Broker's call: Nocil (Buy)

Badrinarayanan K S 5367 Updated - October 03, 2022 at 06:10 PM.

Target: ₹275

CMP: ₹259.15

NOCIL Ltd. Is engaged in manufacturing of rubber chemicals which are used by the tyre industry and other rubber processing industries. It is the Largest Rubber Chemicals Manufacturer in India with modern for the manufacture of rubber chemicals. NOCILs brands PILFLEX Antidegradants, PILNOX Antioxidants, PILCURE Accelerators, Post Vulcanization Stabilizer and PILGARD Pre Vulcanization Inhibitor are well recognised in both domestic as well as international markets.

Growth in Auto Sector & Strong replacement demand in Tyre Industry: The OEM manufactures are clocking highest ever volume figures in domestic market which is instigating demand for new tyres in both PV and commercial vehicles.

The domestic tyre industry is also witnessing strong replacement demand. This demand has led to highest ever consumption of rubber (natural & synthetic) globally to 29.7 MMT. This translates to increase in demand for rubber chemicals produced by the company which usually account for 3.5 per cent of total rubber consumption.

Improving product profile: NOCIL has a shift in product mix with increasing tilt towards specialty chemicals (25 per cent of total Q1FY23 revenues) and increase in Exports share to 36 per cent of total revenues. This will improve companies margin profile.

Published on October 3, 2022 12:40

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