Shares of Sumitomo Chemical India Ltd will be in focus after ICICI Securities initiated coverage with a buy rating and a target price of Rs 515, citing its parent backing, product pipeline and expansion plans. The stock was trading at Rs 523.
The brokerage said the company is well placed in India's agrochemical market because of its link with parent Sumitomo Chemical Co. That relationship gives it access to technology and products that are not widely available to domestic rivals.
ICICI Securities said Sumitomo Chemical India Ltd has a distinct position in the sector because of its strategic ties with its Japanese parent. The brokerage said access to proprietary technology and differentiated products helps the company compete with local peers.
It also pointed to the company's financial position. According to the brokerage, the company has returns on capital employed of more than 18% and low leverage.
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Earnings Stay Resilient
The brokerage said performance in the first nine months of FY26 remained steady despite a weak third quarter. It said Ebitda rose 5%, while profit after tax increased 9%, reflecting better margins even as global peers faced cyclical pressure.
Expansion And Launches In Focus
ICICI Securities said the company plans to invest up to Rs 400 crore over the next few years to expand capacity. It added that further spending is planned at the Dahej facility every two to three years. Land purchases in Dahej and Bhavnagar are also expected to support long-term growth plans.
The brokerage said product launches should add momentum. It noted that the company introduced 13 products over the past three years and plans five to six more in FY26, including fungicides and herbicides supported by the parent's global portfolio.
ICICI Securities said Indian agricultural demand is likely to remain firm over the next 12 to 18 months. With a wider portfolio, expansion plans and sector demand, the brokerage said Sumitomo Chemical India Ltd is positioned for sustained growth.
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