Specialty Chemicals Q4 Preview - Excluding Chemplast, Ebitda Growth Is 15% For Chemical Cos: ICICI Securities

ICICI Securities Report

We estimate our specialty chemical coverage universe’s revenue to grow 3.3% YoY in Q4 FY23. Ebitda is expected to grow 5.3% YoY; however, excluding Chemplast Sanmar Ltd., we estimate growth to be 15% YoY:

1. SRF Ltd.’s Ebitda to dip (down 1.4%) YoY on lower margin in non-chemicals, while chemicals business to continue its good show;

2. Navin Fluorine International Ltd. (up 98%) to benefit from rise in utilisation of high purity products plant and higher specialty / contract research and manufacturing services revenue;

3. Gujarat Fluorochemicals Ltd.’s (52% YoY) growth to be led by a strong show in new fluoropolymers and ref-gas, and

4. Clean Science and Technology Ltd. (40% YoY) and EPL Ltd. (up 16% YoY) to benefit from lower input prices.

5. Tatva Chintan Pharma Chem Ltd.’s performance continues to be hurt by higher input cost, while structure directing agent sales to recover.

6. Galaxy Surfactants Ltd.’s volumes to grow but on low base, but Ebitda/kg may dip.

7. Chemplast Sanmar Ltd.’s volumes to be stable; however, PVC spread is likely to recover, but still below mid cycle levels.

8. PCBL Ltd.’s volumes to grow on re-inventorisation and gross profit/kg to be stable.

9. Sudarshan Chemical Industries Ltd. to continue facing volume pressure in pigment business on lower demand from plastics, but margins to recover partly.

10. Rossari Biotech Ltd.'s Ebitda to grow moderately even on a low base.

11. Archean Chemical Industries Ltd. to see subdued demand in bromine volume; realisation to hold.

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