Specialty Chemicals Q4 Results Preview - Earnings To Be A Mixed Bag: Systematix

Systematix Research Report

Chemical companies within our coverage are likely to report another quarter of muted results on slower demand and microeconomic headwinds.

We expect 3%/3% YoY/QoQ sales growth for our chemical coverage universe. Companies like Navin Fluorine International Ltd. (ramp up in contract development manufacturing organisation) and Vinati Organics Ltd. (heathy growth in volumes and realisations in key products) are likely to report double-digit YoY growth.

Demand within the agrochemical and pharmaceutical segments for this remains high. However, companies that continue to witness demand pressure in key business verticals (packaging films for SRF Ltd. and performance chemicals for Atul Ltd.) could post weak results.

Cumulative Ebitda margins are likely to expand 32 basis points QoQ but contract 182 bps YoY to 20.8% versus 20.5% in Q3 FY23 and 22.7% in Q4 FY22, as prices have softened QoQ.

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