NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Systematix Report
Thr brokerage firm Systematix has re-initiated coverage on six specialty chemical companies - Aarti Industries, Atul, SRF, Deepak Nitrite, Vinati Organics and Navin Fluorine International.
The brokerage expects a sharp divergence in their Q1 FY27 performances. Interestingly, the composition of this growth is more compelling than the headline figure itself, with the expansion driven by-
- price-led inflation, following the spike in crude and crude-linked feedstocks during the West Asia conflict,
- a weaker rupee (Rs 94-95/USD) and
- two distinctive profit pools - firm refrigerant gas pricing (SRF, Navin Fluorine) and windfall expansion in phenol-acetone spreads (Deepak Nitrite).
Consequently, companies with strong pass-through mechanisms or commodity tailwinds are likely to post standout margins. In contrast, conventional intermediate players (Aarti Industries, Atul) are likely to absorb the higher input costs with a lag, resulting in sequential margin compression.
The near-term earnings setup is flattered by factors that have begun to reverse. Brent crude has corrected from a peak of ~$110/bbl to less than $75/bbl following de-escalation, implying that pricing and spread gains embedded in Q1 numbers could now pose as headwinds during the remainder of FY27.
Thus, Systematix would monitor aspects of management commentaries that focus on the sustainability of refrigerant realisations, phenol spreads and the pace of rawmaterial cost normalisation.
Click on the attachment to read the full report:
ALSO READ: DMart To LTM Q1 Review — Check Target Prices, Upside Potential, Stock Calls By HDFC Securities
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
