Specialty chemical firms may outperform: ICICI Securities; Recommendation to buy, hold these shares

 Specialty chemical firms may outperform: ICICI Securities; Recommendation to buy, hold these shares

• The brokerage estimates that its specialty chemical coverage universe revenues in Q2. is to grow 19.3% YoY in


Domestic brokerage and research firm ICICI Securities expects chemical companies to again outperform on EPS growth and 19.3% year-on-year in its exclusive chemical coverage universe revenue in the second quarter (Q2 FY23) ended September of the current financial year. (YoY) is expected to increase. Partly on the rise in prices due to input cost inflation.

“Gross profit to grow 22.7% year-over-year, which indicates a strong underlying trend, led by our expectation of 1) SRF's strong growth on continued good performance in Ref-Gas, driven by weakness in the Non-Chem business Offset, 2) Gujarat Fluorochemicals' (57%) YoY) growth on strong performance in new fluoropolymers, 3) Clean Science (52% YoY) growth on a low basis and 4) New Fluorine's EBITDA expansion with the commissioning of the HPP plant," stated in the note.

Sharing its top specialty chemical stocks, the brokerage has given buy ratings on Gujarat Fluorochem, Chemplast Sanmar, EPL, Tatva Chintan and Philips Carbon Black.

Meanwhile, it has stances on SRF, Galaxy Surfactants, Rosary Biotech and Clean Science and Technology. Moreover, it has an ad tag on Sudarshan Chemical while Naveen is short on fluorine stocks.

The brokerage house expects the acquisition to benefit Rossari Biotech. Tattva Chintan's performance was impacted by sluggish SDA sales. Galaxy Surfactants volumes may drop due to weakness in AMET, but EBITDA/kg could be healthy.

“Chemplast volumes will decline on a seasonal and higher basis year-on-year, but PVC spread is likely to be weak, meaning a sharp decline in EBITDA YoY. PCBL's Gross Profit/Kg is expected to improve on the back of better India sales and export market gains. EPL and Sudarshan may face cost adverse conditions."

Further, the companies are positive on the long-term structural development of the Indian chemical sector based on the China+1 strategy, focusing on reducing chemical imports, R&D capabilities, and in accordance with its leading and strong position with favorable government policies. , analyst