Navin Fluorine, UPL, Ami Organics Shares Among DRChoksey's Top Bets In Specialty Chemicals After Q3 Results

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Deven Choksey Report

In Q3 FY25, we observed low teen YoY revenue growth and slight expansion in Ebitda margins for our coverage companies, but overall numbers were below our estimates across the board.

Volume growth remained a primary driver of top-line performance, and a shift toward higher-margin segments in the product mix supported the expansion of Ebitda margins.

However, price realization declined for most of the coverage companies due to slower demand recovery, increased competition, and global uncertainty.

UPL’s focus to shift toward higher-margin and differentiated products, particularly in Europe and Brazil will support profitability.

Ami Organics continues to see strong demand in its chronic therapeutic portfolio while expanding its CDMO segment, which contributes to improving profitability margins.

Navin Fluorine will focus on volume growth in HPP, Specialty chemical, and CDMO segments from new capacities.

Top picks: Considering their attractive valuations and favourable outlook, we remain optimistic about the following companies: UPL, supported by performance recovery and debt reduction; Ami Organics, strong CDMO pipeline and steady progress in the electrolyte additive business; and Navin Fluorine supported by new capacities and sustainable margins to drive growth.

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