Chemicals & Petrochemicals share price target

The pain for agrochemical focused companies is expected to persist, with margins to remain under pressure in the near term. Chinese companies continue to remain a significant competitive threat to Indian chemical manufacturers. In CY24, chemical production in China grew by 9.1% now constituting 86% of global chemical production, substantially outpacing India's growth of just 1.5%. However, with several anti-dumping investigations currently underway by the DGTR, we expect several domestic chemical companies to benefit once these duties are implemented. Companies with...

Due to geopolitical tensions owing to the Iran-Israel war, the price of crude shot up to $74 even touching $75 briefly. This has a direct effect on prices of chemicals. This reflected in June-25 data, where all the chemicals in our coverage universe exhibited minor uptick in prices, barring Acetone and Acetic Acid. Acetone and Acetic Acid are not linked in the production process; hence the downward trajectory could be due to weakening end-use demand. Acetonitrile prices showed the steepest jump of 8% MoM. This does not bode well for Li-Ion battery manufacturers as it is used as a solvent, particularly in high performance...

All of the chemicals in our tracking universe exhibited a downward pricing trajectory on MoM basis in May 2025, barring Monoethylene Glycol; which exhibited a sharp 9% rise MoM. The price rise for this and the previous couple of months is driven by the uptick in seasonal demand for coolants and anti-freeze products which find use in automobiles. Heavy soda ash registered a price fall of 17% in just a month, owing to fall in demand from flat and container glass end-product segments. We expect prices to continue on the downward trajectory for the near term, post the highs seen in the Covid era. CRDMO companies are witnessing significant tailwinds in terms of growth. Companies...

farmer income and demand for crop inputs going ahead global chemical production. Production in the EU was largely stagnant. Demand continues to remain weak in other key markets, leading to pressure on realizations, especially for agrochemicals. Recent commentaries and outlook of global chemical giants suggest that that recovery is not expected in CY25. We continue to maintain our cautious stance on the sector considering muted demand recovery and pricing pressure, especially for agrochemicals. Out of our coverage universe, we remain positive on Fine Organics, Navin Fluorine and...

Impact of reciprocal tariffs by US on Indian chemical companies: Indian chemical companies are expected to benefit in terms of export to the USA. However, Chinese manufacturers may divert their products through countries like Argentina and Brazil to USA to avoid tariffs. In non-US markets including domestic Indian market, Indian companies are likely to face stiff competition from Chinese due to low-cost dumping. US has raised tariff on Indian import of chemicals from 2% to 26%, while tariffs on import of Chinese chemicals...

Sustainability has been the buzz word since past few years. Afterall, 2024 stood out as the warmest in the 175-year observational records maintained by World Meteorological Organization. In fact, each of the past ten years were the warmest years on record. The largest three-year loss of glacier mass happened in the past three years. Carbon dioxide levels in the atmosphere are the highest in the last 800,000 years. Among numerous extreme events of rainfall, flood and drought, one of the most notable was heatwave in Saudi Arabia where temperature reached as high as 50C. But sustainability costs. As a result, we have witnessed flip flops by companies (as well as countries). Drill, baby drill has been a classic example. Amidst all this hullabaloo, a recent study does throw credible positive signs on adoption of sustainable products...

After levying an initial 10% tariffs across all the imports from China, Trump has over Chinese counterparts considering 10% retaliatory tariffs by USA on Indian companies. USA is largest importer of chemicals of India and accounts for 14% of the total chemical's exports from India. Back in 2018 when first trade war between USA-China began, India was a beneficiary with its total exports to...

Consensus estimates for FY26 also cut continuously for the past 7 quarters Aggravating demand, inventory stocking, and continued dumping combined with lack of visibility have led to sharp downward revisions in consensus estimates for specialty chemical companies under our coverage. As a result, sliding stock prices, with a few having almost halved in past few quarters, resonate more with EPS cuts rather than downgrades. Some companies like Aarti Industries and Gujarat Fluoro have witnessed as much as 70-75% cut in their FY25 consensus estimates since they began appearing, while most...