Chemicals & Petrochemicals share price target

Our channel checks in the state of Rajasthan indicate that agrochemical placement for Kharif season have been ~20% higher YoY till date for the industry. So far, deficit rainfall has impacted herbicide liquidation however post healthy showers in the last 3-4 days channel partners are hoping for surge in demand. Infestation of Thrips and whitefly has increased. Cotton (up 34% till date), Oilseeds (up 11%) and Coarse Cereals (up 4.6%) acreage are expected to expand while pulses acreage (down 7% till date) is expected to decline. Industry has now tightened its credit policy for untimely...

We initiate coverage on Balaji Amines (BUY, TP = Rs 725, based on 17x FY20E EPS) and Alkyl Amines (BUY, TP = Rs 710, based on 22x FY20E EPS). Given the persistent run-up in both stocks 300% and 120% in the trailing two years, valuations may not rerate further even as stock performance mimics earnings growth here on. Amines form a relatively smaller, yet profitable niche, within the Chemicals industry. They are Organic Chemicals (derived from Ammonia) and are used in the synthesis of Pharmaceutical bulk drugs (APIs), Agro-chemicals, Dyestuffs, Oil & Gas (downstream), Water Treatment chemicals, and Rubber Chemicals.

An ordinary monsoon in 2016 and multiple government initiatives led to strong crop sowing in the rabi season. Sowing was at record high of 58 mn hectares ( 6.9% YoY) led by wheat ( 8%), pulses ( 13%) and oilseeds (11%). High reservoir levels bode well for the rabi season.

Chemicals and Fertilisers: 2QFY17E Results Preview

We organised a Specialty Chemicals Industry Conclave on 28th September 2016 in Mumbai. In this daylong event, we hosted the following eminent dignitaries from the Indian specialty chemicals' sector in a panel discussion...

Top picks: We are positive on agrochemical players (Rallis India, Dhanuka Agritech and Insecticides India). Normal rains will lead to strong volume growth. We have upgraded PI Industries TP to Rs 760/sh (25x FY18E EPS) and maintain BUY.

Chemicals and Fertilisers: 4QFY16E Results Preview

Rerated by lower crude; not yet captured core potential...