. We forecast volume growth of 12% CAGR over FY22-24E and tweak estimates to factor improvement in spreads aided by full pass through of cost inflation coupled with operating leverage benefits as it attains higher capacity utilization levels (EBITDA margin at 18.7%/19.6% in FY23/24).


Maintain BUY with a revised TP of Rs310 based on 12x FY24 EV/EBITDA implying 19.5x FY24 EPS of Rs 16.0.

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