NOCIL is part of Arvind Mafatlal group in the manufacturing of Rubber chemicals business since more than 4 decades. NOCIL today is the Largest Rubber Chemicals Manufacturer in India with the State of the Art Technology for the manufacture of rubber chemicals plant at New Mumbai and Dahej.
Major
customers are tyre manufacturer and auto rubber component manufacturer.
The Company offers products, such as accelerators under
the name PILCURE; anti degradants, such as PILFLEX 13; antioxidants, under the
name PILNOX; pre vulcanization inhibitor, such as PILGARD PVI, and post vulcanization
stabilizer, such as PILCURE DHTS.
70-72% of revenue comes from domestic sale and balance
comes from export sales.
Financially company has been doing well and has paid
consistent dividend for last 5 years
(in Cr.)
|
2017-E
|
2016
|
2015
|
2014
|
2013
|
2012
|
Revenue
|
740
|
715.21
|
719
|
596.14
|
488.18
|
483.36
|
Other Income
|
7.5
|
3.05
|
3.89
|
10.76
|
13.87
|
21.38
|
Total Income
|
747.5
|
718.26
|
722.89
|
606.9
|
502.05
|
504.74
|
Expenditure
|
-560
|
-577.07
|
-607.12
|
-537.25
|
-446.32
|
-448.41
|
Interest
|
-2.75
|
-9.34
|
-16.51
|
-17.39
|
-3.75
|
-0.28
|
PBDT
|
184.75
|
131.85
|
99.26
|
52.26
|
51.98
|
56.05
|
Depreciation
|
-14
|
-13.72
|
-13.6
|
-17.56
|
-7.85
|
-8.99
|
PBT
|
170.75
|
118.13
|
85.66
|
34.7
|
44.13
|
47.06
|
Tax
|
-50
|
-40.39
|
-28.9
|
-11.08
|
-1.64
|
-13.07
|
Net Profit
|
120.75
|
77.74
|
56.76
|
23.62
|
42.49
|
33.99
|
Equity
|
160.79
|
160.79
|
160.79
|
160.79
|
160.79
|
160.79
|
EPS
|
7.50
|
4.83
|
3.53
|
1.47
|
2.64
|
2.11
|
Dividend
|
1.50
|
1.2
|
1
|
0.6
|
0.6
|
0.6
|
Key Positives:
1. 1. Improvement
in economy will increase demand of auto products resulting increase in demand
2. 2. China
was major business threat for company products with anti dumping duty being enforced
for certain products could be beneficiary for the company
3. 3. China
being biggest exporter and with strict environmental laws being enforced in
China plants are closing down this should be favourable for company in long
term resulting in increase in export demand.
4. 4. Stock is available at PE multiple of 10 at CMP of Rs 74.
4. 4. Stock is available at PE multiple of 10 at CMP of Rs 74.
Target Price :
In lieu of above positive factors it can easily achieve
CAGR of 15% ,and should result in EPS of Rs 9 for year ending 17-18 at a
conservative PE multiple of 12 stock can easily touch Rs 110 in 1 year
resulting in returns of 40% in a year.
Long term investor may buy this undervalued stock at CMP
of Rs 74 with price target of Rs 110 in a year.
Are all tyre companies it's clients? Any assessment on import vs export share in the revenues?
ReplyDeleteThanks for the new pick sir
ReplyDeleteWhat should I do with jauss polymer holding since last 12 months @ 23 . Any inside is possible or should I sell now. Pls suggest me.
ReplyDeletePls read "inside" in above comments as upside
DeleteIf u r sitting at 40% profit and if holding period is more then 1 year u may book profit in next up move
DeleteCan it touch 40+ in next upside move.
DeletePlease let me know your views on Granules. I am already holding and in loss 20%
ReplyDeleteGranules is good co u probably enter the stock at peak levels of 150 pls hold it for Long and may average at 120 levels
ReplyDelete