Is the worst seemingly behind for Indian chemical players?
several chemical stocks are still 10-33% away from hitting their 52-week high, which is indicative of the potential upside. "The chemical sector appears to be at the bottom of the cycle, indicating potential recovery ahead," said Resham Jain, fund manager at DSP Mutual Fund.
"However, it's challenging to predict whether this will take 3 months or 6." Indian chemical companies anticipate that the worst has passed, foreseeing an uptick in demand from current levels, particularly as the second half of FY25 looks robust, said some analysts. Vinati Organics, Clean Science, Sudarshan Chemicals, Privi Specialty, Neogen Chemicals, SRF and Navin Fluorine witnessed a strong volume- recovery, they noted.
“They (global peers) too are experiencing early signs of demand recovery but are cautions regarding near-term performances considering volatile macros and the geopolitical environment, de-stocking and inflationary trends," said Bhawana Israni, Research Analyst, Anand Rathi Institutional Equities. She believes that growth of global peers may come in low single digits in 2024.
Analysts believe that the recovery has begun, albeit gradually, with demand improving across various sectors and a pick-up in channel restocking alongside better realizations. Also Read: Chemical sector analysis: Galaxy and PI Ind to continue growth, agrochem players to face demand pressure Talking about realizations ahead, during May, crude slumped 8-10% month on month while chemical prices remain mixed.
“China Soda Ash prices rose 8% month-on-month (MoM) while caustic soda/TDI/acrylonitrile prices fell 2%/4%/3% MoM. Crude decline led to decline in petchem, building blocks, and monomer prices however polymer prices remained resilient," according to a 4 June
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