UBS Research initiates coverage on chemical companies with a positive view on PI Industries, Navin Fluorine

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Aarti Industriesshare price declined more than 5% in intraday trades on Wednesday while Gujarat Fluorochemicals share price declined more than 2%. Share prices of PI Industries and Navin Fluorine International also saw intraday corrections of more than 1% hile global concerns persist, positive is that UBS Research has initiated coverage on these chemical companies with a positive view on the sector. While they remain Bullish on PI Industries Ltd and Navin Fluorine International Limited, though they have sell ratings of Aarti industries and Gujarat Fluorochemicals.

UBS Research in its report said that “We think investors may be ignoring Indian chemicals companies' strong niche positions and growth opportunities within the context of the worst global destocking cycle in chemicals over the past 30 years, but we see signs of modest volume recovery" . Also read-Eicher Motors: Up 50% from its 52-week low, is it the right time to buy the stock? Here's what experts say The weak global chemical demand and chemical destocking cycle have been key factors that have weighed on performance of chemical manufacturers for more than a year. The rising supplies of lower price Chinese chemicals added to their woes.

However analysts generally expect that worst may be behind. Structural Growth prospects: Indian chemicals companies scaled up their CAPEX by 4 times during FY16-23 to leverage specific opportunities in specialty chemicals. The ongoing supply chain diversification and increased capacities by the companies and their capability may drive structural growth, feel UBS analysts.