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Nirmal Bang Report
We see supply chain costs/margins as key drivers for Q3 FY22E in our chemical universe. The sustained surge in chemical/energy prices and buoyancy in freight rates (up more than 100% YoY) could affect margins/earnings in Q3 FY22E for our chemical stocks.
We see a YoY drop in Ebitda margins for all companies, barring Sumitomo Chemicals India Ltd., ranging from 214 basis points to 786 bps. This is despite YoY topline growth in all companies – Coromandel International Ltd. will lead the pack with 48% YoY growth as a result of the massive spike in input costs (largely passed on net of the increase in nutrient based subsidy rates) and the rest following in a close herd with 10.3%-15.5% YoY growth.
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