NOCIL Ltd. share price target

We downgrade our rating form HOLD to SELL on the stock as the hopes of a turnaround now seem distant.

1QFY26 was a muted quarter for NOCIL, with revenue declining 10% YoY to INR3.3b, while EBITDA margin contracted 190bp YoY to 8.8% due to continued pricing pressure in the domestic market.

Overall capacity utilization at ~65%; utilization varies across products company's product portfolio, we upgrade the stock to HOLD' with a revised target price of Rs182, valuing it at 26x FY27E EPS. NOCIL reported revenue of Rs3.4bn (PLe: Rs3.55bn, Consensus: Rs3.48bn), marking a decline of 9.7% YoY and 1% QoQ. The topline was impacted by a 7% YoY drop in volumes and lower realization. Based on our estimates, the average realization stood at Rs250/kg,...

NOCIL's EBITDA/kg missed our estimate and stood at INR25.1 in 4QFY25, down 19% YoY. Sales volume declined 4% YoY to 13.4tmt. Realization was flat YoY at INR254.2/kg (INR255.1/kg in 4QFY24) amid persistent pricing pressure from Chinese, Korean and EU players.

Overall capacity utilization at ~65%; utilization varies across products reflecting 5% YoY decline but 7% QoQ increase. The topline was impacted by ~5% drop in sales volume YoY and marginal decline in the specialty product mix. Based on our estimates, average realizations stood flat YoY at Rs255/kg. Sales volume declined 5% YoY but grew 4% sequentially. However, EBITDA /kg fell 20% YoY, primarily due to higher operating leverage, resulting in a 240bps...

We maintain our HOLD rating on the stock.

We maintain our HOLD rating on the stock.

NOCIL is poised to benefit from the rising global demand for rubber chemicals, expanding its market share through strategic sales, diversification, and operational efficiency while navigating strong competition and volatility in raw material prices.

We maintain our HOLD rating on the stock.

We maintain our HOLD rating on the stock.

The stock has experienced a significant run-up lately, which limits its upside potential. With an 8.8% downside from the current market price, we are revising our rating from SELL to HOLD on the stock.

With an 8% downside from the CMP and the stock facing structural headwinds, we maintain our HOLD rating on the stock.

Recommendation: With 5% downside from the CMP and the stock facing strucutral headwinds, we maintain our HOLD rating on the stock.