Q3 Result Preview: 4 key reasons why Agrochemical producers may see a weak quarterly performance
Also Read- Titagarh Rail: The stock gained 367% in 2023; is there more upside ahead? Even analysts at Elara Securities India Ltd said that the earnings trajectory of agrochemicals companies under their coverage in Q3 is expected to be divergent. Companies that are light on channel inventory and have liquidated high-cost inventory are likely to be on a strong footing while earnings for the rest of the universe are likely to be under pressure. Industry veterans as S K Chaudhary, founder director of Safex Chemicals, said that Agrochemical producers can be classified broadly under three categories.
Those who are producers of formulations, those producing generics and exporters. The demand in the country has seen the impact of uneven distribution of monsoon. The states of Karnataka and Maharashtra have seen maximum impact.
The yield of crop has remained impacted in the Kharif season and Rabi season is also seeing yields under pressure. The demand in the December quarter was not good and Chowdhary said that in the March quarter it may not pick up substantially. The inventory problem will normalize only when El Nino's impact normalizes, said Choudhary.
i.e the demand picks up. Also Read- Trident share price rises more than 9%, gaining for the 7th straight session. Here's what is driving the stock price Overall analysts and experts remain cautious on near term outlook.
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