Midcaps Q2 Results Preview - Likely To Be A Mixed Bag For Chemicals: Nirmal Bang

Nirmal Bang Report

While partial recovery in select regions is underway for specialty chemicals, exports do not show a clear trend in the midst of continued Chinese dumping, geopolitical tensions and supply chain challenges during Q2 FY25.

Recovery in H2 FY25 is expected to be gradual and that too might come at the cost of margin.

Oleochemicals companies are relatively better placed in the current environment barring supply chain hurdles as the impact of China dumping or destocking is minimal. Overseas markets are expected to outperform India region during Q2 FY25 and the rest of FY25 in our view.

The hospitality segment has come back with strong average room rate growth during Q2 FY25 after a subdued Q1 FY25 led by external factors.  Galaxy Surfactants, Fine Organics and Navin Fluorine are our Buy ideas in Chemicals coverage and Mold-Tek Packaging Ltd., CCL Products India Ltd., Indian Hotel Company Ltd. and Chalet Hotels Ltd. from our non-chemicals coverage.

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