Home / Markets / Stock Markets /  Top 3 specialty chemical stocks to buy: Here are Motilal Oswal's picks

Sharing its top stock picks in the specialty chemicals space, domestic brokerage and research firm Motilal Oswal has provided its view on the names on which it has a Buy rating in its coverage universe which include three specialty chemical stocks - Vinati Organics, NOCIL and Galaxy Surfactants.

Here are Motilal Oswal's 3 top specialty chemical stock picks -

Vinati Organics (VO): “Veeral Organics Pvt. Ltd. (wholly owned subsidiary of VO) is also set to commence production of MEHQ, Guaiacol and Iso Amylene in 1HFY24E, which should propel VO into the next-level of its growth story," the brokerage note highlighted. 

Veeral Additives will commence production of AOs from Butyl Phenol, thus resulting in forward integration, it said. “The stock is trading at 36x FY24E EPS and 28x FY24E EV/EBITDA, with return ratios of 22-25%. We value the company at 45x FY24E EPS to arrive at our target price of 2,680," it added. Vinati Organics is a leading manufacturer of specialty chemical and organic intermediaries.

NOCIL: Debottlenecking of its existing units is expected in the near term, even as NOCIL evaluates its plans for the next three-to-five years. Domestic Tyre companies are planning to ramp up production, with a planned capex of 200 b over the next three years, said Motilal Oswal while maintaining Buy rating on Nocil shares with a target price (TP) of 319 apiece. NOCIL is a leading rubber chemicals manufacturer in India.

Galaxy Surfactants (GALSURF): The specialty chemical manufacturer's capex guidance was at 1.5 b each for FY23/FY24, similar to that in FY22. Expansion of products is expected to be across the board, but the focus will mainly be on Specialty Care Products, as per the brokerage. 

“The stock is currently trading at 35x FY24E EPS and 23x FY24E EV/EBITDA. We value the company at 45x FY24 EPS, or INR89, to arrive at our target price of 4,000 with Buy tag," Motilal Oswal suggested. Galaxy Surfactants is one of the leading surfactant manufacturers in India and speciality chemicals for cleaning and personal care space.

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

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