The potential imposition of anti-dumping duties could provide meaningful relief to Indian chemical companies. Within our coverage, NOCIL stands to benefit significantly, with ongoing investigations covering nearly 40% of its product portfolio.
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Specialty chemical companies under our coverage are expected to report a 5.5% YoY increase in revenue, although a sequential decline of 3.3% is anticipated. On the margin front, we expect an improvement of 58 bps YoY. This YoY growth is primarily driven by higher volumes across most companies compared to the previous year, along with improved realizations for companies with exposure to refrigerant gases and those insulated from Chinese competition.
The pain for agrochemical focused companies is expected to persist, with margins to remain under pressure in the near term. Chinese companies continue to remain a significant competitive threat to Indian chemical manufacturers. In CY24, chemical production in China grew by 9.1% now constituting 86% of global chemical production, substantially outpacing India's growth of just 1.5%.
However, with several anti-dumping investigations currently underway by the DGTR, we expect several domestic chemical companies to benefit once these duties are implemented. Companies with exposure to fluorination are likely to gain from a steady improvement in realizations for key refrigerants.
Meanwhile, sectors such as dyes, pigments, and polymer additives are expected to witness stable demand.
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Also Read: Indian Oil, BPCL, Gujarat Gas Among ICICI Securities' Bets In Oil And Gas Sector Ahead Of Q1 Results
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