BQ Prime'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 BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Over the past several years since the China plus one story has started to take shape, there has been a sea change in how the Indian chemical industry is being perceived by the domestic as well as global clientele.
Simultaneously, the industry's perception of looking at the business has changed drastically with not many desiring to play a second fiddle to China.
Our analysis depicts that whenever a company has undertaken a huge capex, it has led to considerable amount of absolute Ebitda growth and expansion in Ebitda margin within three years of its commissioning.
An analysis of nine of our coverage companies has exhibited this trend over the years, with the aggressive capex cycle mostly commencing post-FY16 – the year in which China started its clamp down on the chemical industry.
Companies have realised the extent of opportunities in the exports market with global clients searching for an alternate supplier. Certain companies are also banking on a substitution for growth. These factors could lead to exponential growth for our coverage universe companies in the coming years.
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