Fine Organic, PCBL, Vinati Organics Are PL Capital's Top Picks In Chemical Sector — Check Target Price

The ability of Chinese manufacturers to crash prices can create existential crisis for upcoming Indian chemicals manufacturers, says PL Capital.

In this report, PL Capital highlights how margins may be hit if global oversupply continues.

(Representative image. Source: Envato)

In 2024, global Li-ion cell manufacturing grew +42% YoY to 1.5TWh. Indian companies have also announced to create battery manufacturing capacity of 200GWh. While India does need to develop its own manufacturing of battery and other new age chemicals, especially for sectors like batteries and electronics, lack of focus on R&D, absence of a favorable ecosystem in the country, and almost unimpregnable global supply chain pose challenges.

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PL Capital Report

We remain cautious on the execution and profitability risks surrounding upcoming battery chemical projects in India. Our stance is constructive on select specialty chemical names with strong visibility.

We reiterate our positive view on Fine Organic, underpinned by its capacity expansion plans in India and the U.S. by FY27. We assign target price of Rs 5,610, with the stock currently trading at 28x FY27E EPS.

We also maintain a positive outlook on PCBL, supported by volume growth in its CB business and recovery in Aquapharm. Our target price stands at Rs 474, valuing the stock at 22x FY27E EPS.

Similarly, we remain constructive on Vinati Organics, driven by robust demand for ATBS and scaling of its antioxidant portfolio. We assign target price of Rs 2,091; the stock is currently trading at 33x FY27E EPS.

Click on the attachment to read the full report:

PL Capital Chemicals Sector Update.pdf
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Also Read: Dr. Agarwal’s Health Care, Eye Hospital's Merger Synergies To Drive EPS Accretion; Motilal Oswal Maintains Buy

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