HomeMoney & FinanceTop picks: 6 specialty chemical stocks to buy as recommended by ICICI...

Top picks: 6 specialty chemical stocks to buy as recommended by ICICI Securities


Sharing the price trends of specialty chemicals in January, brokerage house ICICI Securities in a note said that R-22 prices rose to 244 per kg in Q4FY22-TD, but volumes were down 81% year-on-year (YoY). This could be partially due to plant shutdown for Gujarat Fluorochemicals, but the brokerage is not worried as companies sell their entire quota allocated for full year.

In packaging film segment, spread has increased for both BOPET and BOPP. This is despite anticipation of spreads dipping due to new capacity expansion, while higher margins should keep helping SRF, the note highlighted.

ICICI Securities has Buy ratings on specialty chemical stocks Sudarshan Chemical, EPL, Chemplast Sanmar, Gujarat Fluorochemicals, Tatva Chintan, and Phillips Carbon Black (PCBL).

The brokerage has Hold recommendations on Rossari Biotech and Galaxy Surfactants whereas it has Reduce stance on SRF, Clean Science and Sell rating on Navin Fluorine shares.

“Lauryl alcohol prices rose again in January 2022 and now stand at 167, up 6.3% QoQ. Inflation in Rossari Biotech’s four key raw materials will keep company margins under pressure, while prices have cooled to some extent but are unlikely to sustain in the near term,” it added.

Further, pigment prices have increased (good for Sudarshan Chemical) on QoQ basis, but it has slightly dipped MoM belying expectations of further inflation. Meanwhile, EPL will continue to face challenges due to elevated polymer prices, as per the brokerage.

“PTFE prices have risen 13.7% YoY to Rs939, in line with GFL commentary about price increase; PTFE volumes grew 20% YoY in Jan’22. Carbon black export volumes have grown 62% YoY, hence PCBL will see higher mix of exports (which have lower spreads compared to domestic sales),” 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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