I-Sec estimates its specialty chemical coverage universe’s revenue may dip 12% YoY in Q2FY24E due to destocking and weak demand. EBITDA is likely to decline 16.7% YoY on weaker spreads and operating deleveraging

We are positive on the CSM leader PI Industries and CPC companies UPL and Sumitomo Chemical India (SCIL), with new product launches, pricing power and long runway for growth. Potential catalysts are a likely PLI scheme for Agrochemicals and concessions related to tariff restructuring to support value addition CPC. Key ‘BUYs’ are PI Industries and UPL in large caps and SCIL in midcaps- on dips. Coromandel International (CRIN) is a value Buy

The chemical industry’s growth is not hostage to any one economic parameter or any one end-user industry. Rising domestic demand and the need to evolve have forced domestic chemical companies to expand their capacities to remain competitive. Our positive stance on the sector is backed by its strong growth, aided by diversity in terms of chemistries and/or technologies

We estimate our specialty chemical coverage universe revenue to grow 19.3% YoY (down 0.6% QoQ) in Q2FY23, partly on rise in prices due to input cost inflation. Gross profit to grow 22.7% YoY (down 1.4% QoQ, largely due to seasonality), which indicates strong underlying trend led by our expectation of 1) SRF’s robust growth (36.7% YoY) on continuous good show in ref-gas, offset by weakness in non-chemicals business

Indian Specialty Chemicals to benefit from China+1 strategy

Specialty Chemicals: Genie is out!