Chemicals Q3 Results Preview - Growth To Be Volume-Driven; HDFC Securities Lists Stocks To Buy, ADD, Sell

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HDFC Securities Institutional Equities

Revenue for our coverage universe is likely to improve by 9.3% YoY while it could fall marginally QoQ in Q3. Prices of industrial solvents and basic chemicals have declined YoY. This shall lead to improvement in margins. However, increase in freight costs may offset the benefit of falling prices of chemicals.

On a sequential basis, the prices of the chemicals are showing a mixed bag. Addition of new products, demand pick-up for few products compared to last year and commissioning of new facilities under contract manufacturing have resulted in sales volumes growth compared to Q3 FY24.

Ebitda could jump up by 7% YoY, led by improvement in sales volumes while realisation remains lowered YoY.

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