Specialty chemicals stocks to buy, hold: Here are ICICI Securities’ top picks

“Pigment prices have increased marginally on QoQ basis, which shows continued pressure on margins for Sudarshan. EPL will continue to face challenges due to elevated polymer prices, which were up 2.1% quarter-on-quarter (QoQ),” the note stated.

Meanwhile, ICICI Securities has given add rating to SRF shares whereas it has reduce stance on specialty chemical stock Clean Science and Technology.

Sharing its note on monthly price trends for specialty chemicals, the brokerage house said that R-22 prices rose to Rs257/kg in Q1FY23, but volumes were down 58% YoY in April 2022. However, R-22 spreads have dipped to ₹120 (from Rs128 in Q4FY22) due to higher fluorspar and chloroform prices. 

In packaging film segment, spreads have dipped for both BOPET and BOPP. This was expected due to new capacity expansion. Further, PTFE prices are steady whereas volumes declined 13.1% YoY in April 2022. Carbon black export prices increased 19% QoQ to Rs115, which is expected to improve spreads, and volumes were up 58% YoY in April.

“While inflation in LAB is relatively lower, Galaxy may see some volumes in tier-3 customers shift from LA to LAB. Rossari Biotech’s four key raw materials’ inflation remains elevated which has kept the company’s margins under pressure. However, in April 22, acetic acid prices dipped sharply, but other three products’ prices continue to rise,” ICICI Securities’ note added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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