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. 211 crore over FY19-21E, implying a cash flow yield of 10%. Therefore, we value Nocil at Rs. 195 i.e. 14x P/E on average of FY20E & FY21E EPS of 13.9 and maintain a BUY rating on the stock.