Is The Chemistry For Chemical Companies Looking Attractive? DRChoksey's Analysis

Deven Choksey Research Report

We believe the chemistry for Indian chemical companies seem to be turning around as we anticipate improved volume growth in FY25E, this should support the top-line growth while realizations might take little more time to show similar uptick.

So, the appealing chemistry of volume growth and valuation comfort makes us confident on the growth prospectus of Indian chemical companies over the near to medium term.

Consequently, we pick the following companies as our top picks:

Rossari Biotech: Rossari Biotech Ltd. has achieved strong growth momentum in recent quarters, with robust performance in the HPPC and TSC segments. The ongoing expansion at Dahej is progressing well and is expected to boost the company’s capacity for specialty chemicals and ethoxylation products.

Balaji Amines: In the recent quarters, the company delivered steady volume growth, primarily driven by exceptional performance in the Amines segment. Looking ahead, the company remains optimistic about margin improvement, with guidance suggesting an upward trajectory. The ongoing capital expenditure projects are seen as crucial for enhancing the company’s product portfolio and long-term growth.

Archean Chemical Industries: The industrial salt segment remained robust in FY24, helping the company partially offset the underperformance of the bromine segment. In FY25E, a decent volume recovery is expected in both elemental bromine and industrial salt, along with the company’s entry into bromine derivatives.

Its low debt profile, strong interest coverage, and leadership position—driven by cost efficiency and strategic infrastructure—position the company well for future growth.

Fineotex Chemical: The company reported strong performance for FY24, achieving its highest-ever Ebitda margins, driven by lower costs and stable operational efficiency. With multiple triggers coming into play for next year-

1. increasing cotton demand,

2. inorganic international opportunity,

3. expansion of cleaning and hygiene segment, we believe the company is poised for a bright future ahead.

PI Industries: PI Industries demonstrated strong financial performance in Q1 FY25 driven by robust export growth and the successful commercialization of new products.

We expect exports overall and within exports relatively newer products and within domestic biologics to be strong growth drivers for the future.

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