Nocil is the industry leader in rubber chemicals domestically and a credible supplier globally. The aggressive expansion plan has bolstered the company prospects over the FY18-21E with sales, EBITDA and PAT envisaged to grow at a CAGR of 16.5%, 15.8% and 14.4% respectively. On the balance sheet front, Nocil is a debt free company with net cash surplus of Rs. 260 crore. Nocil has an efficient business model with net working capital days of 108 days and strong EBITDA margins of 27.4% as of FY18 resulting in a RoCE of 22.2%. Going forward, given the strong financial performance we expect the company to deliver an average CFO of Rs. 217 crore over FY19-21E, implying a cashflow yield of 7.7%. Therefore, we value Nocil at Rs. 227 i.e. 16x P/E on average FY20E & FY21E EPS 14.2 and initiate a BUYrating on the stock.