The specialty chemical companies under the brokerage firm Motilal Oswal Universe have incurred a cumulative 44 billion in capital expenditure during FY20-22 and is expected to incur another 54 billion during FY23-24, setting the stage for the next phase of growth, the brokerage said in a note.
brokerage, sharing top stock picks in space, said it has buy tags special chemical stock With Target Price of Galaxy Surfactants 3,536, Vinati Organics (TP: 2,387) and NOCIL (TP: 306).
“With the emergence of specialty chemical companies at the forefront of the China+1 strategy, there is no looking back for them. They seek to capitalize on the growth story of not only the domestic market, but the growing global demand for those chemicals. Including these companies.”
The story of China+1 is not new to the particular chemical industry and has been in place since 2016 when the Chinese government began a series of shutdowns on chemical factories in its country due to environmental concerns.
Motilal Oswal said this has increased the confidence of global customers demanding more from Indian manufacturers, leading to a never-before-seen capex cycle in the Indian chemical industry over the past six years.
Many specialty chemical companies are getting into new and cross chemistry from older businesses to risk-free and diversify their product portfolios; Many of these rely on crude derivatives as feedstock or do not deal in complex chemistry.
“Chemcon Specialty, Vidhi Specialty, Naveen Fluorine, Vinati Organics, Chemplast Sanmar, and the likes are joining new product categories, while Lakshmi Organics, Deepak Nitrile, Atul, Meghmani Finchem et al. are entering new chemistries that allow them to It will help us to leverage our core competencies against the competition,” the brokerage said.
Expecting strong results, another brokerage Edelweiss is also bullish on Gujarat Fluorochemicals with a target price. 3,676, SRF (TP: 3,072), Fine Organics, Galaxy Surfactants (TP: 4,159), Deepak Nitrite while it has a hold stance on Fine Organics. Its top stock picks are GFL, Fine Organics (TP: 5,521), Galaxy Surfactants and Deepak Nitrite (TP: 3,127).
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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