Specialty Chemicals Q2 Results Preview - Cyclical Pain May Aggravate: ICICI Securities

ICICI Securities Report

We estimate its specialty chemical coverage universe’s revenue may dip 12% YoY in Q2 FY24E due to destocking and weak demand. Ebitda is likely to decline 16.7% YoY on weaker spreads and operating deleveraging.

1. SRF Ltd.'s Ebitda to dip 15.4% YoY due to pressure on revenue for ref-gas and fluoro-specialty, partly offset by quarter on quarter recovery in packaging films and technical textiles;

2. Navin Fluorine International Ltd.’s Ebitda (+31%) may benefit from the commissioning of high performance products plant and higher specialty / contract research and manufacturing services revenue;

3. Gujarat Fluorochemicals Ltd.’s Ebitda may decline (-55% YoY) due to lower ref-gas, bulk chemicals revenue and dip in fluoropolymers volume,

4. Clean Science and Technology Ltd. (-17% YoY) is likely to be impacted by lower pricing in performance chemicals segment, but margin may remain healthy.

5. EPL Ltd. (+14.3% YoY) to benefit from lower input prices,

6. Tatva Chintan Pharma Chem Ltd.’s performance may benefit from low base, while structure directing agent sales are likely to be stable,

7. Galaxy Surfactants Ltd.’s volumes may grow; Ebitda/kg may dip marginally,

8. Chemplast Sanmar Ltd.’s Ebitda to benefit from PVC spreads improvement,

9. PCBL Ltd.’s volumes to grow, led by Chennai plant commissioning and a slight dip in gross profit/kg QoQ,

10. Sudarshan Chemical Industries Ltd.’s revenue to benefit from very low base, and margin to improve on lower input cost,

11. Rossari Biotech Ltd.’s Ebitda may grow moderately, and

12. Archean Chemicals Ltd. is likely to see subdued demand in bromine volume; Ebitda may be stable YoY.

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