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Sharing the price trends in Q1FY22 (April and May) for specialty chemicals, brokerage firm ICICI Securities said that the prices were severely disrupted due to commodity price volatility and logistic issue. Thus, spreads will be distorted and not representative, it said in a note.
The brokerage said that R-22 prices have started moving up with normalisation of demand and SRF management did indicate better pricing situation for ref-gases. NTCF-caprolactam spreads are unusually low and should improve in subsequent months as highlighted by SRF.
Meanwhile, “Rossari Biotech’s key raw materials have seen sharp rise in prices, which was also visible from dip in gross margins for company in Q1FY22. Pigment prices have seen increase, which is good for Sudarshan Chemical, but it is to be seen how much raw material inflation gets passed on to customers,” ICICI Securities note on specialty chemicals stated.
The domestic brokerage firm has a Buy rating on EPL whereas it has an Add recommendation on Sudarshan Chemical stock. Further, ICICI Securities has hold ratings on SRF, Galaxy Suractants and Rossari Biotech.
For SRF, quarterly trend distorted due to commodity volatility, it said. SRF is engaged in the industrial and specialty intermediates manufacturing, with products related to Fluorochemicals, Specialty Chemicals, Packaging Films, Technical Textiles, Coated and Laminated Fabrics.
Specialty chemical stocks have been gaining traction this year amid improved outlook for the sector. Analysts have a positive outlook on the sector as they expect India’s share in the specialty chemicals to double over the next five years.
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