Specialty Chemicals Results Preview - Weak Q4 Estimates Imply FY25E EPS May Be At Risk: ICICI Securities

ICICI Securities Report

We estimate our specialty chemical coverage universe’s revenue to dip 1.1% YoY (up 11.8% QoQ) in Q4 FY24E amid weak demand and subdued pricing. Ebitda will likely decline 15.5% YoY (+23.3% QoQ) on weaker spreads and operating deleveraging. Company wise highlights:

• SRF Ltd.’s Ebitda may rise 78.9% QoQ due to seasonality/higher realisation for ref-gas; packaging films Ebit to remain subdued. SRF to outperform peers in chemicals segment.

• Navin Fluorine International Ltd.’s Ebitda (down 54.8% YoY) may be hurt by lower revenues from specialty/contract development manufacturing organisation segments.

• Gujarat Fluorochemicals Ltd.’s Ebitda may be down 48.8% YoY due to lower refgas/fluoropolymers volumes and lower prices for bulk chemicals.

• Clean Science and Technology Ltd.’s Ebitda down 15.4% YoY may take a hit from lower pricing in performance chemicals, but margin shall remain healthy in spite of hindered amine light stabilisers plant commissioning.

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