Price correction due to Chinese dumping hurts performance

Company
11 Mar 2024
5 Min read 
  • NOCIL's 3QFY24 results showed a price correction due to Chinese dumping, impacting performance.
  •  EBITDA/kg increased by 13% YoY, missing estimates, while sales volumes increased by 14% YoY.
  •  Management expects positive volume growth in 4Q and believes the long-term outlook for rubber chemicals remains intact.
  •  The company is facing subdued demand in international markets, including China, which is affecting sales volumes.
  •  Revenue, EBITDA, and PAT estimates for FY24 and revenue estimates for FY25/26E have been revised downwards.
  •  NOCIL currently trades at a premium to its long-term average on a one-year forward P/E basis.
  •  The target price for NOCIL is INR250, based on a PEG ratio of 0.7x.
  •  The company's financials show growth in revenue, EBITDA, and PAT, with improving return ratios.
  •  NOCIL's capacity and utilization, sales volumes, and realization and EBITDA per kg have been analyzed.
  •  The company's management highlighted the challenges in the industry, including the impact of Chinese imports and the recovery in the latex industry.
  •  NOCIL's financial ratios and cash flow statement have been provided for analysis.
  •  The investment in NOCIL carries market risks, and investors are advised to read all related documents carefully.
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