Nocil Ltd. a Mafatlal Group Company engaged in manufacture of Rubber Chemicals has posted good Q2 results on yoy basis as well qoq. Total income of the company for the quarter rose to Rs.135 crores against Rs.93 crores in the corresponding quarter of previous year and of Rs.129 crores in Q1 ending June 08.
Pattern of expenses are in line with the increase in topline, sequentially, which has resulted in a PBT of Rs.19.10 crores (Rs.2.10 crores of Q2 FY 08) and of Rs.17.21 crores in Q1 of FY 09. Net profit after tax for Sept. 08 quarter is at Rs.13.72 crores against Rs.1.41 crores of Sept. 07 quarter and of Rs.11.64 crores for June 08 quarter. EPS for the quarter is placed at 85 paise while it is at Re.1.58 for half year ending Sept. 08.
One can safely assume an EPS of Rs.3 plus for FY 09 and the share is presently ruling at Rs.13. Inspite of such satisfactory performance, share price fell by about 10 per cent on Friday and made a new low of Rs.13.10. The high equity base of Rs.161 crores is considered to be a concern by the investors. But this equity base has been existing even on 03-01-08 when share touched its 52-week high of Rs.68. At that time huge land bank held by the company at Thane industrial belt (part of land was sold by the company to Mukesh Ambani controlled RIL 3 years back) were valued into share price of the company.
In line with the prevailing sentiments, the share is rightly getting a PE of close to 4 times. Nobody in this market would prefer to consider the valuations of land held by the company, which are non-realisable in the near future. When the land bank of industrial companies where it is under development, is not considered, what one can expect from this company.
One should not be surprised to see share price hitting single digit in the near future, inspite of such a decent financial performance.
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