13 Apr , 2022 By : Kanchan Joshi
Domestic brokerage and research firm ICICI Securities estimates ots chemical coverage universe revenues to grow 34% YoY (9% QoQ) in Q4FY22 on sharp rise in prices due to input cost inflation, it said in its fourth quarter preview note on specialty chemicals.
The brokerage firm has Buy ratings on specialty chemical stocks Gujarat Fluorochem (target price: Rs3,356), Chemplast Sanmar (TP: Rs910), EPL (TP: Rs260), Sudarshan Chemical (TP: Rs683), Tatva Chintan Pharma Chem (TP: Rs3,000), Phillips Carbon Black (PCBL) with target price of Rs147.
Whereas, it has reduce recommendations on SRF (target price: Rs2,141) and Clean Science shares with target price of Rs2,110. Galaxy Surfactants (TP: Rs2,710) and Rossari Biotech (TP: Rs1,047)get Hold tag while it has a Sell stance on Navin Fluorine (TP: Rs3,550).
"We expect Rossari ( 64% YoY) to reflect benefit from acquisitions. Tatva Chintan’s performance hurt from slowdown in auto (lower SDA sales) while Clean Science has gained from price hikes across products," the note stated.
Galaxy Surfactants volumes may remain muted, but EBITDA normalise to Rs16/kg. Chemplast’s volumes will be healthy, but PVC spread contraction and high-cost inventory caused pain. PCBL’s gross profit/kg is expected to improve on the back of better India sales, but higher operating cost may impact EBITDA, as per ICICI Securities.
EPL and Sudarshan are likely to face cost headwinds. Gujarat Fluorochemicals is the brokerage's top stock pick in the sector.
0 Comment