Nocil shares climb 9% despite a 64% drop in Q1 consolidated net profit

Shares of Nocil climbed around 9 per cent on the BSE on Tuesday even as the company reported a 64 per cent decline in its consolidated net profit at Rs 11.95 crore against Rs 32.88 crore profit in the year-ago period. Revenue from operations stood at Rs 106.51 crore, down 53.6 per cent year-on-year (YoY). 

Consolidated profit before tax (PBT) dropped 81.7 per cent to Rs 9.32 crore in Q1 2020 as against Rs 50.88 crore in Q1 2019. Operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) slumped 87.96 per cent to Rs 8 crore in Q1FY21 as against Rs 57 crore in Q1FY20. The operating EBITDA margin was at 7.5 per cent in Q1FY21 as compared to 24.6 per cent in Q1 FY20. 

Revenue from operations was impacted due to Covid-led nationwide plant shutdown both at the customers' and suppliers' side. Tyre majors started their operations at sub-optimal levels. Lower revenue resulted in lower absorption of fixed costs leading to subdued EBITDA. READ MORE
 

"Nocil is one of the largest rubber chemicals players globally with a capacity of 110,000 tons including intermediaries. The rising clamor to diversify supplies away from China can open many opportunities for Nocil, " Prabhudas Lilladher had said in a note dated June 30.

"With Covid pandemic impacting April volumes, we have factored in a 10 per cent volume decline for FY21E. However, led by likely smart recovery in replacement demand and aggressive push by Nocil to increase utilisation we expect 35 per cent volume growth for FY22E," the brokerage had said. It had a "BUY" rating on the stock with the target price of Rs 96. 

At 01:19 pm, the stock was trading 7.6 per cent higher at Rs 130. In comparison, the benchmark S&P BSE Sensex was trading 0.27 per cent higher at 38,903 levels.