ICICI Securities' top stock picks in the specialty chemicals space
1 min read 23 Sep 2021, 09:51 AM ISTRossari Biotech’s key raw materials have seen sharp rise in prices, which, ICICI Securities' believes should keep pressure on the company’s gross margins in Q2FY22
PremiumSharing the insights on the price trends for specialty chemicals in the month of July 2021, brokerage and research firm ICICI Securities in a note said that R-22 prices have been flattish at ₹194 in Q2FY22-TD and spreads are likely be stable for SRF though margins for Navin Fluorine may dip on higher chloroform prices.
In the packaging films segment, spreads are stable in BOPET but high in BOPP, which should continue to benefit SRF, the brokerage said, adding that SRF has guided for higher spreads in technical textiles.
ICICI Securities further shared recommendations on certain specialty chemical stocks. It has a 'Hold' stance on SRF and has the same rating on Galaxy Surfactants and Rossari Biotech. The brokerage has an ‘Add’ rating on Sudarshan Chemical stock, a ‘Buy’ recommendation on EPL, whereas it has a ‘Sell’ tag on Navin Fluorine (NFIL).
Lauryl alcohol prices have risen significantly and LAB price increase, though relatively lower YoY, is fast catching up. Rossari Biotech’s key raw materials have seen sharp rise in prices, which, ICICI Securities' believes should keep pressure on the company’s gross margins in Q2FY22. Pigment prices have increased (good for Sudarshan Chemical), but it is to be seen how much raw material inflation of it gets passed on. Whereas, EPL should benefit from moderation in polymer prices.
For Navin Fluorine, the brokerage said that NFIL should be negatively impacted from higher chloroform prices, which were up 35% QoQ to ₹49.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
