NOCIL (NOCIL IN) – Q4FY26 Result Update – Dumping pressure continues despite volume growth – HOLD

NOCIL reported revenue of Rs3.3bn (PLe: Rs3.4bn; Consensus: Rs3.3bn), declining 2.7% YoY but increasing 4.6% QoQ. Sequential topline growth was driven by a 7% QoQ increase in volumes, supported by single-digit volume growth across both domestic and international markets. EBITDA margin was impacted by higher raw material prices along with pricing pressure arising from cheaper imports. Based on our estimates, average realizations stood at Rs217/kg, reflecting a decline of 2% QoQ and 15% YoY. EBITDA/kg also declined 27% QoQ and 46% YoY, resulting in a contraction of 210bps QoQ and 370bps YoY in EBITDA margin. Capacity utilization varied across product lines, with select rubber chemical products operating at elevated levels. The TDQ antioxidants capex has now been completed, and trial production is underway, following which samples will be sent for customer approvals. Revenue contribution from the project is expected to commence from H2FY27, while peak utilization across the expanded portfolio is likely to be achieved over the next 1.5–2 years. We believe near-term headwinds are likely to persist; however, a potential ADD on ~40% of the company’s product portfolio could provide meaningful earnings support, although the overall impact remains uncertain at this stage. The stock is currently trading at ~31x FY28E EPS. We value the company at 30x FY28E EPS and maintain our ‘HOLD’ rating with a target price of Rs176.