Active Stocks
Fri Jun 14 2024 15:58:47
  1. HDFC Bank share price
  2. 1,597.45 1.05%
  1. State Bank Of India share price
  2. 840.20 -0.44%
  1. Tata Steel share price
  2. 183.05 0.30%
  1. ICICI Bank share price
  2. 1,105.10 -0.20%
  1. Kotak Mahindra Bank share price
  2. 1,717.00 -0.54%
Business News/ Markets / Stock Markets/  'Indian specialty chemicals story strong', says Anand Rathi, suggests these top 8 stocks to buy, hold
BackBack

'Indian specialty chemicals story strong', says Anand Rathi, suggests these top 8 stocks to buy, hold

The brokerage has Buy ratings on specialty chemical stocks Aarti Industries, Atul and Sudarshan Chemicals

ShutterstockPremium
Shutterstock

Domestic brokerage and research firm Anand Rathi analyzed the FY22 annual reports of six chemicals companies (SRF, Vinati Organics, Fine Organic, Navin Fluorine, Deepak Nitrite and Atul). The Covid-19 pandemic impact, widespread supply bottlenecks, non-availability of key raw materials, higher energy and raw material prices were key challenges in FY22, as per the brokerage house. 

“The companies’ strong revenue growth came from higher realizations and volumes on the low base. Despite the topline growth, EBITDA margins were hurt by lower gross margins (higher raw material costs not fully absorbed), higher power &fuel costs (energy crisis) and higher freight &forwarding expenses (logistic challenges and container non-availability)," the note stated.

Ahead, the companies are positive on the long-term structural growth of the Indian chemicals sector on the back of the China+1 strategy, focus on reducing chemical imports, R&D capabilities, and its leading and strong position with favourable government policies, it added.

The brokerage house has Buy ratings on specialty chemical stocks Aarti Industries with a target price of 960, Atul (TP: 10,145), and Sudarshan Chemicals (TP: 585).

Meanwhile, it has Hold stances on Navin Fluorine (TP: 4,650), Vinati Organics (TP: 2,350), Galaxy Surfactants (TP: 3,500), and Neogen Chemicals (TP: 1,572), and Nocil (TP: 296).

With supply-chain disruptions and uncertainty in China, global manufacturers are seeking to diversify their sourcing. India provides strong alternatives with scale, technology, raw materials and supportive government policies, as per Anand Rathi. 

“India’s chemicals sector is in a good position to profit from this change and capture a sizable share of the market. Indian chemicals manufacturers are poised to emerge as a credible alternative and, in some cases, primary suppliers to global firms. While all in the Indian chemicals sector would benefit from this shift, specialty chemicals manufacturers could gain the most due to higher entry barriers and potential for value-added niche products," the note added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 28 Sep 2022, 11:54 AM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started